Marketing’s Role Is Changing From a Cost Center to a Revenue Center

Jun 22, 2022 | Blog, Marketing

Whether your Marketing team is viewed as a cost center or revenue center could improve the relevance of your Marketing team and improve outcomes for the Sales team.
How does the rest of your organization view the Marketing department? Is it seen as a cost center or a revenue center?

Shifting perspectives from the former to the latter could improve the relevance of your Marketing team and improve outcomes for the Sales team.

Marketing as a Cost Center

For years, Marketing teams were treated as cost centers since they relied on traditional and expensive methods of reaching customers—such as advertising. However, over the past few decades, that perception has shifted. Many organizations now regard Marketing as a revenue driver in itself.

Read on to learn what’s responsible for that shift and what to do if your company still sees the Marketing team as a cost center.

What’s Causing the Shift from a Cost Center to a Revenue Center?

Digital marketing technology bears a great deal of responsibility for this mindset shift. There’s a veritable flood of digital marketing solutions helping Marketers improve efficiency and productivity.

Marketing automation allows Marketers to disseminate information through blog posts, white papers, social media, email, and a variety of other avenues. In addition to easily sharing educational content with audiences, digital marketing technology closes the reporting loop between the Sales and Marketing departments. There’s no more wondering which marketing channels are converting, at what rate, and at what cost.

Thanks to digital marketing technology, Marketers have access to analytics that tell them that putting X dollars toward Y channel will result in Z revenue. The value of technology to the company has grown exponentially because there’s clear evidence that the output of marketing collateral converts prospects and leads to customers.

Moreover, digital marketing allows Marketers to work hand-in-hand with Salespeople to help them find leads. In fact, the argument could be made that digital marketing technology has had an equally large impact on the Sales team. Before the advent of digital marketing technologies, customers had to turn to a Salesperson to find information about a product or service. Now, two-thirds of customers consult social media before making a decision.

What If Your Organization Hasn’t Undergone This Mindset Shift?

There are still organizations that see the Marketing team as a cost center rather than a revenue center. However, this perception is starting to shift as organizations see measurable revenue results coming from the Marketing department.

First, put the right people and technology in place if you haven’t already done so. Marketing needs to see itself as a revenue center. If it doesn’t, no one else will either. There must be a transformation in which Marketers move from disseminating content to monitoring its performance, generating high-quality leads that move through a customized nurture program. Every activity is part of an overall plan, rather than an ad hoc activity.

Second, Marketing and Sales teams must align. While this is a popular bit of advice, it bears repeating. Marketo APAC Senior Director Chris Connell commented, “Eighty-nine percent of CMOs expect to be responsible for customer experience by 2020, according to our research. And with Marketing taking on more responsibility for revenue, and a greater, long-term customer focus, Marketing and Sales are now a marriage.” Leads have to be handed off seamlessly from Marketing to Sales—otherwise, you’ll see a revenue drop-off.

Third, your sales funnel might be broken. Your sales funnel is the buying process that customers go through before they buy a product. If there’s a gap (or a leak, as it’s commonly known) in any place in your process, your revenue remains low. Performing a funnel analysis is crucial to find where the leaks are so you can fix them.

Finally, you need to prove to the C-suite that Marketing activities are indeed valuable. To do this, regularly submit reports to your management team on sales funnel metrics with specific dollar amounts attached to each Marketing activity. This is the cold, hard proof executives need to demonstrate Marketing’s value to the organization.

Making the shift from a cost center to a revenue center is vital for the Marketing department to stay relevant within your organization.

Interested in learning more about empowering your Marketing and Sales departments? Explore the 451 Research Report: Bridging Marketing and Sales With Intelligent Virtual Assistants.