Marketing Has To Be Predictable – So How Do You Forecast Accurately?

One of the core values I stated in a previous post is that marketing must be predictable. It seems obvious, yet it’s also one of a marketer's biggest headaches. 

Why?

Because more and more, teams like sales and finance depend on their marketing leaders to jumpstart all their forecasting. At the same time, a lot of business processes haven’t caught up with this fact. 

If you’re a Marketing leader at your company, you’ve probably felt frustrated by this. 

So, what is the actual problem, and how do we get to a solution? Let’s explore the marketer’s role in forecasting.

Why Predictability Matters in Marketing

Think about it – investors love SaaS because, as a business model, it’s predictable. Sales must be predictable, but their opportunity is finite. Take X amount of leads and convert them. On the other hand, marketing has an infinite field to chisel down from. So it’s the marketing team that must help drive predictable growth. 

It's critical to understand your SEO, paid, outbound, mid-funnel, events, etc. They don't just need to be successful. They need to provide predictable results. The budget number is based on your success, and so are sales headcount numbers.

Here’s what can happen if you predict wrong:

  • Miss low? The culture in sales is at stake because they may over-hire and end up with a bored sales team.

  • Miss high? Better, but this can create challenges in the funnel, and you may need to pull back the budget, which slows down momentum. 

This is why forecasting is such a critical skill for marketers. Marketing is what helps make sales predictable. And we all need predictability.

The Sales and Marketing Challenge

Here is an actual situation I saw once:

A salesperson comes out of a meeting with finance and says, “Hey [VP of Marketing], you need to tell me how many leads you can drive next quarter, I just met with [CFO], and they are expecting $XXXK of net new revenue from me.”

CLEARLY, marketing should have been in the meeting with the CFO and VP Sales in this situation. And yet, this disconnect is the current state of forecasting in SaaS sales and marketing. Sales need marketing to generate a pipeline but don’t always include them in the planning process.

It wasn't always this way. In my early days in the SaaS world, sales took the number and owned it. I'm not dissing sales. The roles have changed. They are the eyes and ears of many organizations, drive customer feedback, and focus aggressively on closing out deals (which is hard).

But a few steps are missing here.

How to Build Predictability Into Your Marketing Strategy

Here are a few key steps to get started building predictability in your marketing strategy.

  • Collaborate with the sales team: Your marketing and sales leaders need to work closely throughout planning and execution.

  • Get all your data in one place: All too often, our data is siloed between departments. Companies need a unified database that every team can access.

  • Model out each stage of your revenue cycle: It may sound tedious, but marketing leaders need to model out each stage of the revenue cycle so you can predict potential areas of risk and growth.

  • Categorize and prioritize: Make sure you categorize your leads and measure how they move through each cycle. Track things like conversion percentage and velocity.

  • Be ready with your numbers: Plan ahead of time so that when your numbers are needed, you’re ready with them. Be prepared to defend how you got there, and feel confident because you did the work.

Final Thoughts

Marketing leaders have a unique position to build predictability into revenue planning. But all too often, sales and finance leaders don’t involve us in the process. 

We can be proactive by building out robust modeling and forecasting strategies and actively collaborating with the sales team throughout the year. 

Planning and a good process for prioritization are critical for successful marketing. Understand this, and work on ways to build out a more predictable marketing strategy in 2022.

You also can check our Podcast page, we tackle all of the challenges of B2B marketers looking to build systems that scale.

John Short