The Grand Unified Theory of Revenue Generation


Share on LinkedIn

The world of theoretical physics offers an interesting analogy to the revenue generation value chain that starts in marketing and ends with sales.Physicists have struggled for centuries to create a coherent and mathematically defensible Theory of Everything to explain all fundamental forces in the universe: those encompassed by the Grand Unified Theory (electromagnetic, weak and strong nuclear forces) and gravity. Recent thinking postulates string theory as the underlying model that ties everything together. Although it offers a rallying point for many types of physicists, some dispute the construct and insist the answer lies elsewhere.Proving or disproving string theory will probably not happen in our lifetimes, so the debate is endless.

The more mundane world of selling stuff and making money has similarities.Most businesses operate with a neoclassic model that defines the two fundamental forces in the revenue generation universe:marketing (or more specifically, demand generation) and sales.We’re very familiar with the wall between them, the ongoing clashes and the struggle for control over portions of the end-to-end sales cycle.

We are more than a dozen years into the 21st century, and it’s absurd that the debate between sales and marketing hasn’t changed much in decades.It’s akin to the historical dispute between particle physicists and astrophysicists.What’s needed is a Grand Unified Theory of Revenue Generation (GUT-RG) that replaces the inefficient traditional structure and promotes a better model of finding customers and selling stuff.(We’ll leave the business-oriented Theory of Everything to the economists.)

This begs the question: What’s our “string theory” that underpins the GUT-RG and serves as a revenue rallying point? That answer, believe it or not, is simple: the sales funnel. The “sales” adjective does not imply ownership – it’s the result of a single unified suspect-to-customer process. And marketing automation is the technology enabler that makes sales funnels powerful tools. (More on that below.)

It’s important to come to terms with the fact that the essence of any funnel model is an integrated process that implies little or nothing about organization structure.Yes, one can argue that marketing should take responsibility for all one-to-many communications and sales should focus on one-to-one interactions.And yes, different skill sets are needed.And yes, traditional organizational boundaries define the scope of existing automation solutions. Although those distinctions drove organizational structures that served us well in a different era, today they have been superseded by the need for more integration, transparency and a single point of accountability for a company’s revenue generation activities.

Marketing automation platforms, which in essence are de facto sales funnel managers for the enterprise, extend their reach into areas that had been within sales organizations’ walled gardens.By the same token, the notion that marketing should exercise primary control of the funnel is both obsolete and unhealthy.These platforms provide concrete touch points for all participants in the funnel process (even if indirect access is through a CRM solution is required).

Here are other indicators that show why the old separation is no longer relevant:Marketing increasingly talks directly to prospective customers.Sale reps frequently re-qualify so-called “qualified” leads handed to them by marketing.And they’ve always generated their own leads from inside sales and their own sources.The end-to-end sales funnel is a series of incremental filtering mechanisms and stepwise refinements that lack a hard marketing-to-sales inflection point.It makes no sense to cleave a process chasm to serve an arbitrary need for an organizational boundary.

We’re becoming, in general, more scientific about how we run the enterprise.Marketing and sales are more process-oriented than in the past, which means we measure and optimize continually without regard for organizational boundaries.The business counterparts to particle physicists and astrophysicists are finding more common ground; and the really smart ones understand that cooperation and common ownership yield superior results.

In the last few years, a few forward-thinking companies have defined a new executive role to manage the GUT-RG in a seamless manner:the Chief Revenue Officer (CRO).Whether or deliberate or incidental, most positions with this title encompass the revenue generation value chain – as defined by the sales funnel – in a single organization.Although we think this is a terrific idea, it’s probably too soon to conclude if the concept is a temporary fad or a long-term evolution in our industry.We’re betting on the latter because we’re seeing early success from companies that adopted this model.

Go forth and sell more stuff by reimagining your universe!

Republished with author's permission from original post.

Shreesha Ramdas
Shreesha Ramdas is SVP and GM at Medallia. Previously he was CEO and Co-founder of Strikedeck. Prior to Strikedeck, Shreesha was GM of the Marketing Cloud at CallidusCloud, Co-founder at LeadFormix (acquired by CallidusCloud) & OuterJoin, and GM at Yodlee. Shreesha has led teams in sales and marketing at Catalytic Software, MW2 Consulting, and Tata. Shreesha also advises startups on marketing and growth hacking.


Please use comments to add value to the discussion. Maximum one link to an educational blog post or article. We will NOT PUBLISH brief comments like "good post," comments that mainly promote links, or comments with links to companies, products, or services.

Please enter your comment!
Please enter your name here