Why Marketers Can’t Afford Not to Forecast

DemandLab

A woman holds a crystal ball up to her eye, representing the importance of seeing into the future through marketing forecasting.

All too often, the responsibility for forecasting is placed in the hands of the sales team. But when marketers get involved in the process, they can help the organization by enhancing forecasting accuracy—and help themselves by proving the impact their efforts make on revenue.

It’s always been a challenge to connect the dots on the long, winding path from marketing to revenue. And because sales are so much nearer to the close, organizations have traditionally relied on the sales department to predict future earnings.

But leaving forecasting solely in the hands of the sales department is a bad idea. It’s bad for the company because it limits visibility significantly, focusing exclusively on what’s in the sales pipeline and predicting only short-term revenues. And that short-term picture doesn’t accurately evaluate the entire revenue cycle, calculate the total cost per lead, and identify the conversion pathways that are most profitable.

As a marketer who has invested in marketing automation, forecasting can be one of the most rewarding disciplines you’ll ever learn, opening the door to more insight for the organization and more recognition and resources for your marketing team.

Top reasons to forecast

It’s a prestige booster. The c-suite love numbers. And they love being able to get in front of whatever’s coming down the pipeline. Being able to generate accurate, forward-looking revenue figures enhances your profile and help you demonstrate value to decision makers.

It’s a rainmaker. Most marketers have to fight for budget because it’s hard to prove ROI on that investment. Integrating marketing activities into the forecast enables you to link them to revenue. When you can demonstrate that marketing is a revenue machine, not a cost center, and prove the value of specific marketing initiatives, it’s much easier to make the case.

It’s a reality check. If you’re dreaming about generating millions of leads, waking up may not be pleasant. But seeing your reality in hard numbers can be transformative, enabling you to set realistic goals, channel your energies more effectively, and stop wasting them on projects that aren’t likely to go anywhere.

It’s a genius pill. Being able to track the ROI on your marketing activities will make you a WAY smarter marketer. You’re guaranteed to learn something—many things, in fact—about what works, what doesn’t, where your most profitable leads come from, which engagement channels they prefer, and on and on. The more disciplined you are about forecasting your impact, the greater your impact will become over time.

Getting started

If you’ve never been involved in forecasting activities, there are three things you need to do to get started:

Have a conversation. If sales own the forecasting process, you’ll want to open the lines of communications and figure out how you can support their process. If the feedback loop between sales and marketing has never been strong, this could be the beginning of a beautiful relationship. (We specialize in marketing and sales alignment, so if you need help here, please reach out!)

Set up multi-touch attribution. To accurately determine the ROI on different marketing channels, setting up multi-touch attribution reporting on your marketing automation platform is a must. This approach tracks every touch that shepherds a lead towards conversion, and it helps you give the right amount of credit to the many channels and campaigns you use to nurture and guide each lead. (Read more on multi-touch reporting.)

Invest in predictive analytics. While attribution helps you look back in time to see where the revenue came from, predictive analytics helps you look forward into the future. With predictive analytics, you can not only predict the ROI your current activities will generate, but model different scenarios to identify new and even more profitable opportunities. (AgilOne and Lattice Engines are two great examples of sophisticated prediction tools that can be used in conjunction with Marketo and other marketing automation platforms. You’ll find even more Marketo-compatible options in the analytics and big data listings on Marketo Launchpoint.)

6 forecasting tips for success

  1. Share the scorecard. Lead scoring is an essential part of the forecasting process, and if sales and marketing don’t share the same definition for MQLs and SALs, it can throw the entire forecast off course. By consulting closely with sales to establish mutually acceptable scoring practices, you can can ensure your definitions are aligned and the lead journey is consistent from start to finish.
  1. Don’t forget the handoff. Agreeing on lead scoring is a good thing, but if you haven’t agreed on SLAs for those leads once they reach sales, it can all start falling apart. Without a clearly defined path of action, all those quality leads you’re funneling to sales could be sitting in a bottleneck gathering dust.
  1. Keep the loop open. Getting everyone on the same page is an important first step, but it’s just as important to ensure everyone keeps turning the pages in sync. Establish a feedback loop that enables sales and marketing to touch base regularly (every quarter at a minimum) and share what’s working and what needs a little more work.
  1. Budget time, not just money. Too often, marketers forget that time is just as precious and money. If you’re tracking ROI based on campaign spend alone, you’re missing a critical metric. For example, an email campaign that’s technically “free” may take days to program. The hours in the day are just as finite as the dollars in your budget: make sure you can measure revenue against time and money.
  1. Check your progress. The worst thing you can do is to create a detailed forecast and then sit back and hope those predictions magically come true. This isn’t a sealed time capsule to be opened a year later: it’s a living, breathing strategy. Set aside time to review the data and track yourself against your targets every week. That gives you the opportunity to take action early, regain lost ground, and stay on track.
  1. Focus on quality. Salespeople are hungry: they’ll always want more leads. But don’t let them pressure you into sacrificing quality. Question their numbers and probe deeper to find out what they really need to see more traction. Shifting the focus from quantity to quality makes the objective seem more achievable: aiming for “5,000 new customers” is a lot more manageable than “1 million leads.” Focusing on quality also helps the sales team avoid wasting time and energy on leads that are either poor prospects or not ready to enter the sales cycle. And finally, it empowers you to identify your most profitable leads and refine your marketing strategy over time.

 

Previous Article
Mo’ Money, Mo’ Content: How to Make the Case for a Bigger Content Marketing Budget
Mo’ Money, Mo’ Content: How to Make the Case for a Bigger Content Marketing Budget

Content marketers can use these levers to build a convincing case for bigger budgets.

Next Article
The Ultimate Google Analytics and Marketo Integration Guide
The Ultimate Google Analytics and Marketo Integration Guide

Together, they can help you see deeper into the lead lifecycle than you ever thought possible.

INTRODUCING SIGHTLINE

The revolutionary revenue attribution solution for marketers is now available.

Learn More