Last week (editor: May 14) it was revealed Intel is cutting roughly 13% of its marketing department. Why? The cuts pave the way for the arrival of a new CEO at the struggling chip maker. The cuts remind us that marketing is often the first to go when fortunes turn south.
To remain relevant in business, it’s increasingly essential that marketing prove its contribution to revenue – marketing driven revenue or MDR – and enterprise marketing return on investment (EMROI). If you don’t know how much revenue marketing generated, you’ll never be able to accurately calculate return.
Benefits of Proving EMROI
Proving your EMROI validates the enterprise’s investment in marketing. Further, when you can measure, you can discover. Accurate EMROI reveals which opportunities and investments generated the most profit, so that you can better allocate your budget in the future.
One of the problems is that it’s usually challenging at best to accurately discern the amount of revenue generated by marketing. And if anything, reported MDR is usually much lower than actual MDR, meaning marketing is missing out on credit where credit is due.
The Problem of Attribution
Businesses have historically struggled with proper attribution of revenue. That’s because it’s often difficult to pinpoint where a sale first originated, for reasons ranging from human error, to disparate data in disparate silos.
Data is often inaccurate. That’s because data is often entered by people, and people often have self-serving interests, such as attributing revenue to their department. This is most typically seen with marketing deals inaccurately attributed as sales-driven revenue (SDR). SDR is easier to claim than MDR, and MDR is often misattributed to SDR.
One of the challenges for marketers is that the sales department sometimes receives credit for revenue that was generated by marketing. This can happen for a variety of reasons. Sometimes data is inaccurate or missing. Or sales might want to meet its quota to get a higher commission. Or lack of clear rules leads to human guesswork and inaccurate attribution.
Problems With Non-Attributed Revenue
A similar problem can happen with non-attributed revenue. Just because first contact was with sales, doesn’t mean it was a sales-generated deal. In some cases, revenue is generated organically. When non-attributed revenue is mistakenly attributed to sales, businesses lose the opportunity for data discovery.
For marketers to prove their contribution and worth, it’s essential that marketing receives credit for all revenue is generates. The key to this is the automation of data, including marketing, customers, sales and finance.
Remove Human Error
There are many benefits to automating marketing data, and perhaps the greatest is increased accuracy, including MDR. With data entered automatically and accurately, human error or misattribution is removed, and MDR and EMROI are more accurate.
For years, marketers have invested in measurable amounts of time to collect and analyze data. When marketing and revenue data are automated, human latency is removed from the equation. This makes data not only more accurate, but makes the process more efficient.
As business becomes increasingly competitive, every area of business must prove its worth. And for marketers, it’s essential to embrace technology and automation, in order to efficiently and accurately take credit for every single dollar generated by marketing activities.