The conversation nobody's having

Every business I walk into can tell me what marketing spent last year, and what it plans to spend next year. Almost none can tell me what that spending returned.

The budget is the one number finance and marketing share, so it becomes the whole conversation: how much, up or down, and by how much. The more useful question, what did the last pound actually bring back, rarely gets asked.

It is not anyone's fault exactly. Finance sees revenue and EBITDA. Marketing sees leads and pipeline. Both are reporting honestly. But the number that sits between them, what it costs to win a customer against what that customer is worth, belongs to neither, so it goes uncalculated. Marketing ends up measured on activity, and activity is not the same thing as return.

That gap is the whole reason this letter exists. Once a month I'll take one idea from the commercial side of marketing and set it down plainly: a number, a case, a way of thinking that helps the people who hold the budget and the people who answer for it have a better conversation than the annual haggle.

The number

From the workA business running two companies at once

A $300M business, spending $3M a year on paid search, every dashboard green. Calculated properly, by segment rather than blended, the segment almost all the spend was chasing came in at 0.012:1: about $3,000 to win a customer worth roughly $40. A little over a cent back for every dollar in.

The blended number had hidden it, and no single function owned the ratio that would have shown it. The fix needed no new budget, just the same money pointed at the customers worth winning. This is an illustrative, anonymised case, but the conditions that produced it are everywhere.

This month's reading

Reference. Forrester (2024), B2B marketing measurement. The case figures are illustrative and anonymised; lifetime value is calculated on gross margin, net of cost-to-serve and discounted, against fully-loaded acquisition cost.