Annual Marketing Planning: Making the Shift from Sales Support to Revenue Generation
By Jim Perdue, Director, Client Strategy
Each year, marketing executives at manufacturing firms embark on the strategic annual marketing planning process. The objective of this process is to lay out a detailed map of marketing activities for the year to come, as well as set measurable goals for impact.
Sounds pretty straightforward, right? Not so much.
The reality is that many manufacturing marketing leaders struggle with how best to approach the planning process. Too often, they make plans based on what they’ve done in the past rather than proactively looking to find where the best opportunities lie for the future. Practically speaking, this means that marketers essentially default to last year’s marketing plan. They may tweak it a little here and there. But the changes tend to be reactive, based on things like upcoming events, sales support requirements or impending product launches.
The problem with annual marketing planning lies in how marketing is perceived. Unfortunately, many manufacturing companies view marketing as nothing more than an extension of their sales activities. They don’t know of a better way to approach the annual marketing planning process because they don’t expect marketing to create growth in its own right.
At Dorn, we help our clients adopt a strategic approach to modern marketing planning that enables their marketing teams to drive enterprise value creation and growth. Our unique process doesn’t just help marketing executives craft effective plans. It also reorients the role of marketing within manufacturing companies, setting the stage for marketing to perform an independent revenue-generating function.
Manufacturing Companies Must View Marketing as a Revenue-Generating Engine
If your organization treats marketing as a sales support function and leaves it at that, you’re not just failing to fully leverage your marketing talent. You’re also leaving valuable money and opportunity on the table. The truth is that leading manufacturing and industrial organizations must view marketing as having a revenue-generating function with the power to create revenue in its own right.
To shift marketing from sales support to a revenue-generating engine, you’ll need to make sure that your marketing team is prepared to set its own unique goals that back up your corporate objectives and map to the broader goals across your organization. This means that your annual marketing plans should take the activities of each area of the organization into account, from sales and product management to IT systems and beyond.
In addition, your marketing team must be up to date on the most current industry buying behavior trends and technologies. For example, today’s end-customers typically prefer to research solutions to their challenges on their own rather than looking for a salesperson to educate them. This means that marketing must take ownership over educating end-customers about how their firm’s products and services solve challenges and add value.
Dorn’s approach to annual marketing planning helps cement marketing’s role as a revenue-generating engine.
Incorporating the Architecture of Strategic Pillars into Your Annual Marketing Planning Process
Marketing leaders who want to leverage marketing as a revenue-generating function must plan differently than they have in the past. Dorn’s strategic-pillar approach to modern marketing planning helps set the stage for this shift. As you’ll see, the strategic pillars work in concert to stimulate growth across your organization.
- Identify corporate objectives and financial targets. This goes for each cross-functional team but as the revenue-generating marketing leader, you have the opportunity to take charge of the process by adding the structure needed to get the most value out of your annual plan.
- Corporate objectives: prioritize the list of corporate objectives to three or four that you believe add the most enterprise value to the organization and are achievable in the upcoming year. Take an analytical approach to building a fact base (data, historical performance, market conditions, etc.) around each objective.
- Financial targets: if your marketing team has not had its own revenue growth goals in the past, this is an opportunity for you to define where you can institute more ownership. Define your contribution to revenue in two distinct areas (1) net new revenue and (2) influenced revenue.
- Roadmap Product and Sales go-to-market programs. As a revenue-generating marketing leader, it is your responsibility to support and create interlock between product-led and sales-lead programs.
- Prioritize revenue programs: work with each cross-functional leader to prioritize their programs based on achieving the corporate objectives. Determine the resources needed to maximize revenue potential. Can your team properly support these programs? If not, perform a gap analysis to determine what is needed and reprioritize.
- Know the queue: do not lose sight of the queue. Often, we see annual plans knocked off track as early as Q1. One method to plan against this is to form a growth committee with other leaders in the organization. Establish a regular cadence and structure to share program updates.
- Audit programs: finally, a roadmap is only as strong as its last audit. Be sure to audit programs frequently and make adjustments where needed.
- Architect strategic marketing pillars. You are in a unique position as the revenue-generating marketing leader. Not only does the organization depend on you to interlock all cross-functional programs but it also expects you to lead marketing programs. In order to do that you must determine which organizational functions marketing should own (e.g. New Customer Acquisition, Share-of-Wallet, Product Marketing, Merchandising, etc.) and their degree of strategic importance to your organization. These functions should serve as the strategic pillars of your marketing plan.
- Limit your strategic pillars: just like corporate objectives you do not want too many strategic pillars. It is an easy way to spread your department resources too thin and risk overall effectiveness. At Dorn we suggest narrowing your pillars to 4 – 7. Ask yourself, do these pillars help our organization achieve its corporate objectives?
- Perform a gap analysis: once you have identified your strategic pillars, perform a gap and organizational readiness analysis for each. In most cases, this will involve cross-functional teams and help the organization understand whether-or-not their corporate objectives are achievable. When filling gaps, prioritize areas of the highest strategic importance.
- Assign resources and budget: you don’t want to be the marketer with a top-shelf plan but no way to drive or support it. Formalize your budget and allocate funding appropriately to each strategic pillar. Develop a business case if you need additional funding.
- Develop shared KPIs. Shared key performance indicators (KPIs) are extremely valuable when measuring the effectiveness of interlock between multiple functional groups. They help to create a visual, easy-to-digest common language for your commercial execution team, while also encouraging accountability. This is vital for marketing teams measuring net new revenue and influenced revenue. The bottom line is that shared KPIs measure how effective your organization is at creating customer value and driving organic revenue growth.
- Start with your corporate objectives: linking your KPIs to measure the effectiveness of your programs in achieving your corporate objectives will ground expectations on what is most vital.
- Identify data needs: ask yourself what information and data collection will be required to provide context around your KPI outcomes. This will readily provide insight to your teams on how to adjust program activities to optimize performance.
- Communicate KPIs effectively: avoid excessively long reports; clearly illustrate KPIs with succinct, visual insights so that the data is clear, accessible, and actionable.
Instead of rehashing last year’s plan, try to push the boundaries of what modern marketing can do for the revenue growth of your organization in a time where buying behavior trends are changing towards an integrated model that is less reliant on traditional tactics and more reliant upon value created from cross-functional alignment of product, marketing, sales, customer experience and IT.
Dorn’s practical approach to annual marketing planning gives cross-functional leaders the confidence and direction to craft strategies that generate incremental revenue and profit. Does your team need more practical insight crafting an annual marketing plan? Let’s talk about how we can help.