Regardless of the size of your company, your marketing, sales and customer success functions need to be held accountable for bringing results. And the thing about results is–what gets measured, gets delivered.
So, if you want to transition to revenue marketing, you need to start measuring your team on the factors that contribute to revenue. How? Here’s a handy guide on how to go about it.
The challenge: shifting away from siloed vanity metrics and reactive marketing
The issue with most marketers is that traditionally they are used to delivering on marketing qualified leads (MQLs) because that’s what they are measured on. And it typically comes from the mindset of showcasing a vanity number to prove your marketing is working.
For example, it could be a considerable volume of people who downloaded your eBook or a checklist from your landing page. But these leads aren’t people who might be your potential buyers.
Or you may have spent a few hundred dollars in running ads leading to the landing page, and generated a few thousand leads. This makes for a reasonable cost per click (CPC) story. But if it doesn’t contribute to revenue, it doesn’t cut to be called a revenue story.
From enabling sales to contributing revenue
For your organization to move into revenue marketing, the first step is to measure revenue contribution instead of MQLs. But before you get there, it is worth exploring if you fall into one of these categories:
a) Enabling sales: If you belong to this category, you probably have a marketing team that works to serve the sales team’s needs reactively. They get a request from sales, and it gets processed and delivered. Such marketing teams’ primary role is to build awareness, generate leads, run ads, etc. And it’s very much possible that you are a tad heavily focused on top-of-the-funnel compared to mid-funnel or bottom-funnel.
Yardstick: They are mostly measured on the number of leads and the number of marketing experiments conducted.
b) Enabling potential revenue: If you belong to this category, your marketing team is relatively proactive and aligned with sales and business goals. They go beyond MQLs and know the potential revenue from the pipeline generated. But they don’t carry specific revenue goals. These companies tend to have a decent martech adoption. Still, they aren’t able to identify each marketing channel’s contribution to the revenue generated across different customer journeys.
Yardstick: These companies are measured on potential pipeline generated and efficiency on cost-per-lead.
The above two approaches aren’t necessarily wrong, but great marketing starts when you know where you are headed and how to measure it.
The first approach, for instance, is very reactive. They act as support to the sales team, but the impact level is minimal. Whereas, the second approach is relatively better because the marketing team is measured on pipeline contribution, and hence the marketing channels and efforts are more focused.
But, the ‘potential revenue’ factor is a very subjective thing. It goes down the same debate route as MQLs.
How do you become a proactive revenue marketing team?
1. Set yourself up for success by using revenue impact as a basis for building marketing campaigns.
It would be best to move away from ‘potential’ revenue contribution to ‘actual’ revenue contribution. It’s going to be a marathon, a continuous work in progress. One of the fundamentals is to bet on a winning horse.
Do note – I didn’t say a horse that can potentially win.
In this case, for instance, let’s say you want to bet on a marketing channel that will yield you the best results.
How do you identify that? You connect the dots, looking backward, i.e., analyzing what has happened so far. Identify what channels are working for you and which ones aren’t.
Next, when we talk of a channel working well for you, we speak about conversion and revenue contribution. So, in simple terms, revenue contribution refers to the number of deals created and closed from a specific channel.
Going by the screenshot above, if I were to pick my top two channels – it would be Google Adwords and organic search traffic. So, run a few experiments on the best channels working for you and zero-in on the programs that give the best results. Continue with those channels until you hit a point of diminishing returns. Then move to the next best channel.
2. Having specific revenue goals for your sales, customer support, and customer success works to align everyone on organizational revenue goals.
When you are a relatively small team, most things are under control. Communication happens naturally and informally because everyone understands the goal in the short term, medium-term and long term. But as teams get into the growth phase, it’s chaotic because functions get siloed.
A study contributing to the Heinz Annual marketing report suggests that 53% of marketers can’t measure or are unsure of their ROI.
So, you can set up specific revenue goals for each of your functional specialists to contribute to the organizational revenue goal. And then, alignment begins to happen naturally. The reason alignment happens as a natural consequence is that every team begins to feed off each other.
For instance, let’s take content marketing. Your content creator begins to realize that their job is beyond producing great content. They begin to tie their content marketing efforts to specific outcomes like attracting the right audience instead of traffic.
And when the sales team pursues a conversation with a prospect that shows interest in your product, they can tap into the content team’s results.
If you use a CRM that is integrated with your marketing tool, you can track such successes with ease. As per the example image above, your sales team can then check out the content consumed by the prospect and build a highly contextual conversation.
Similarly, your customer success can feed off sales and customer support and so on.
3. Streamline your budgets: audit and fill, audit and remove
It all starts with asking the right questions at regular intervals. Budget is always going to be a catch 22 problem – you need a budget to deliver ROI, and you need to show proven ROI to get a pie of the budget.
Typically marketing budgets tend to be around 1-10% of annual revenue. So, it’s critical not to waste money or throw money in the trash. As much it sounds obvious, it happens all the time.
- Have I subscribed to tools that I don’t use anymore? How long has it been since I did an audit?
- Do we have people with all the necessary skills? What is the gap that needs to be filled?
- I might not want to measure everything, but do I have the infrastructure to measure the mission-critical factors?
Remove the things you might not need, and reallocate the budget to what is critical.
And finally, it’s all about balancing the 3Rs: Reputation, Relationship and Revenue
While all that is discussed above is super important – it’s not only about revenue alone. It’s about maintaining a balance about things that might not immediately impact your revenue but might give you tremendous returns in the long run.
Let’s take branding as an example. It might appear like an investment that has nothing to do with revenue at the outset, but that’s not the case. Your investment in building the brand can be measurable in terms of revenue.
For example, let’s say people start searching for your branded keywords over time. The best example is what ‘inbound marketing’ is for Hubspot; what ‘conversational marketing’ is for Drift. Branded keywords tend to have low competition, and thereby it brings down your CPC and customer acquisition cost (CAC).
So, balance the 3Rs – reputation, relationship, and revenue.
Reputation: Ask yourself — how are you leveraging your brand and thought leadership in building awareness and driving engagement? Can you add value to your target audience with deal-specific content that includes playbooks, battle cards, videos, and other engaging assets to improve trust?
Relationship: How you drive reach and engagement with your target audience, how you build 1:1 relationships with stakeholders within your organization, customers, industry thought leaders and analysts. Can you establish a Customer Advisory Board (CAB) to help your brand create a differentiation to compete with other similar products in the market or help you win large deals?
Revenue Enablement: Is your reputation translating into revenue over time? Are you contributing to the existing pipeline, or are you adding net new revenue? Are you contributing to increasing the pipeline velocity? Are you contributing to improving the customer lifetime with your brand?
To sum up, the path to revenue won’t be boring. It will be a journey of failure, discovery, need for grit, and perseverance in tracking things that matter until you see the revenue numbers achieved against your name and recognized for it.
Play long term games with long term people to achieve long-lasting results.
- How to Transition to Revenue Marketing – Step by Step - January 14, 2021