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Revenue Disruption: Game-Changing Sales and Marketing Strategies to Accelerate Growth by Phil Fernandez

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High Growth Means a Higher Marketing Percentage

From the marketing and sales spending information provided by the respondents, the survey also saw a correlation between the rates of revenue growth and the percent of revenue spent on marketing. Figure 8.2 shows that higher growth companies spend 3 to 4 percent of their revenue or more on marketing, instead of the 1 to 2 percent that many companies currently spend.

FIGURE 8.2 Companies that spend proportionately more on marketing tend to achieve higher growth.

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Beyond that, high growth companies tend to spend at least $.50 on marketing for every dollar spent on sales. This means that companies not only need to have a baseline of marketing activity in place, but their sales efforts become more effective when they’re supported by more marketing investments. On the other hand, revenue growth declines if a company over-invests in sales to the point where it outruns marketing.

This suggests that corporations should consider reapportioning their marketing and sales budgets in order to boost revenue growth. They should allocate more for their marketing staff and programs, rather than just pouring more money into hiring additional salespeople.

This probably sounds counterintuitive; it certainly runs counter to established dogma in corporate marketing and sales. But of course, that’s the point of this entire book: We must disrupt our old, ...

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