Begin Your Revenue Marketing Journey
What has changed so much about B2B marketing in the last few years that we’re now using a term like revenue marketing? In a nutshell: accountability. Ask yourself these two questions: Do you currently have any kind of revenue accountability? And if you don’t have revenue accountability today, will you be held accountable in the next 12 months?
- B2B marketers are in a period of extreme transformation. Roughly 85 percent of B2B marketers are feeling intense pressure to add direct revenue accountability to their job description. The imperative for marketing to directly connect to revenue is coming at the marketer from every part of the organization:
- Today’s CEO is asking, “How can marketing today help us achieve growth and competitive advantage?”
- Today’s CFO is asking, “What revenue impact is marketing making and what’s the ROI?”
- Today’s COO is asking, “How can marketing help increase operational efficiency and effectiveness in the marketing and sales process?”
- Today’s VP of sales is asking, “How can marketing help us find substantially more sales-ready leads and get them through the sales funnel more quickly?”
This demand to show credible financial results lands squarely on the plate of today’s CMO, who is now charged with leading transformation and change in order to meet the requirements of the organization. In this pressure-cooker environment, the CMO can view the situation as either the sky is falling (disaster) or there is a silver lining to this cloud (opportunity).
Let’s take the silver-lining approach because, for most B2B marketers, this environment of transformation represents one of the best periods for career and contribution potential in the history of the field. What Is Revenue Marketing? Revenue marketing is the combination of strategies, processes, people, technologies, customer focus and results that does the following:
- Drops sales-ready leads into the top of the funnel
- Accelerates sales opportunities through the sales pipeline
- Measures marketing based on the repeatable, predictable and scalable contribution to pipeline and revenue
- Improves the ROI of the sales and marketing continuum
The Revenue Marketing Journey™ (RMJ) is a simple model that The Pedowitz Group created to help marketers understand this new landscape, to identify where they are today and where they need to be. The model presents four distinct stages to achieving revenue-marketing status: traditional marketing, lead generation, demand generation and revenue marketing, the final stage. Marketers in the revenue marketing stage directly connect to revenue in a repeatable, predictable and scalable manner. They have become an economic engine for the organization.
Since its introduction in early 2011, the RMJ has been tested with thousands of marketers and has proven to be an easy way to set a course for any marketing organization to more concretely connect with revenue. Let’s review each stage of the journey.
Traditional Marketing: The “Make It Pretty” Department Characterized by the Four P’s—product, promotion, placement and price—traditional marketing is what is still being taught in school and what most marketers experience every day. For many B2B marketing organizations at this stage, marketing has little political clout, doesn’t have a seat at the revenue table and is seen as the “make it pretty” department. Senior executives in this organization don’t realize the revenue impact that marketing could make on the company.
Traditional marketers are focused on creating and implementing marketing strategies and tactics without good insight into the impact of those initiatives. They typically report on a host of activity-based metrics, such as number of ads and impressions. For many companies, this is largely a blind spend, represents a huge budget and provides metrics that key executives don’t care about.
What we’re talking about is moving beyond these traditional marketing activities to include a more relevant and effective way of marketing, one that eventually earns marketing a seat at the revenue table. The next three phases include defining characteristics and specific metrics because understanding what you are measuring gives you better insight into what your business is really all about.
Lead Generation: Bad Leads to Sales, Quicker
The first big step toward revenue marketing is making the transition from traditional marketing to lead-generation marketing. At this stage, it is marketing’s responsibility to provide as many leads as possible to sales. Many organizations have had a lead-generation strategy for years, but the leads they turn over are not fully developed, meaning they are not sales-ready. The reason leads are passed to sales before they are ready is that sales has to make calls—it’s their job. They can either cold-call or call someone who has filled out a form or downloaded a white paper.
These leads typically come from trade shows, website visits or general forms and are passed to sales for follow-up. If the lead closes, that’s great. But if the lead does not close, it typically gets lost or marketing may buy that lead again and start the process all over again.
