You want to grow your business? That means it’s time to add more salespeople, right? It makes perfect sense. The more salespeople you have, the more sales you will have. Maybe not. One of the most common mistakes small and mid-sized companies make is adding sales capacity before they’re ready. Why doesn’t it work more often?
Let’s now shift to sizing the marketing budget and developing the metrics to gauge ROI. The first step is to determine as an executive team, CFO and CMO included, what the company should be spending on marketing relative to top line growth. Often, there is a reasonable sense, given industry and peer comparisons of competitive spending ratios. These can be adjusted based on events such as a major product announcement.
Let’s start by addressing what marketing is and how it’s evolving. It’s first of all, a collection of disciplines, not just one or two activities. Many people think of marketing as being advertising, the website, brochures, trade show events and associated trinkets. I would encourage you to think of marketing as a collection of interrelated activities that:
How credible and accountable is your marketing team? Many companies struggle with a significant credibility gap between the Chief Financial Officer (CFO) and their marketing counterparts. And it’s usually the Chief Marketing Officer (CMO) or VP of Marketing who is seen as the initiator of questionable commitments or requestor for budget with indefensible return-on-investment (ROI) assumptions. Marketing spends money, lots of it. But what is this spending actually buying the company? And who is accountable for the results and being proactive in presenting them?
How do we use our financials to look forward and make better guesses about our company’s ability to achieve growth goals? Purposeful action to grow requires a modern skill set of financial literacy and strategic thinking. Jess Dewell discusses the necessity of forward-looking financials with guest Steve Rosvold, Founder of CFO.University.
