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

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Treating Marketing Like an Investment

A company that can think about creating revenue in hard ROI terms will start to see marketing less as a cost center and more as an investment in revenue generation. This idea not only applies at the conceptual level, it also manifests itself in concrete detail when planning and evaluating how much money to spend on various marketing programs. CFOs and other metric-savvy executives are already comfortable with this kind of investment analysis in other contexts. For example, when making a decision about a major capital equipment purchase, or building a new factory, or opening a new branch store, financial analysts frequently deal with point-in-time investments that yield predictable returns, but over an uncertain period of time. Yet these same people frequently fail to apply this kind of thinking to revenue. Instead, they ask the CMO a month after a trade show, “What did we get from it?” expecting a simple point-in-time answer. They would never ask this same kind of question the month after breaking ground on a new factory.

Of course, treating marketing like an investment also carries two key implications. The first is that any plan for a marketing investment needs to begin with a quantified set of expected outcomes: What are the best case, worst case, and expected case outcomes? And what do we expect will happen in return for this money we want to spend?

The second, more controversial, implication is that marketing investments should be amortized ...

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