HomeBlog A Modeled Approach to Marketing's Contribution

A Modeled Approach to Marketing's Contribution

March 28, 2013|Mark Nadolny

As we provide benchmark studies for SiriusDecisions clients, we often see organizations struggle to measure marketing’s contribution to, and influence on, sales pipeline. As a first step toward capturing these key performance indicators, we walk clients through a model that breaks down typical marketing contribution and mix based on three go-to-market strategies: direct enterprise accounts, inside commercial accounts, and small-and-medium-sized business (SMB)/channel accounts.

As we provide benchmark studies for SiriusDecisions clients, we often see organizations struggle to measure marketing’s contribution to, and influence on, sales pipeline. As a first step toward capturing these key performance indicators, we walk clients through a model that breaks down typical marketing contribution and mix based on three go-to-market strategies: direct enterprise accounts, inside commercial accounts, and small-and-medium-sized business (SMB)/channel accounts.

Tier 1: Direct Enterprise Accounts

Organizations targeting large enterprises are already familiar with the potential clients that exist in this saturated space, so it’s difficult for marketing to source new leads. Marketing spend as a percentage of revenue is often fairly small, usually less than 5 percent. Marketing typically supports sales by influencing more than 75 percent of all leads and sourcing up to 10 percent of them. The mix should consist mostly of sales enablement, then demand generation, with less focus on awareness.

Tier 2: Inside Commercial Accounts

For organizations focusing on mid-size accounts (which we define as having 101 to 1,000 employees), marketing spend, contribution and mix begin to shift. The percentage of revenue spent on marketing tends to increase to 20 to 30 percentage points in comparison to Tier 1 accounts. Marketing’s influence remains relatively high, ranging between 60 and 75 percent of all leads, and marketing sources between 15 and 25 percent of leads. Demand generation is typically the primary activity in the marketing mix, followed by enablement and then awareness.

Tier 3: SMB/Channel Accounts

In this segment, organizations spend 25 to 40 percent of revenue on marketing. Marketing continues to play a strong role in influencing purchasers (50 to 60 percent) and plays a much larger role in sourcing leads (30 to 45 percent) as the lead pool is much larger in this space. Whereas enablement and demand generation are marketing’s primary tasks for Tier 1 and 2 accounts, the main focus for SMB/channel accounts tends to be driving awareness, followed by demand generation and then enablement.

This three-tiered approach enables marketing to collaborate more effectively and efficiently with sales in a coordinated effort to push leads through to closed business.

Mark Nadolny

Mark Nadolny is Manager of Benchmarking Analytics at SiriusDecisions. Mark’s expertise at quantitative and qualitative analysis has been used to identify consumer issues and to develop research solutions throughout North American and Asia. Follow Mark on Twitter @mjnadolny.
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