Two basic principles of running an effective business include efficiency (doing things right) and effectiveness (doing the right things). This is the secret sauce that marketing operations bring to the business of marketing that enables marketing to meet financial goals such as ROI, pipeline, and revenue. In the technology-rich environment of martech today, it’s easy to get sidetracked by all the bright and shiny toys available. This article looks at how marketing operations injects a new sense of purpose and perspective into the business of Revenue Marketing™.
Doing Things Right = Efficiency
The core tenant of any operations team is to drive efficiency. Marketing might be considered akin to a manufacturer in that marketing’s job is to produce tangible MQLs that convert to revenue. If we stay with this analogy, how efficiently that MQL can be produced can be a game changer for an organization. Think about how much “waste” a typical marketing organization generates over the course of a week, a month, a quarter or a year. Waste is generated in every part of marketing – planning, building, executing, communicating, reporting, etc. We must admit that project management, process streamlining, and finding more efficient ways to produce ANYTHING is not a natural marketing talent.
In many companies, this is the first charge of a marketing operations group – get rid of the waste, streamline processes and optimize current resources. Given this as an early charter, the marketing ops group brings not only operations talent to bear, but also key technologies that move efficiency improvements into the status quo of marketing.
Let’s look at conversion rates as an example of doing things right. If I am working with a company and they can’t instantly quote their conversion rates, I know we have a lot of work to do. Lead conversion rates from the beginning of the funnel (name) to the end of the funnel (contract) is the most fundamental example of efficiency. The more the conversion rates can be improved, the more efficient the production process. Using the same set of resources to produce more or better product is the hallmark of an effective marketing operations group. Efficiency measures are always numbers such as conversion rates, cost per lead, pages per visit, number of website visitors per month, etc. Becoming a more efficient organization is typically what marketing operations addresses first.
Doing the Right Things = Effectiveness
The second part of the marketing operations’ charter has to do with effectiveness or doing the right things. Marketers are often caught in the loop of “this is the way we’ve always done things.” Once the marketing ops group has most of the efficiencies in place, they begin to look at the higher-level picture of what marketing could be doing differently. This alternate view is very much based on running marketing like a business in order to affect top line revenue growth. The marketing operations group is often charged with creating new processes, new metrics, new alliances and new results.
Marketing operations takes on a leadership role when addressing the effectiveness (Are we doing the right things?) of the marketing organization. Late last year I was working with a marketing operations leader who was responsible for the budgeting and planning process as well as the ongoing management of the budget. The company began a small inbound program early in the first quarter and increased the budget in small increments in the next six months. As the marketing ops team looked at the returns on the different areas of marketing spend, they noticed a very high conversion rate of inbound leads as well as a higher average deal size. Based on this analysis, doing the right thing was to take money out of lower performing programs and place more money into the better performing inbound campaigns. Without the overall analysis and comparison of different areas of marketing, this switch might never have happened.
Beyond the Bright and Shiny Toy
The marketing operations function is growing quickly and making a significant impact in redefining marketing’s contribution to the business. I first wrote about The Rise of the Marketing Operations Function in 2016.
Since that time, I’ve worked with many marketing operations leaders as they pioneer this new element of marketing. Establishing the right core technologies as the foundation and ensuring the right marketing operations talent is essential to success. Equally important is the mindset of the marketing operations team.
If they view themselves as key to improving efficiency and effectiveness as it relates to financial goal achievement, they will lead the transformation of marketing from a cost center to a revenue center. This dramatic transformation is the essence of Revenue Marketing and what determines an organization’s profitability and long-term success.