Why Marketing and Sales Should be Thinking about EBITDA

EBITDA is not a measure most marketing and sales leaders spend much time worrying about.

But they should.

Here's the truth: most marketing and sales leaders barely give EBITDA a second thought.

They're too busy chasing leads, closing deals, and hitting quarterly targets. But here's what they're missing—when you start thinking about EBITDA (earnings before interest, taxes, depreciation, and amortization), you're suddenly thinking like your CEO. You're focusing on what makes your business more profitable and, ultimately, more valuable.

So how do you make this mental shift? How do you start thinking beyond just revenue and start thinking about real, sustainable profitability? Let me walk you through exactly how to do it.

1. Understand customer lifetime value

This is where it all starts. Do you know which customers are putting the most money in your pocket? I'm not talking about who spends the most upfront—I'm talking about who delivers the highest profit margins over time.

Think about it this way: more profitable customers directly translate to higher EBITDA. When you can identify the customers who require less hand-holding to close, who don't demand massive discounts, and who come back for repeat business, you've found your goldmine. These are the customers who boost your bottom line without draining your resources.

The customers who buy from you again and again? They're absolute gold. It costs significantly less to keep them happy than to go out and find brand new customers. When you really understand these patterns, you can build a solid customer lifetime value model that gives you the credibility to sit at the grown-ups' table and talk real business strategy with your C-suite.

2. Know the cost to acquire a new customer

Once you know who your most valuable customers are, you need to figure out exactly how much you should be spending to get them. This is where customer acquisition cost becomes your best friend. It's actually pretty simple—just add up everything you spend to land a new customer.

Here's the kicker: when you can lower your acquisition costs, especially for those high-value customers, your EBITDA goes up. It's that straightforward.

This is exactly why marketing automation and CRM systems aren't just nice-to-have tools—they're absolutely critical. You need to know what it costs to generate each lead, track how many of those leads actually become customers, and understand what's working and what's not in your process. Without this visibility into your customer journey, you're basically flying blind.

When you continuously improve how effectively your marketing and sales teams work together, you drive down the cost of acquiring new customers. And lower acquisition costs mean higher EBITDA—it's really that simple.

3. Build investments in marketing and sales, not just spend money

Let me ask you something: are you chasing the shiny new marketing tactic every few months? Jumping from one strategy to another without any real long-term plan?

Real investment in marketing and sales means being consistent and strategic. You need to figure out where your high-value, high-margin customers are getting their information, and then commit to being there with genuinely helpful, valuable content.

Instead of one-off campaigns that disappear after a few weeks, build marketing efforts that have staying power. Invest your time and budget in ways that will pay dividends for years to come.

Here are some examples of what real long-term marketing and sales investments look like:

• SEO: This creates a compound effect over time as your organic rankings improve and drive more qualified traffic. I wrote a lot about why this is a strategic imperative here.
• Content: Create evergreen content that continues to help your target customers long after you publish it
• Build a great website experience: Your website works for you 24/7, so make sure it's doing its job well
• Customer success: Focus on proactively ensuring your customers succeed, not just reactively solving problems
• Co-marketing: Build genuine relationships with other companies and people who serve your ideal customers

4. Focus on sales enablement and sales effectiveness

Here's a mistake I see all the time: companies obsess over generating more and more leads, but they completely ignore improving the conversion rate of the leads they already have.

Let me tell you about one of our clients, MSI. They came to us asking for help growing their business, and we implemented an inbound marketing strategy for them. The results were pretty impressive.

Instead of chasing every possible lead, they learned to focus on converting the best opportunities. They realized that not all leads are created equal, and by being more selective, they could actually do fewer quotes while winning more business.

The best part of this story? The owner eventually sold the company, and its value increased by a factor of three, largely due to this inbound growth strategy. That's the power of focusing on effectiveness over volume.

5. Help your customers sell for you

Here's something that might surprise you: today's buyers trust your customers' opinions way more than they trust your marketing content. Think about it—when was the last time you made a significant purchase without reading reviews or asking for recommendations?

You absolutely have to build a customer-first culture that delivers the kind of experiences buyers not only demand but actually want to share with others. Customer experience has become the new brand. What others say about your company matters more than what you say about yourself.

This starts with your company culture. When your people are focused on truly helping customers succeed, great experiences happen naturally. If you want to dive deeper into this concept, you can learn more about becoming an Inbound Organization here.

6. Beware the economic forces affecting EBITDA

Economic conditions have a direct and sometimes brutal impact on EBITDA. Inflation, interest rates, market volatility, unemployment, hiring challenges, supply chain disruptions—these aren't just abstract economic concepts. They directly affect your bottom line.

Now, you might be thinking, "Isn't handling economic conditions what the C-suite gets paid for?" And you're right—but these forces will impact your sales and marketing efforts, and you need to be ready to adjust your strategies accordingly.

In uncertain markets, customer retention becomes absolutely crucial. You might need to invest in loyalty programs and personalized customer experiences to secure a steady revenue base. But here's the thing—you'll need to be creative, interesting, and different. Buyers continue to expect extraordinary experiences as the baseline. You can't rest on your laurels or expect what worked yesterday to work today.

