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Marketing Generated Revenue Forecasting: The Convergence of Sales & Marketing

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As sales and marketing continue to converge it's no longer solely the Sales Director's responsibility for revenue delivery and sales forecasting.

Sales professionals are now being challenged to become more technical and consultative. On the flip side, for effective marketing teams and marketing agencies, sales qualified leads is not the primary goal and result. No longer can marketing say they did their job because they produced x amount of leads or even qualified opportunities.

For companies that are generating 50% or more of revenue from inbound leads, it's essential for the marketing team to provide revenue forecasts and the financial impact of their monthly activities.

Here is the problem today.  For many companies, the sales cycle that is greater than 3 weeks. So, when marketers speak about their monthly metrics and performance in terms of website visitors, leads and even sales opportunities they are not speaking in the same timeline as the sales and executive teams. Usually, up until the last few days of the month or quarter, businesses are focused on revenue that is closing in the short term (existing opportunities that are nearing the end of the average sales cycle) while marketers are talking metrics that bare NO impact on the here and now sales numbers. This can be frustrating to everyone involved as sales and marketing teams are on different timelines and wavelengths.

I can't even remember the amount of times I've said to the sales or executive team, "our impact of leads delivered will have no impact on sales this month. Everything that impacts our current financial period was done by marketing weeks or even months ago." This isn't a way to dodge responsibility, it's a true reality of the way sales and marketing teams are structured so long as marketing is focused primarily at the top half of the funnel. (The realignment of marketing being responsible for the entire funnel rather than the top is another discussion and will be addressed lightly below). If you measure your marketing team by number of leads or opportunities, don't expect much help when you need revenue in the next week.

Let's avoid that conversation and get proactive, even if your goals and focus remains at the top of the funnel. Let's make sure sales and marketing are speaking the same timelines.

How can you accomplish this? Join in on the forecasting, marketers! Marketers are technical.  Everything they do relies on data. For talented technical marketers, sales forecasts should not be an uncomfortable exercise.

Enter, the Oracle! This is a smart spreadsheet I created to turn marketing leads and opportunities into revenue forecasts. Now, what is the difference between this type of forecasting and the sales forecasts the sales team is already creating?

  1. Your forecast is going to be built differently (most likely). You aren’t going to use the weighted pipeline forecast, or % probability based forecast that your sales team may already be using.
  2. Your forecast is going to be focused on how much revenue will be driven by marketing-generated leads and, most importantly, when that revenue will hit the business bank account!

In Part II, I will show the Oracle and break down how it’s used as well as provide instructions for you to do the same for your organization.


Topics: Inbound Marketing ROI | B2B Marketing | Marketing Strategy