The quest for the holy grail of marketing begins and ends with Return On Investment (ROI).
Tech Manufacturers and Channel Marketing Managers are obsessed with ROI. In today’s world, who could blame them? However, (in my humble opinion) the current way of thinking about ROI is outdated. It’s leftover from the 80’s sales mentality. You are tracking the wrong way! We all know that it’s not about selling boxes; it’s about solutions and building relationships.
The current paradigm doesn’t take into account:
- Any deals after the initial first deal closed (almost never!)
- Extended sales cycles
- What that new customer is worth to them over their companies life
So I ask you, what’s the ROI on building a relationship with a net new customer that fits your profile?
If you look at a real life example, it gets pretty interesting…
One of our clients participated in a Cisco funded marketing campaign through eCoast. They received a lead from us for a Cisco ASA router in a legitimate sized company that was open to a new relationship. They closed the deal for 10K in a couple of months. Every win is a good one, but no one is high-fiving at this point.
Hypothetically, Cisco asks “What’s the ROI on the eCoast campaign you did?”
The response could be, “NOT GOOD, LEAD GENERATION DOESN’T WORK, ONE CLOSED DEAL FOR 10K FOR AN ASA ROUTER. We are not doing that again, waste of time!!!!” (Sorry for the tangent, I get carried away channeling angry solution providers who participate in outsourced demand generation.)
I challenge you to change the way you think. It’s not about the one-off sale; it’s about the Customer Lifetime Value(CLV). After meeting face-to-face with the customer, our client discovered there was a large UC voice opportunity on the table. They nurtured the relationship and 12 months later…
“Since the original lead which was a simple security lead (ASA) we have provided engineering services worth $30,000 and most recently closed an UC opportunity worth $375,000 and an infrastructure and Cabling opportunity for $105,000.”
Watch the video case study.
Ok, here’s my point: This deal which took 12+ months to close would have never been associated with the campaign because ROI especially on channel campaigns is “what’s going to close next quarter.”
In my opinion, manufacturers like Cisco, HP, and Microsoft are really getting more value than they think in terms of building a long-term revenue stream. Not to mention less grumpy Partners.
So how much is a net new customer worth to you?
My gut feel is you already have an idea. Check out this calculator for Customer Lifetime Value to help you…
http://www.harvardbusinessonline.com/flatmm/flashtools/cltv/
