Follow the Yellow Brick Road to Revenue Performance Management


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Most of us are familiar with the Wizard of Oz. Dorthy and her little dog Toto are swept away from Kansas in a cyclone and find themselves in the Land of Oz where she must follow a yellow brick road to the Emerald City and find a way home.

Like Dorthy, most B2B marketers also find themselves on an undesirable journey in a foreign place- swept away by a cyclone of channel proliferation, 24×7 access to information, and a highly competitive environment. In this environment the traditional disconnected approach to sales and marketing simply cannot generate the type of performance that is expected from the board of directors, the CEO, and shareholders. Sales and marketing leaders still struggle with wrapping their arms around these challenges and effectively leveraging the right tools, tactics, and strategies. We need an Emerald City, a tangible, attainable destination for our sales and marketing journey; we need Revenue Performance Management.

Back in February, Brian Kardon wrote a blog post “The Revenue Performance Bandwagon” where he talked about the birth of this concept within Eloqua. Only a handful of new categories really take hold each year, especially if they are given life from inside a solution provider. But there’s too much right about RPM for this not to take flight as a new category. It’s effectively been staring us in the face for years now, and it’s not really a fundamentally new concept. RPM is the culmination of a variety of best practices and concepts that have been used by B2B Marketers to outperform their peers for years.

Innovation comes in many forms, and sometimes two or more inventions combine to create something entirely new, like the clock-radio or the spork. I would argue that RPM is actually a combination of existing concepts, tactics, and enabling technologies that have consistently allowed early adopters to outperform their peers in this rapidly evolving competitive environment; but now we have some meat on the bones and ultimately a reason for its existence – REVENUE!

Assume for a moment that your organization is Dorothy. Your destination isn’t home, but rather revenue, and the secret to maximizing revenue lies within the Emerald City (Revenue Performance Management). Under this pretense, every organization now has a very real destination for their Sales and Marketing efforts. The good news is 99% of organizations are already on the yellow brick road to Revenue Performance Management. Some are farther down the path than others, but along the way every organization will pick up a series of fundamental capabilities and enablers before they reach the end of the yellow brick road. Some of these can even be quantified by research. Gleanster recently conducted surveys with 625 respondents in B2B Marketing and Sales roles to validate what Top Performing organizations are doing differently from their peers. These best practices can be bucketed into four fundamental building blocks of Revenue Performance Management:

  • Lead Lifecycle Management: Managing engagement with prospects and customers. Tactics include nurture marketing (used by 65% of Top Performers), lead prioritization (used by 72% of Top Performers), lead scoring, and pipeline analytics. These techniques and tactics demand organizations take a holistic view of the lead lifecycle from marketing, to sales, to customer service. All of these interactions represent potential sources of revenue for an organization.
  • Sales and Marketing Alignment: Top Performers are twice as likely than Everyone Else to have a shared definition of a qualified lead between sales and marketing. Historically, we have referred to the coordinated efforts and accountability between sales and marketing as “alignment”. But RPM is fundamentally different from traditional best practices. It’s ultimately demanding the marketing department be treated like the sales department. Measure what matters and hold both functions accountable for revenue. From a RPM standpoint, Top Performers are starting to incentivize marketers for pipeline metrics like conversion from marketing qualified lead (MQL) to sales accepted lead (SAL), not campaign performance.
  • Data Driven Decisions: Gleanster research shows many companies still struggle to make data-driven decisions at early stages of the marketing funnel, stemming from a fundamental lack of data integration between sales and marketing. If you can measure it, you can manage it. Interviews with Top Performers indicated these organizations started measuring for improved forecasting, but continue measuring for data-driven decisions. New demands on marketing and increased targets can be met with predictable knowledge of how much it will cost to achieve these targets, and the most efficient combination of channels to utilize in outbound campaigns.
  • Continuous Improvement: What has been fundamentally absent from most sales and marketing operations is a continuous improvement process across the entire lead lifecycle. This is largely what makes the concept of RPM sticky and unique. The Six Sigma and Lean Manufacturing approach have been transforming the business of Operations for years. Sixty-five percent (65%) of Top Performing organizations (versus 32% of Everyone Else) indicated they engage in “ongoing optimization of sales and marketing processes led by executive leaders in marketing and sales.” A continuous improvement process where organizations define, measure, analyze, improve, control, and re-measure campaign effectiveness, channel mix, and sales operations will lead to the maximization of revenue for the organization.

Revenue Performance Management is ultimately a new name for the Sales and Marketing Playbook. At the end of the day, the goal for sales and marketing is to maximize revenue while managing bottom line costs to maximize profit. Sales and marketing leaders are both accountable for revenue, yet in practice, marketing is accountable for demand generation and sales is accountable for pipeline performance and revenue. The concept of RPM breaks down these artificial divisions of labor to align the organization around a common goal – revenue performance. That’s why RPM should be a fundamental part of your company culture now and in the future. Like Dorthy, you might be surprised to find your organization already has the ability to reach your destination.

Want to learn more on RPM? Check out Gleanster’s Deep Dive titled “Revenue Performance Management: The Sales and Marketing Playbook Finally Has a Name

Republished with author's permission from original post.

Ian Michiels
Ian Michiels is a Principal & CEO at Gleanster Research, a globally known IT Market Research firm covering marketing, sales, voice of the customer, and BI. Michiels is a seasoned analyst, consultant, and speaker responsible for over 350 published analyst reports. He maintains ongoing relationships with hundreds of software executives each year and surveys tens of thousands of industry professionals to keep a finger on the pulse of the market. Michiels has also worked with some of the world's biggest brands including Nike, Sears Holdings, Wells Fargo, Franklin Templeton, and Ceasars.


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