Sales and marketing can help stabilize EBITDA by finding new revenue streams, creating flexible pricing models that adjust for demand changes, and lowering costs by adopting technology that drives real productivity improvements.

The Metrics That Matter: KPIs for EBITDA-Focused Marketing and Sales

Understanding customer lifetime value and acquisition costs is essential, but you need specific metrics to track your actual EBITDA impact. Here are the key performance indicators that really matter:

Customer Acquisition Cost (CAC) by Channel: For manufacturing companies, a CAC of 15-20% of the customer's first-year value is a target. According to HubSpot's 2024 State of Marketing Report, companies using inbound marketing see 61% lower CAC than traditional outbound methods. Track this metric by lead source to identify your most efficient channels.

Customer Lifetime Value to CAC Ratio (LTV:CAC): The gold standard is a 3:1 ratio, meaning your customer lifetime value should be at least three times your acquisition cost. Companies achieving ratios of 4:1 or higher typically see the strongest EBITDA performance.

Sales Cycle Length: Shorter sales cycles directly impact EBITDA by reducing the cost of sales. Industrial manufacturers typically see cycles ranging from 6-18 months. Companies that reduce their cycle by even 20% can see significant improvements in profitability.

Lead Conversion Rates by Stage: Track conversion rates from marketing qualified leads (MQLs) to sales qualified leads (SQLs) to closed deals. Industrial companies typically see 10-15% conversion from MQL to customer, but top performers achieve 20% or higher.

Customer Retention Rate: Increasing retention by just 5% can boost profits by 25-95%, according to research from Bain & Company. For manufacturing companies, retention rates above 90% typically correlate with higher EBITDA margins.

Average Deal Size: Monitor whether your marketing efforts are attracting larger deals. Companies focusing on enterprise accounts often see deal sizes 3-5x larger than those targeting small businesses, dramatically improving EBITDA per sale.

Digital Transformation's Impact on EBITDA

The right digital tools don't just improve efficiency—they fundamentally change your EBITDA equation by reducing operational costs while improving revenue quality.

Marketing Automation ROI: Companies using marketing automation see a 451% increase in qualified leads and a 34% increase in sales-ready leads, according to research from Nucleus Research. For a $50 million manufacturing company, this could translate to $2-3 million in additional revenue with minimal additional headcount.

CRM and Sales Analytics: Sales teams using CRM see 41% higher revenue per salesperson and 27% shorter sales cycles. The data insights allow teams to focus on high-value prospects while automating routine follow-up activities.

Predictive Analytics for Customer Segmentation: Advanced analytics help identify which customer segments drive the highest margins. One of our manufacturing clients discovered that customers in the aerospace sector had 40% higher lifetime values than their traditional automotive customers, leading to a strategic shift in marketing focus.

Content Marketing Compound Effects: Unlike paid advertising, content marketing creates compound returns. A single well-optimized blog post can generate leads for years. Companies consistently publishing quality content see 67% more leads than those that don't, according to DemandMetric.

Short-term vs. Long-term Technology Investments: While AI tools and automation require upfront investment, they typically pay for themselves within 12-18 months through reduced labor costs and improved conversion rates. The key is viewing these as EBITDA investments, not just operational expenses.

Troubleshooting: When EBITDA Efforts Go Wrong

Even well-intentioned marketing and sales strategies can hurt EBITDA if not properly executed. Here are the warning signs and course corrections:

The Low-Price Trap: Warning sign: Lead volume is up, but average deal size is declining. Course correction: Review your messaging and lead qualification process. You may be attracting price-focused buyers instead of value-focused customers.

The Spray-and-Pray Problem: Warning sign: Marketing costs are rising faster than revenue. Course correction: Audit your marketing channels. Cut spending on low-converting channels and double down on your highest-performing sources.

The Feature-Creep Sales Cycle: Warning sign: Sales cycles are lengthening and requiring more resources to close. Course correction: Simplify your sales process. Focus on core value propositions rather than overwhelming prospects with every feature and capability.

The Retention Neglect: Warning sign: New customer acquisition is strong, but overall revenue isn't growing proportionally. Course correction: Implement a customer success program. It's often more profitable to expand existing relationships than to chase new ones.

The Discount Death Spiral: Warning sign: Close rates are maintained through increasing discounts. Course correction: Strengthen your value proposition and train sales teams on value-based selling techniques. Sometimes losing a deal is better than winning an unprofitable one.

The Vanity Metrics Mistake: Warning sign: Marketing reports look great (high website traffic, social followers) but lead quality is poor. Course correction: Refocus on revenue-driving metrics. Traffic from your target persona is more valuable than general traffic volume.

The most successful companies I work with treat marketing and sales as profit centers, not cost centers. They understand that every marketing dollar should either reduce acquisition costs or increase customer value. When both marketing and sales leaders think like profit and loss owners, EBITDA improvement follows naturally.

In the most basic terms, increasing EBITDA involves reducing costs and increasing revenues. But EBITDA is more important than revenue. Not all revenue is created equally. Low-margin, high-cost customers may help your business grow its top line, but it will ultimately lose value.

When building your marketing and sales strategies, ensure you talk and think like the CEO and understand EBITDA. Your CFO will thank you, your CEO will notice, and your company's value will reflect the difference.