Marketing, Sales, Inbound And Outbound — They’re All Out; Now It’s All Revenue
Marketers mess everything up. We put labels on everything. We come up with fancy names that help us get promoted but rarely help the people who have to work with us.
First came outbound marketing, where we pushed our message out to as many people as possible as many times as possible for reach and frequency.
Then came inbound marketing, where we had to earn attention instead of interrupting to gain attention. Recently I saw “allbound,” which allegedly includes both inbound and outbound.
All of these types of marketing only affect part of the challenge — the lead generation part. Unfortunately, that’s just 50% of the puzzle. It’s like giving you a luxury sports car without an engine or a high-end set of golf clubs without any balls. Marketing without sales rarely produces revenue, and the name of the game is revenue.
Let me introduce revenue performance management.
Oracle tried to define revenue performance management (RPM) six years ago by studying how high-growth companies continually drive month-over-month revenue growth. They define RPM as “a systematic approach to identifying the drivers and impediments to revenue, rigorously measuring them and then pulling the economic levers that will optimize marketing ROI and top-line growth.”
They went on to add, “As a business strategy, RPM requires the right mix of people, process and technology in order to drive real revenue growth. Marketing software is certainly one enabling technology, but not the only. After all, businesses use all kinds of tools and services to drive revenue — from social media tracking tools to website analytics to sales force automation. But even more important than investing in technology is the development of business practices that are universally accepted and adhered to.”
Oracle also found that a pattern emerged among best-in-class adopters of RPM, showing the following four business practices are key to a successful RPM strategy:
- Modeling the integrated sales and marketing funnel
- Focusing on continuous improvement through benchmarking
- Making data actionable with deep analytics
- Using long-term forecasting to identify future revenue opportunities
Seven years ago, Marketo wrote a blog article about RPM. They focused on using a single revenue cycle that includes both marketing and sales, making a continuous improvement effort based on data, and transforming your people, processes and the technology required to deliver.
Today, this is exactly what we do. I guess you can say things have come full circle. What was in back in 2012 is now in vogue again. It’s no longer enough to drive website visitors, downloads, leads, webinar registrants or even sales opportunities. Today, you have to plan, build, manage and optimize the full revenue cycle from click to close — revenue performance management.
This is a much more complex approach to both marketing and sales, so let’s break it down.
Modeling The Integrated And Orchestrated Marketing And Sales Funnel
It’s fairly easy to model your existing revenue funnel. How many visitors come to your website? What’s your conversion rate to MQL or new contacts (depending on your marketing vocabulary)? What’s your conversion rate down into sales opportunities? Finally, how many of those do you convert into new customers? Not hard; most of you have access to that data.
You can also overlay any outbound lead generation activities, too. Doing events? Making outbound calls? Sending outbound emails? Put all of these other top-of-the-funnel activities into your current-state funnel and you should have a good idea of what’s working well, what’s just working OK and what might not be working at all with your current revenue generation effort.
The big challenge is creating the funnel you need to get to the revenue level you aspire to hit this month, next month, next quarter and for the year. This is an excellent way to validate if your company’s revenue projections are reasonable. If you’re doing $10 million and next year you expect to do $20 million, knowing what your $20 million funnel needs to look like is the only way to know if your revenue goals are actually attainable.
Continuous Improvement Through Industry Benchmarking And Company Baselining
Since we’re talking about attainability, let’s start using industry benchmark data to see how much time and effort is going to be needed to move your company from today’s baseline funnel to tomorrow’s future funnel.
Specific industry behaviors and benchmarks should be used to compare your company’s performance to others in your industry. You want to be looking for averages, but you also want to look for performance metrics for companies that outperform the norm.
For example, research studies show that on average, companies produce a .75% conversion rate on all top-of-the-funnel leads to new customers. But top-performing companies can produce a 1.5% conversion rate from top of the funnel to new customer. That is a dramatic spread, and it means you can double revenue with more strategic revenue generation thinking that crosses both sales and marketing.
Making Data Actionable With Deep Analytics
Data is everywhere — website data, email data, search data, content data, sales data and behavioral data on prospects and customers. Data exists for every aspect of both the marketing and sales processes. The key is to know what data is relevant, when to check it, where to find it and how to respond to it.
All data is not created equally, either. For example, take bounce rate, which is the percentage of people who land on your website and then leave without taking any action. Is a 90% bounce rate bad? Some people might say so, but others might ask to unpack that data a little more. How do you know?
If a lot of those visitors are reading your blog, then the bounce rate might not be high, because they’re coming to read and leaving. That’s the purpose of the blog. You might want them to click or convert on that blog, but their reason for visiting is to read that one single article.
Knowing what the data is telling you and knowing what action to take based on the analysis requires extensive testing and experimentation, plus tons of experiences. Almost every company program performs in a unique way. What works for you might not work for your best friend’s company. What works for your biggest competitor might not work for you.
You can’t copy your way to revenue. You can’t read or watch your way to revenue. You can’t best practice your way to sustained revenue growth. You and your team (or you and your agency) must know how to interpret your data, respond to that and create the action steps for your company to see program performance improvements.
Long- And Short-Term Forecasting To Identify Future Revenue Opportunities
Once you start thinking about revenue differently, you’ll start looking for it across your organization. For example, most marketing and sales teams overlook the revenue opportunities within existing customers. Our research shows that only 25% of companies devote any time and money marketing to existing customers. But when we ask them how many of their existing customers buy their full suite of products or services, their answer is only 18% of customers on average.
This insight and opportunity only surfaces when you start looking at the data behind revenue generation. Your current-state funnel is not going to be able to get you to your revenue goals. If it could, you’d already be at that level. When you create the future-state funnel, you might realize that you could be a year away from reaching that level, or the investment required to create that level is beyond your current budget. Being able to forecast better will help you uncover new revenue opportunities, and then you’ll be able to create programs to realize that revenue.
The buyers (your prospects) are smarter than ever before. They have access to more information than ever before. More people are involved in the purchase decision than ever before. Their buyer journeys have more steps, twists and turns than ever before. Your business is more transparent than ever before. All of these factors make creating a prospect experience that influences them to choose you a major challenge. You’ll need new tools, new techniques, new measurements and new processes if you want to create a scalable, predictable and repeatable revenue machine.
Figuring out what to do, knowing when to do it, building every aspect of your tactical program, setting baseline performance metrics and then running an optimized revenue generation program takes years of experience. Best practices don’t exist; it’s only about how your program performs. An entire set of new processes (like Agile development, data analysis and a testing methodology) is required for consistent performance. If you’ve never used these processes before, it means learning an entirely new set of skills.
Square 2 Marketing – Revenue Is Earned With Experience, Methodology And Insights!