The 38% difference that could mean $1.7 MILLION in revenue…

By Lynn Swayze

Sep 23

This is a tale of two B2B firms and the "38% difference" that could mean millions for your bottom line.

One firm - let's call them Firm A - has a traditional model when it comes to sales and marketing. This firm believes marketing to be a cost center, and only relies on marketing to create sell sheets and the occasional piece of content to promote internal events and local meetups.

The second firm - let's call them Firm B - has integrated sales and marketing so there is Marketing and Sales Alignment and Sales Enablement. Marketing and sales work together to capture client language, target new clients, and make sure that marketing worked to qualify leads and sales effectively nurtured them to close.

Both firms are successful, of course. But let's quantify that for a second.

Let's say each firm generates about 100 leads a month, and see an average conversion rate of about 5% (industry average is 5-10%). And each firm wins an average project of about $50,000. (A good, round number for illustrative purposes only, of course.) And let's say that this firm actually knows how much a new client costs to acquire, and in this case it's $5,000 per new client once you count wages, operations, advertising spend, and so forth.

Before any optimization in marketing, each firm should generate about $250,000 a month in revenue and spend about $25,000 to get it.

But let's see what happens when sales and marketing are in alignment vs when it's not.

Firm A relies on sales doing all the one-on-one selling, which is slow and customized. And when sales needs something, they have to pull marketing off of other projects to create custom content. So no new marketing is being generated while the custom content is being created, which further creates the idea that marketing doesn't work.

Firm A generates $250,000.

Now what happens with Firm B? Firm B has alignment between sales and marketing, and marketing enables sales. Now, marketing is planning content and sales assets in advance and training sales people on how to use the marketing assets to qualify and educate leads. And because marketing and sales are in alignment, both departments learn which assets work to move the conversation and which fall flat.

And because content is generated in advance of the need, marketing is able to budget their time to keep the marketing machine going with social media content, case studies, lead magnets, and more.

The result? 38% higher win rates, which means 6.9% convert to sales, or an increase of $145,000 in revenues.

But wait! There's more!

Research also says that companies with aligned marketing and sales teams see 36% higher customer retention on top of the higher win rates. So instead of losing 2 clients at the end of each project (Firm A), Firm B keeps those clients and re-sells them on new projects without having to spend anything on marketing (thereby increasing the ROI by reducing costs.)

That $145,000 difference would mean a $1,740,000 increase in revenue for Firm B after 12 months.

And that's just the start of the benefits that accountable marketing and sales-marketing alignment can bring to a business. Imagine what happens when we plug in real numbers and work to lower the cost of acquisition by optimizing on what works?

Amazing right?

TL;DR: Marketing can increase sales and reduce costs by attracting qualified leads en masse, putting less of the burden on your sales team to do one-on-one work. It also makes it easier for your sales team, because they'll have all the marketing messaging and marketing assets at their fingertips to use in their sales follow-ups. The result? 38% higher win rates and 36% more customer retention than when sales and marketing don't work together.

Where have you seen this work in YOUR organization? I want to know in the comments below.

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About the Author

Direct Response Copywriter Lynn Swayze has specialized in Consultant Marketing and Information Marketing since she jumped on the scene in 2014. She's worked with big names like Agora, Kevin Rogers, John Bowen, Mike Weiss, Jason Hanson, and more. She works as CMO to IDRM LLP and is a staff copywriter at several organizations.

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