An anecdote about the right and wrong ways to evaluate marketing programs

At one stage in my career I was in charge of marketing for several significant business lines at the company I worked for.  These business lines had their own distinct budgets, marketing teams, and sales teams.  This anecdote involves one of these business lines specifically, so from here on out I’ll focus just on that effort.

I had a pretty crafty marcomm manager in that business line, and somewhere along the line she wanted to explore an outsourced contact discovery and meeting generation service.  How it worked was we gave a list of target companies to this firm, which would use a combination of public information, its own proprietary database, and good old fashioned cold calling to penetrate these organizations, find the correct, empowered decision maker, and set up a meeting with the outside sales person.  From there it’s up to the sales rep to make things happen.

We all agreed to trial this program and then go back in a few months and look at the results.  In three months we spent a little over $100,000 to generate maybe one hundred of these meetings in total, spread across a dozen or so outside sales reps.  Two of these meetings led directly to revenue; one brought in a little over $100,000, and the other brought in about $400,000.  That’s half a million dollars in revenue on $100,000 in spend, or a 500% simple marketing ROI.  Any direct marketer will continue working that program year in and year out, and certainly by our standards it was the most effective marketing spend that business had ever seen.

Shortly after this milestone moment the company went through a reorg, and this particular business got split out completely on its own under its own GM.  I stayed with the main business and therefore gave up control of those marketing decisions.  Not long after this reorg, the original, smart marcomm manager who came up with the program in the first place told me that the new GM had killed the program.

Why did he do that?  It turns out that he went to the outside sales team and asked them if the program was working.  Two of them thought it was great.  After all, they’d brought in six figure deals on the program.  The other ten hadn’t brought in anything, so they all said it was a zero.  The GM came away and said, “Well, the sales team has spoken, and clearly this program is a dud.”  And so he discontinued the single most effective marketing program in the history of that business.

The moral of this story is that you have to understand what information you’re using to evaluate marketing programs and what that information tells you.  Certainly it’s a good idea to get the sales team’s feedback on what you’re doing, and lots of great knowledge is available that way.  But in this case a different, better perspective was available.  The marketing team had actually traced revenue back to spend and knew factually what the ROI was.  Failure to use that information led to the wrong decision.

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