At executive staff and board meetings, the number one topic of discussion is never the upcoming marketing program or the new brand strategy – it’s almost always the revenue forecast. Everyone wants to know if the company will make the target for this quarter and what next quarter is going to look like.
Invariably, this discussion is led by the sales executives, with little or no input from marketing. This ability to make revenue forecasts – and to be held accountable for delivering against them – is the single biggest factor that gives sales more credibility (and power) than marketing at most companies.
But in a world where buyers are doing their own research and delaying engagement with sales, the sales team has less and less visibility into future revenue; a traditional forecast completely misses the opportunities that are being cultivated by marketing but have not yet entered the sales pipeline.
This is why marketing forecasting is so important. I am not talking about “traditional” marketing forecasts, which take the form of a top-down market size analysis. I am talking about bottoms-up predictions of future revenue and pipeline based on a quantitative understanding of how potential customers move through the revenue cycle. Done right, the marketing forecast gives the CMO the confidence to stake a portion of his or her compensation on meeting the goal, and the CSO relies on marketing’s input to make a valid forecast for the period.
For details on why marketing forecasts are so important in the age of information scarcity, and detailed step-by-step instructions on how to implement them at your company, check out my ebook: Marketing Forecasting: The Hidden Secret of Today’s Most Accountable CMOs.