A State-of-the-Art Strategy for Maximizing Your Marketing ROI
Revenue Performance Management (RPM) is a strategy that allows you to track and measure each of your marketing initiatives so that you can connect them to the amount of revenue they generate. Then you can focus your resources on the marketing programs with the greatest return. Revenue Performance Management is a comprehensive business strategy that involves not only the Marketing department, but the Executive team and the Sales department as well. Here’s what Revenue Performance Management means for the different teams in your organization.
RPM & the Marketing Department
Revenue Performance Management is made possible by marketing automation software. This software allows the Marketing department to do a lot of things, including score leads based on their behaviors (downloads of a white paper, visits to a pricing guide, etc.) and demographics (has a VP title, is in the health care industry, etc). This allows the Marketing department to see which programs are most successful at moving leads through the buying cycle. It also allows the Marketing department to only pass leads to the Sales team only when they are truly ready to be approached by a Sales representative.
When the Marketing department only passes quality leads to Sales, its standing with the Sales department improves. After all, the Sales team prefers to spend their time on leads that are most likely to convert into deals. Moreover, when the Marketing department can demonstrate their impact on the top line with actual data, its standing with the Executive suite also improves. B2B marketing comes to be seen not as a cost center, but as a revenue generator. In short, when you can demonstrate the ROI on marketing, the Marketing team earns a seat at the Executive table.
While marketing automation is a necessary component of a Revenue Performance Management strategy, it is not the only technological piece. When marketing automation is integrated with a Customer Relationship Management (CRM) system, it comprises a complete RPM platform, capable of tracking, measuring and managing the entire buying cycle with the customer, from the time they first interact with marketing materials, to the moment the sale closes, and on to the customer services engagements afterwards. Marketing automation is simply the most recent of these two technology pieces to be invented, so its development is what has finally made Revenue Performance Management possible as a business strategy.
RPM & the Sales Department
The impact of Revenue Performance Management on the Sales team is simple: they get better leads, close more deals, and earn higher commissions. Implementing a Revenue Performance Management strategy starts when the Marketing and Sales teams get together and agree upon the definition of a qualified lead. In other words, they agree on the criteria a lead must meet before it is ready to be passed from the Marketing department to the Sales department. Because the Marketing team can score leads with their marketing automation software, they are able to ensure that they only hand off leads that actually meet these criteria. Because the Sales department is no longer wasting time on leads that aren’t ready to buy, they are able to close more deals.
This also means that the Sales team will spend more time doing what they’re hired to do: Sell. When Sales reps receive poor leads from the Marketing department, they get frustrated. Eventually, they begin to prospect on their own, figuring they can drum up better leads than the Marketing department. This means the Sales team is duplicating the work of the Marketing team, and neither one is doing that work very effectively. Under a Revenue Performance Management strategy, however, the Sales team trusts the Marketing department to only send them worthy leads, so they spend more time selling and less time prospecting.
RPM & the Executive Suite
Revenue Performance Management is an exciting concept for the C-suite. In the past, Executives have largely viewed sales as a number-driven science, where the ROI of every dollar spent could be calculated. By contrast, the Marketing department seemed to be performing magic. They would go to trade shows, create some brochures, host some webinars and somehow produce leads from all of this. But there was no telling how many sales leads, or how good they would be, or how much they would cost to produce. So the C-suite closed their eyes and took their best guess as to how much money they should allocate to marketing. They viewed the Marketing department as a necessary cost.
Under Revenue Performance Management, however, the Executive team can see a clear connection between the money spent on different marketing revenue programs and the leads that ultimately convert into deals. No longer is marketing an expensive realm of mystery; now it is clearly driving revenue generation. Over time, resources can be allocated to maximize that revenue. The companies that excel at Revenue Performance Management will ultimately be able to forecast their revenue not by looking to their sales team, but by looking at the pipeline built by Marketing. Executives will be able to identify issues before they hit the Sales team and take actions to correct their course.
Want to know more about Revenue Performance Management? You’re in luck. The man who literally wrote the book on Revenue Performance Management is also our CEO and Co-Founder, Phil Fernandez. He is hosting a webinar that will show you how to design and implement an RPM strategy for your organization on May 1st.