Sales and Marketing Leaders:
Your departments are two sides of the same coin – money spent by your company to drive revenue growth.
Instead of making your case to finance about budget, if you did something differently? What if you worked with your CFO to change the focus of sales and marketing being expense centers to targeted investments in growth?
That’s the idea behind the commercial ratio (visit www.commericalratio.com) to learn more about it.
The math is straightforward.
100% of sales and marketing OPEX should be focused on driving revenue growth.
Retention costs are picked up by R&D (product improvements) and Cost of sales.
The money you spend in a year should produce a result during that year.
Total revenue this year – Total revenue last year / total sales and marketing expenses this year.
Learn more about it from a webcast, Kunal Mehta (from private equity firm TCV), and I recently delivered. Here is the link to the recording. https://bit.ly/2A5HAKi
Sales is Simple
Simple is Hard