What is Revenue Performance Management? A Whiteboard Session
While in Austin, on Marketo’s Revenue Rockstar tour, Jon Miller had the chance to rock the whiteboard at the Software Advice offices. This is just the first video out of three whiteboard sessions (so stay tuned for more!). Read below for a quick summary, or watch the video at Software Advice or on YouTube.
The single biggest opportunity for business today is Revenue Performance Management. It begins with the need for companies to grow revenue. No matter what function you’re in, at the end of the day, all your board cares about is revenue.
The Revenue Imperative
As we come out of the recession, we’re seeing the stock market at record highs, and companies with record profits even as revenue has been flat or down. Still, today, you can’t cut anymore, and you can’t find new growth by increasing profits through cost savings. Companies have to find a way to get growth back on the board by increasing their revenue. So, how do we do this?
We are overwhelmed with third-party information. Whether it be through websites, social media sites, or third-party vendors, buyers a using the readily-available information to cut out the middleman. (Which in this case, would be Sales). Buyers want to connect with sales much later in the buying cycle than ever before. This transformation is what has turned modern marketing on its head. Are the old processes obsolete or are they dysfunctional? Either way, how you generate revenue today contributes to how you make transformational gains for your company. That is the essence of revenue performance management.
Companies can take advantage of increased revenue growth and all the opportunities presented by today’s buyer through RPM (Revenue Performance Management). One of the single most important concepts behind RPM is that marketing and sales transform the way they work – and work together – to create a single revenue cycle. A lot of companies are focused only on the sales cycle. However, in a world where marketing is taking more responsibility for revenue, and where buyers are meeting sales later in the process, it’s not sufficient enough to just look at the sales cycle. You have take it back to the beginning of the revenue process and apply the same rigor of breaking things into stages, and tracking movement through those stages over time. A single integrated revenue cycle is a key element of revenue performance management.
Another key component of RPM is Six Sigma. You should always be updating and improving your business processes through continuous measurement. Measuring the effectiveness of the people and programs throughout the entire revenue cycle helps to ensure you can provide predictable results and prove sustained ROI.
Lastly, RPM is about transforming your people, your process and your technology. It means new organization structures. For example, instead of having a head of sales and a head of marketing, bring in a Chief Revenue Officer to manage both. Think about changing how you compensate people. How do you measure marketing? Salespeople? And, finally, what technology tools do you support? Maybe you have a CRM system, but have you though about what else you need on top of that system to supply the end-to-end process?
To learn more, watch the video below.