Answer:
Someone asked me an interesting question the other day: How do you split revenue between marketing and sales?
The founder of the company had given their sales and marketing teams each a revenue target, believing that both should be jointly responsible for growing revenue. And, knowing that I ran a revenue attribution company, he wondered how I would assign credit in this situation.
Here’s the problem: Revenue attribution is about visibility, not just assigning credit.
Think about it. Would a 50-50 split reflect reality? Why not 70-30 or something else? If sales went away, do you still retain half the revenue? Obviously not.
So, what is the best way to recognize the contributions of sales and marketing respectively?
To start, both teams should contribute to revenue in different ways. But if the business fails to attain its revenue goals, both should jointly own that failure.
My breakdown is simple:
- Marketing drives pipeline
Pipeline here refers to a dollar figure derived inside sales’ assessment of a qualified prospect. It is not a vanity metric like 100 leads. If the revenue goal is $10 million, and the win rate is 10%, then marketing should be aiming to generate a $100 million pipeline. Inside sales and channel partners, who may contribute to pipeline, should be included here as well.
- Sales drives revenue
Conversely, given a big enough pipeline, sales is responsible for winning deals and realizing that revenue. Sales leaders would have to use the levers available to them, such as incentive compensation management, territory planning, and more, to reach that goal. But ultimately, win rate and deal size are the main metrics to track.
This setup, as you might have noticed, reflects most B2B organizations. Marketing creates demand and hands it off to sales.
The key difference is that with revenue attribution, this setup works. Because sales and marketing have complete visibility of marketing investments and revenue, they are able to make optimal decisions from start to end.
Sona, for example, delivers more than 95% attribution coverage thanks to an advanced first-party tracking system and a built-in ETL system that synchronizes and processes data from all GTM platforms. With the right data collected and assembled, there is a single source of truth for what activities and levers contribute to revenue.
Marketing can see exactly how much pipeline a lead from every channel, segment, and campaign generates and can shift investment to meet its targets. It can also be held accountable for pipeline growth because every dollar is more accurately attributed.
Sales can see the complete buyer’s journey and increase its win rate using activity-related insights. For example, an AE could prepare a personalized demo for a prospect who’s visited various pages related to a particular product, and proactively reach out with a personalized message.
To sum it up, revenue attribution is about visibility, which naturally leads to accountability and more seamless cooperation between marketing and sales. Contributions from sales and marketing will become much clearer and the focus can shift to winning as a team.