All roads lead to revenue marketing - so is it time to get moving?
Is it time to begin your journey to revenue marketing?
With sales continuing to demand better qualified leads, heads of sales asking for help in managing the top of the funnel, and executives scrabbling for new ways to create revenue, there is growing pressure on the marketing department to step up to the plate.
CEOs are increasingly turning to their heads of marketing and asking them what they are planning to do about revenue.
It is against this backdrop that we are beginning to witness the emergence of the revenue marketer - a specific type of marketer who has revenue or revenue-related accountability through the kinds of campaigns, communications and digital interactions they set up. Revenue marketers are responsible for the top of the sales funnel and interacting with and nurturing leads until they are sales ready, then helping them to accelerate opportunity velocity.
Instead of being measured on areas such as how many visitors the website receives and the number of form conversions there are, which traditional marketers are accountable for, revenue marketers are measured on contribution to pipeline and closed business in terms of percentage and dollars. They also typically carry a ‘quota’ or a revenue number they need to achieve.
And the emergence of the revenue marketer is a reflection on the changing customer that businesses must adapt to cater for.
“How buyers interact with companies during their buying process has changed radically,” says Debbie Qaqish, principal partner and chief revenue marketing officer for The Pedowitz Group. “Buyers are typically 60-70% through the buyer journey before your company has a clue they may have an interested buyer. The role of marketing on the journey is to create a digital dialogue with the prospect during the 60-70% of their buyer journey. Companies who don’t do this are losing competitive advantage in the market.”
To better understand the revenue marketer, The Pedowitz Group has created a four-stage model describing key elements of the move from a traditional marketing organisation to a revenue marketing organisation.
- Step #1: Traditional marketing. Traditional marketing is characterised by the Four P’s: Product, Promotion, Placement and Price. Traditional marketers are focused on creating and implementing marketing tactics and campaigns without good insight into the impact of those initiatives.
- Step #2: Lead generation. The first big step towards revenue marketing is making the transition from traditional marketing to lead generation marketing and there are tens of thousands of companies in this stage along the journey. Lead generation marketing is primarily characterised by one goal: providing leads to sales. It is marketing’s responsibility to pass on as many leads as possible to sales and to make sure that these are quality leads. Many organisations have had a lead generation strategy for years, but the leads they turn over to sales are not fully developed. They are nothing more than a name on a business card, a suit with a pulse. These leads typically come from tradeshows, website visits, or general forms and are passed on to sales for follow-up. Most companies at this stage have an email system in place, but their lead generation practice is very uni-dimensional and there are many manual processes. Metrics tracked at this stage generally include number of e-mails sent, open rate, click-through rate, number of forms submitted, percentage of forms completed, and number of leads sent to sales.
- Step #3: Demand generation. Demand generation is defined as the combined set of activities across both sales and marketing that 1) puts high quality leads into the top of the funnel, and 2) accelerates opportunities through the sales pipeline. Companies moving into this stage have invested in a marketing automation system that is integrated with their CRM system. For many organisations, this move from efficiency to really being able to pinpoint revenue is a major change. While many great things occur in the demand generation phase, revenue produced here is still unpredictable from the top of the lead funnel all the way to close but the marketer is tracking and reporting and is establishing a full closed-loop reporting system. The metrics tracked in this phase are also significantly different as you move from lead generation to demand generation. Key metrics at this stage include the number of scored leads (marketing qualified leads) sent to sales; percentage of MQLs sent to sales that actually convert to opportunities; what percentage of those opportunities convert to close; marketing’s contribution to the overall pipeline; and the average number of days to close. Managing a funnel and focusing on conversion metrics through the funnel are key at this stage.
- Step #4: Revenue marketing. The revenue marketing stage includes everything in the demand generation stage but – and this is a big 'but' – the revenue generated and attributed to marketing is now repeatable, predictable and sustainable or RPS. Revenue marketers use marketing automation technology integrated with CRM to determine how many scored or MQLs are sent to sales and a forecast of their overall conversion rate. Just like a VP of sales, revenue marketers can come into the CEO’s office with a forecast that aligns tightly with sales all the way through the lead funnel from beginning to close.
However, this transition is not necessarily straightforward. In particular, Qaqish believes the process of change management can be painful. “Revenue marketing changes the role of marketing in the revenue equation and this creates massive change in companies,” she notes. “If you ask any serial revenue marketer, they will tell you that managing this change is the hardest, but most rewarding part of the job.”
She has the following advice for businesses that are keen to progress along this path: “First, if you don’t fully involve sales in this journey, don’t do it. Next, marketing needs to understand sales so they can effectively work with them. Go on sales calls, attend meetings, be a part of the pipeline conversation. Then, create programs that produce the kind of leads that are needed by sales.”
Because revenue marketing is a specific kind of marketing that requires a structure, new skills and a new compensation plan, Qaqish also recommends that larger organisations create a Revenue Marketing Centre of Excellence (RMCoE).
An RMCoE is the tangible expression of a company that is serious about moving marketing from cost centre to revenue centre status and in that process better connection with clients and prospects; its organisational structure supports and drives this strategy. A combination of field and corporate roles and responsibilities combine for a holistic approach to driving a repeatable, predictable and scalable revenue result from marketing. The RMCoE greatly improves efficiencies and optimises use of MA for revenue marketing efforts.
In an RMCoE, two separate groups report to a VP of revenue marketing – a Revenue Marketing Centre and a Marketing Operations Centre. The Revenue Marketing Centre drives programs, campaigns, creative, QA, a lead concierge service, content and best practices.
The Marketing Operations centre is responsible for technology, data management, process improvement, reporting/analytics and liaison services to all field marketing. The entire structure works with the field and global marketing teams to provide the optimised mixture of shared services, best practices and ultimately, a tangible revenue result.
While revenue marketing remains in its early stages, the signs are that it is gaining traction, particularly in the US.
“Just this last year, two major companies - Cisco and GE - announced revenue marketing initiatives including internal awards based on revenue marketing. We are also seeing revenue marketing in titles,” highlights Qaqish. “Jim Kanir is the CRO at Vox Mobile and his job is to create one revenue approach that encompasses the new customer, the role of marketing and a sales organisation trained to work in a new environment.”
For those looking to learn more, there is the first summit for revenue marketing taking place in San Francisco on January 27th - REVTalks – while Qaqish also recommends the research provided by Forrester’s Lori Wizdo. And of course there is also Qaqish’s book Rise of the Revenue Marketer.
So, the question remains: is it time to begin your journey to revenue marketing? “What it really boils down to is, as a marketer, do you or will you have revenue accountability?” says Qaqish. “If the answer is yes, get busy.”
Neil Davey is the managing editor of MyCustomer. An experienced business journalist and editor, Neil has worked on a variety of newspapers, magazines and websites over the past 15 years, including Internet Works, CXO magazine and Business Management. He joined Sift Media in 2007.