Is Your Marketing a Profit Center? If Not, It Should Be.
Do you know how your prospective customers make buying decisions? The facts might surprise you. It used to be that customers would begin the process relatively uninformed, then progress through a linear buying journey that involved engaging with a sales rep fairly early on. Now, it’s a whole new world.
Today the buying journey is much more fluid, and it begins with Google. Much of the journey happens digitally, as prospective customers explore your website content and follow you on social media. One study found that 84% of CEOs and VPs use social media during the purchase process (CEB Marketing Leadership Council and Google). Long before they’re willing to engage with your sales team, buyers want to consume content about you.
Your marketing approach must change to reflect how customers engage with and decide which companies to buy from. In this new reality, a profit-center marketing approach is quickly becoming a must.
Linking Marketing to Revenue
Marketing has been viewed as a cost center historically. That’s because marketing teams often focus on creating content and building out campaigns without the necessary foundational elements, like defining measurable objectives and understanding the target audience and how they buy. It makes for lots of activity, but it doesn’t always generate revenue.
The best way for marketing to really make a business impact is to become a profit center.
Profit-center marketing turns your marketing function into a true revenue and profitability driver. Knowing that prospects progress through the buying decision much differently now, profit-center marketing seeks to guide them further through their buying journey than before, going far beyond generating awareness and interest. The goal is for marketing to generate warm leads that are ready and willing to engage with sales.
Companies that take a profit center marketing approach realize significant, measurable benefits. McKinsey & Company shares strong examples, including a revenue increase of five-fold for one company that chose to focus on high-growth markets, and a 60 percent boost in TV advertising returns for an organization that used analytics to choose its ad slots.
As a company leader, you have the power to direct your marketing to be a better driver of increased revenue and profitability. Steps like the following can get your organization on the path to realizing the many benefits of profit center marketing.
Give Your Teams Time
In the current environment, with many companies’ short-term sales suffering, it can be difficult to think long term. However, a profit center marketing approach takes time. The rewards can be great, but a bit of planning and patience is required. Your marketing team will spend much of the first year developing the foundational elements needed to shift their focus to a profit center approach.
During the profit center marketing start-up phase, you can expect your marketing teams to engage in activities like these:
- Developing a strategic marketing roadmap, a detailed guide on how they will reach their destination and who is responsible for each step
- Identifying processes that need to be revised to better support this approach, and/or entirely new processes that need to be added
- Gaining a better understanding of your target audience and how they buy, using research as needed (a great step to take in the short term, especially if the COVID-19 pandemic has caused you to pause your marketing outreach efforts)
- Revisiting your SWOT Analysis to ensure your view of your company’s Strengths, Weaknesses, Opportunities, and Threats is current and accurate (a must in these volatile times)
Help Build Bridges
Your marketing team should take primary responsibility for making the shift to a profit center approach. But they’ll need buy-in to succeed. It’s important for other functional areas of your organization to understand that marketing will be operating differently going forward, why that’s necessary, and the benefits. For a profit center marketing approach to work, marketing will need to engage with their colleagues in ways that may be new or different. If the requisite bridges don’t already exist, C-suite executives may need to help facilitate stronger relationships across functions.
Invest in the Right Tools
A shift to profit center marketing may require new tools and technologies that support this approach. Marketing analytics software is critical for tracking your efforts and measuring important metrics, such as the number of quality leads and the amount of revenue you can link to marketing. Marketing automation solutions can improve efficiencies and free your staff to spend more time on strategic efforts. By equipping your marketing staff with tools that focus their efforts, improve their productivity, and track their effectiveness, you’ll realize a greater return on your investment.
Demand Greater Focus
When marketing is approached as a cost center, there is often a great deal of activity that may or may not be focused in the right direction. If you’re accustomed to expecting a lot of activity from your marketing teams, you might want to rethink your expectations. Profit center marketing is more targeted and focused.
Rather than decide “we need a brochure” or “it’s time for a new white paper,” marketers who take a profit center approach start first with a specific business objective. Then they determine how (and at what stage of the buying journey) marketing can support that objective. There’s an emphasis on segmenting buyer types and tailoring content to each, always guiding them through the revenue funnel. As your organization shifts to a profit center marketing approach, you should expect a more focused effort.
Bring in Help
Pivoting to a profit center marketing approach takes time and expertise. Depending how you’ve staffed your marketing team, you may not have the requisite experience to guide this important shift. Take stock of your marketing team’s strength and expertise, then if you need to, seek guidance from organizations experienced in profit center marketing. A little help upfront with strategy and direction can pay big dividends down the road.
The move to profit center marketing can prove well worth the effort. Done properly, this approach can drive revenue and profitability growth in ways that surpass traditional marketing, especially in this volatile business environment.
Written by Debra Andrews. Have you read? Moldova CIP: Moldova Citizenship By Investment Program, Turkey CIP: Turkey Citizenship By Investment Program, Portugal Golden Visa Program, Dominica Citizenship by Investment Programme