Revenue Performance Management: Align Marketing and Sales to Optimize Top-Line Growth

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Revenue Performance Management is a systematic approach to identifying the drivers and impediments to revenue, rigorously measuring them, and then pulling the economic levers that will optimize top-line growth. Really what RPM provides is an analysis framework that allows businesses to make the right investment decisions across the entire marketing and sales spectrum. Without it, making a choice between such disparate options as investing in a webinar series or hiring another sales person would be left to gut hunch or organizational politics.
RPM is focused squarely on measuring and improving your results.

As a discipline, it does this on three levels; dashboarding, benchmarking, and optimizing.

The first of these, dashboarding, is about understanding where you are. How big is the potential audience for your message? How many of those are aware of you? Who is in your funnel? How many of those become leads? Does sales close them, and how quickly? Only with this in place, can an organization truly understand how buyers buy, and therefore what aspects of the digital marketing strategy they have in place are working, and which are not.

The second component is benchmarking. RPM looks at benchmarking holistically, in order to understand and optimize performance. At the simplest level, benchmarking one campaign against another to determine which to invest in is a very valuable exercise. However, only with a proper RPM framework in place can two campaigns with slightly differing outputs be compared.

For example, if comparing a search campaign to a webinar, it might be tempting to look at the simplest metric of the number of new inquiries, but each campaign is focused on a different stage of the funnel, and therefore this comparable is false. RPM provides a framework for benchmarking the campaigns against each other, so that the marketing qualified leads delivered by the webinar can be compared against the raw inquiries delivered by the search campaign.

Equally valuable is benchmarking against a plan. Comparing counts and conversion rates to historicals and to revenue projections two or more quarters out allows an understanding of whether revenue growth goals many quarters into the future will be achievable, and what gaps will need to be overcome in order to achieve them.

The third and final component of RPM within a top-performing organization is continued optimization. With a detailed model of the buyers’ buying process in place, organizations can understand where increased investment is needed, and what the likely outcome will be. Investments in search or advertising can be compared against investments in ROI calculators of sales professionals, based on each investment’s ability to maximize the overall revenue performance of the organization.

Each of these optimizations may affect an organization’s overall digital strategy, and may contribute insights that lead to major rethinking of it. However, RPM acts as a framework that allows a digital strategy, once conceptualized, to be implemented and optimized in order to drive the maximum amount of revenue for the business.

The RPM Journey

RPM is, in many ways, a journey. While there is no single tactic that must be in place prior to commencing, RPM does rely on an organization adopting a view of the buying process that has the buyer firmly in control of the majority of the information he or she needs in order to reach a buying decision. Based on this view, organizations who are set up for success with an RPM initiative will have invested in a broad spectrum of digital content assets that map to the needs of each buying role at each stage of the buying process.

RPM does rely on an organization adopting a view of the buying process that has the buyer firmly in control…

In order to gain the needed insights from this wealth of content assets, successful organizations develop a discipline of tracking online behavior across these digital assets. Whether anonymous behavior, or known, this behavior is used to identify indicators of purchase intent, and then used to prioritize leads for sales or hold those leads back and engage with them in a longer term nurturing approach.

Underlying this effort, of course, is a marketing database that contains an understanding of who each individual is and what is known about them. This database is the foundation for understanding who within the buying process is a good fit as a buyer, and who is sufficiently engaged to warrant a conversation with sales. Maintaining this database’s quality and consistency is key to driving a high performance revenue process.

With a marketing philosophy centering around enabling buyers with all the information they need, the right technologies in place to begin observing and deciphering customer intentions based on their online behavior, and the beginnings of a strong marketing database, an organization is ready to begin building a high performance revenue organization through the processes of RPM.

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Measuring Success

Marketing has always been a difficult area of the business to measure return on investment, and sales is only slightly easier. In complex and considered purchase environments, this challenge is magnified, as most efforts do not directly trigger revenue, they only guide buyers in the right direction. The best way to measure the overall effectiveness of your revenue engine is to measure the cost to acquire one dollar of revenue. This is the total spend on marketing and sales divided by the total revenue generated. This metric, more than any other, provides a measure of the efficiency of your revenue engine.

In addition to efficiency, high performing revenue teams also measure growth as a critical metric on the health of their businesses. Many of the best performing companies across multiple industries, are that way because they aggressively manage and optimize their investments into revenue.

The returns on investing in RPM as a framework come from greatly increased efficiencies in sales and marketing. We’ve seen leading practitioners reduce sales cycle times, increase lead flow, reduce cost per lead, increase competitive win rates, and increase sales team productivity to name just a few areas in which significant hard-dollar returns have been seen. On top of this, the clarity of understanding that can be gained in terms of where to invest allows leading practitioners to avoid making the investment mistakes that their competitors are making.

Best Practices

The key to improving your results from an RPM initiative is organizational alignment. From the executive team down to the front lines, the team must be aligned with the idea that buyers are in control of their own buying process, and the job of a revenue organization is to facilitate these buyers. At each step, RPM leaders put the instrumentation in place to objectively understand where each buyer is in their own unique buying process. Each touchpoint updates a central view of the buyer, and this view guides both how individuals are engaged with, and how they are represented in metrics that roll up to the executive team’s view of the revenue process.

In order to do well at this effort, an organization must be aligned in a number of ways. First, data on buyers must be seen as extremely valuable, and kept clean and up to date at every point in time. Second, the buying process must be well understood and all touchpoints within it well instrumented. Third, the processes and analytics that marketing, sales, and the executive team rely on must be driven from this understanding of each buyer.

Making these organizational alignment changes is not simple, and is not fast, but leads to a tremendous understanding of the economic levers that drive revenue within a business.

This article is part of a free e-book for Chief Marketing Officers:
Strategic Roadmap for Digital Marketing
Learn how to engage with customers and create value for stakeholders in a complex digital world. Covers digital channels, marketing techniques, accountability and technology. (No registration required to view/download PDF.)

2 COMMENTS

  1. Steve,

    I enjoyed reading your article. I specialize in helping companies maximize their sales revenue and although I approach alignment it a bit differently, I found your writing to be thoughtful and interesting.

    Please let me know when you have additinal posts.

    I am going to look up Eloqua for more information…

    Thanks

    Todd

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