Here’s a simple but hopefully valuable thought experiment. Imagine a trusted friend came to you enthused about a new investment opportunity. “You really need to get in on this,” your friend might say to you. “For every dollar you invest here, you’ll get 90 cents back!”
Of course, it doesn’t take much business experience to know that this is a terrible investment opportunity; indeed, common sense and basic math tell us this is a losing proposition.
Ultimately, what matters with any investment is the return. If you’re not making a reasonable return, then what is the point?
But wait. This is all pretty basic. And seemingly unrelated to the topics at hand—namely, sales and marketing.
Or is it?
Consider for a moment that the capital an organization spends on sales, marketing, and communications is ultimately an investment in futures sales. That’s not necessarily how these things are always viewed but it’s what they are. You’re spending money with the hope of making more money. But if you knew that every dollar you spent on sales and marketing was going to turn into 90 cents, you’d change course pretty quickly.
To think of sales and marketing activity as an investment isn’t just a matter of semantics; it’s an important paradigm shift that can help your business identify and eliminate waste.
3 Steps Toward a New Paradigm
In pursuit of greater efficiency and greater alignment between the CEO, CFO, and Sales and Marketing teams, we propose a simple three-step paradigm shift—a new way to think about your sales and marketing activity, one that will hopefully make it easier to differentiate between the things that add value and the things that don’t.
Step 1: Agree on the point of sales and marketing.
What is this thing we call “sales and marketing?”
What’s the point of it?
Here are a few things it’s not. It’s not a cost center. It’s not something you “just need to do.” And it’s not merely “a necessary evil.”
It’s an investment—and while that definition may sound simple, it’s not simplistic. Once you get everyone in your organization united on this basic concept, that sales and marketing is meant to be a profit center and to yield a demonstrable return on your investment, it quickly changes the way you view all your sales and marketing activities.
Step 2: Understand that waste is actionable.
John Wanamaker, a famous U.S. businessman, once said, “Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.”
Simply put, not every marketing tactic or sales initiative bears fruit. Not everything yields a return on investment. Not everything works and that’s okay. What’s not okay is never knowing.
The goal should always be transparency. Trying something new, evaluating the data, and discovering that it didn’t quite pan out isn’t any great sin. At least you learned something from it.
But not learning—or trying something with no way of ever evaluating its efficacy—poses a big liability for your company. This is the mortal sin we’re talking about. This is waste.
When you think about sales and marketing in terms of an investment, it empowers you to become ruthless in seeking out what’s working, what’s not, and what’s somewhere in the nebulous middle (and thus, probably not worth keeping around).
Step 3: Shift your priorities.
When you can clearly identify the specific sales and marketing investments that yield a return, there’s an obvious course of action: invest even more into these activities.
And likewise, when you identify something that loses you money, the simple solution is to discontinue it.
Identifying areas for investment vs. areas of waste requires systematic thinking—and that’s where Lenses and Levers comes in. By implementing Lean-Agile processes and tools, we help companies banish waste and radically improve the efficiency of their sales and marketing efforts, creating an immediate and lasting contribution to the bottom line.
Learn more about safeguarding your sales and marketing investment, and maximizing your ROI, by contacting us today.