Companies spend a significant amount of money for their sales and marketing effort.  Depending on the industry, this could vary from 20% to 50% of revenue. These expenditures play a critical role in driving revenues, retaining customers, and achieving overall company objectives.

It is difficult to measure the financial return on these investments.  Companies use different metrics; however, lack of a holistic approach can result in either over- or under-spending.

To maximize value from sales and marketing investment, there is a need for an agreed approach and metric that can be used across business units:

• Traditionally, the metrics focused only on revenue impact and not on Return on Investment (ROI).  An ROI metric can ensure that a company is getting value for its money
   
• Every business unit would like to use their definition for measuring sales and marketing returns.  It makes it harder to compare these returns across other business units
   
• Higher impact can be achieved with the entire process optimized across business units
   
• There is need to balance between short-term and long-term objectives – typically marketing and sales spend is structured to delivered short-term impact