Revenue attribution is hard. Even with AI and all the compute we have, it’s difficult to say with certainty, what it was that caused a customer to spend money with you. It’s getting better. One of the biggest benefits of ecommerce is being able to trace a click from a social media post or an ad to a product page view, to cart, to checkout. Similarly, old school sales-people can claim certain orders, and many sales oganisations are structured in a way that incentivises sales and rewards on a performance basis.
Recently, I have heard it argued that Marketing should be rewarded in a similar manner - based on performance. It’s an interesting idea, but it might ultimately end up costing more than the fixed cost, full-time salaries marketers are typically remunerated with.
I’m quite happy to put my hand out for commission on every sale that is not attributable to a specific salesperson, every online sale and every unassisted retail sale. Because if it can’t be attributed to Sales, it has to be attributed to Marketing.
David Fuller - Fractional Chief Marketing & Growth Officer
Dubai, GCC, MENA
Think of Marketing as dark matter. You can’t see it, but you know it has an impact. Astronomers infer dark matter exists because galaxies rotate faster than the visible mass can explain. You can’t break it down into types. You can’t remove it all together or the effects would be catastrophic.
The online sale that happened in low season, at full price while no campaign was running can only be attributed to Marketing. The accumulated brand value of the previous marketing spend, still working. Influencing the buyer, perhaps decades later. So yes, give me a percentage of those sales. The ones that have to be attributed to marketing, because they can’t be attributed to anyone else.
Now. There are good and bad marketers. The weak ones, who know their contribution is a net-cost, will never go for a deal where their remuneration is performance based, but a good marketer should push back and say - be careful what you wish for.
I once worked for a client who wanted me to reduce my fixed fees. I offered to take a percentage instead. They agreed to a modest increase in the fixed fee, but they wouldn’t give me a share of the upside - that would have cost them a lot more. The other way to push back as a marketer, which has some risks, is to call the bluff. “Fine. Let’s stop all marketing.”
The paradox, is that for companies that are very good marketing, this would have no short term impact. But let’s take a brand like Apple. Why do they still do outdoor advertising? They can’t prove that a billboard results in a specific sale. But they know the reason they can charge $1000 for a phone with the same feature set as a $100 phone is Marketing.
The problem isn’t marketing. It’s bad marketing. Marketers that don’t understand price elasticity or switching costs, or substitution patterns, or customer lifetime value, or marketers that don’t know the difference in sales within a 5 mile radius of a billboard when it has your ad on it versus the periods it doesn’t and the cost of that billboard versus the delta in revenue.
Immediate ROI is not always the goal though. Other marketers with other marketing strategies might not need an ROI from it this quarter. Maybe the billboard is situated next to a football stadium sponsored by your biggest competitor. Or maybe, your priority target market drives past it every day and subconsciously it has an impact outside of the reporting period.
Just to cover off the performance and reward piece. I don’t believe that paying sales people a low base and forcing them to survive on commission is a great way to run a business. I believe it incentivises short term success that can lead to undesirable behaviour. I also don’t believe that marketers should not have targets.
Some marketers are taking a different approach. They are leaving companies that don’t reward their work, forming their own companies, vibe coding their own apps and using their marketing skills for themselves. This is a real risk for companies looking to attract and retain talent. The affiliate boom saw this. Marketers that were good at SEO and digital marketing became mercenary guns for hire. Today it’s a little different. If the only moat is brand - and anyone can vibe code your feature set, then there are only two ways to win. The first is to hire great salespeople. The second is to have great marketing.
Sales and marketing both have the same goal - for want of a better word - growth. Marketing can afford to be generous and say that Dan deserves his commission for hitting his targets, despite the leads being generated from the trade show that came out of Marketing’s budget. Sales is an internal customer of Marketing in that context. But Marketing needs to start saying about the unattributable revenue. Hey - that was us.