Most companies at this stage have an email system in place, but their lead-generation practice is often one-dimensional and there are many manual processes on the backend to get bad leads to sales more quickly. Metrics tracked at the lead-generation stage generally include number of emails sent, open rate, click-through rate, number of forms submitted, percentage of forms completed and number of leads sent to sales. Once a lead is passed to sales, marketing’s job is finished.
A marketing group at this stage is moving in the right direction but is still viewed as a cost center to the organization.
Demand Generation: Quality vs. Quantity
The move from lead generation to demand generation is a gigantic leap for most organizations. Demand generation is defined as the combined set of activities across both sales and marketing that puts high-quality leads (sales-ready) into the top of the sales funnel and accelerates opportunities through the pipeline.
Marketers at this stage are focused less on quantity and more on handing over quality leads to sales. The synergy and co-dependence between sales and marketing is beginning to develop. Companies moving into demand generation have typically invested in a marketing automation system that is integrated with their CRM. The metrics tracked are also significantly different from prior stages in that they change from being activity-based metrics to revenue-performance metrics. This is a big change for many marketing organizations.
Key metrics in the demand-generation stage include:
- The number of marketing qualified leads (MQLs)sent to sales
- The percentage of MQLs sent to sales that actually convert to opportunities
- The percentage of those opportunities that convert to close
- Marketing’s contribution to the overall pipeline
- The average number of days to close
The demand-generation stage is characterized by developing processes that will eventually lead to an ongoing and predictable revenue contribution from marketing. Marketing is now reporting on what it has accomplished in a meaningful way to the business, so senior executives begin to realize the ultimate contribution marketing can make.
Revenue Marketing: Who Moved My Cheese?
The revenue-marketing stage includes everything in the demand-generation stage with one major difference: The revenue generated and attributed to marketing is now repeatable, predictable and scalable. Revenue marketers use marketing automation technology integrated with CRM to determine how many MQLs are sent to sales and are able to forecast their overall conversion rate. Just like a VP of sales, revenue marketers can walk into a CEO’s office with a forecast that aligns tightly with sales all the way through the lead funnel.
At this stage, not only can you report on what you did last quarter as far as your contribution to pipeline and sales, but you can also predict future contribution. Marketers at this stage are seen as a revenue investment and marketing as a revenue center. The role of marketing in the organization has fully transformed from being a cost center to a revenue center.
The Word From Sales
At the same time that marketing is transforming, sales is engaging in a similar transformation. Today’s buyer is typically 70 percent through their buying process before a salesperson is even aware of a prospect’s interest. Prospects go online and mine much of the information they need, and in this process, sales is disintermediated—left out in the cold.
Sales is struggling to win in this new digital world and is turning to marketing for help. On average, a high-performing marketing group provides 30 percent of the pipeline opportunities. In low-performing companies, this number is much lower. The result is that many sales organizations are still cold-calling and are largely responsible for their own lead flow. Ideally, marketing should be responsible for filling the top of the funnel, leaving the sales team to work qualified opportunities that are more likely to result in closed business.
For the last five years, CSO Insights has reported on the state of the sales and marketing relationship. What they see in best-performing sales and marketing organizations is a real appetite from sales to more closely align with marketing to enhance the lead flow and opportunity pipeline.
Clearly, there is a need. Sales leaders have named the alignment of sales and marketing their No. 1 initiative and CxOs are turning to marketers for help with revenue. Now it is up to marketers to respond. The technology is available and the need is apparent—the time for the revenue marketer is here and now.
So, the question is, “What are you going to do about revenue?” If you haven’t yet been asked this question, you will be soon. And if you haven’t begun your Revenue Marketing Journey or you are stalled at an earlier stage, 2017 is the year to get it figured out. The role of marketing has forever changed. You can see this as gloom and doom or a wonderful, splendid opportunity. Revenue marketers proactively seek, explore and take advantage of the opportunity. What kind of marketer are you?
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