Traditional marketing is seen as a necessary expense. It doesn’t need to be that way. The goal is to view marketing as a direct driver of revenue, said Bruce Culbert, Chief Services Officer for The Pedowitz Group, in his presentation, “Revenue Marketing Transformation and Marketing Automation for B2B Marketers,” at the CRM Evolution 2012 conference in New York City.
In his presentation, Culbert showed how companies can move their marketing department from just being seen as a cost center to a driver of revenue.
What is Revenue Marketing?
Culbert defines “Revenue Marketing” as marketing and sales working together to deliver more qualified leads to the funnel while increasing the speed and conversion rate they move through the funnel. If you’re doing it right it should be repeatable, predictable, and scalable.
Traditionally, the funnel starts with marketing. They in turn hand it off to sales who then hand it to service who maintain the customer relationship over time. In the new “revenue marketing” paradigm, marketing sticks around for the entire lifecycle of the customer.
“Marketing is one of the last functions in business to be reengineered, optimized, and held accountable for their contributions to revenue and profitability, and that must change,” said Culbert.
With non-revenue marketing organizations there is no visibility or accountability between sales and marketing, and they have competing intentions. According to Forrester Research, 47 percent of B2B marketers say they either close fewer than 4% of all marketing generated leads or they don’t even know the metric. As for how sales rates marketing, 2/3rds of salesmen say marketing needs improvement (source: CSO Insights).
Characteristics of Revenue Marketing
Culbert outlined the four stages a marketing department must go through before it can achieve revenue marketing nirvana.
Stage 1: Traditional – Characterized by ad spending, brand and awareness, marketing communications, broadcast, no service level agreement (SLA) with sales, no revenue measurement. A traditional marketing department is always viewed as a cost center because their metrics are defined by what the company does (activities such as number of impressions, ads, and tradeshow appearances).
Stage 2: Lead Generation – They begin to quantify leads that sales can take action on. Their characteristics include more viable leads to sales, an email system and or CRM, a highly manual lead nurturing campaign, and some campaign level lead/revenue goals. Marketing is still viewed as a cost center at this point although they begin to move towards customer measurement with metrics such as number of leads and number of emails sent.
Stage 3: Demand Generation – Biggest transformation happens at this stage. Characterized by marketing automation with CRM, buy cycle vs. sales cycle, SLA integrated with sales (two groups are actually talking about what a good lead looks like), lead scoring (Which ones do you take action on first?), content marketing, and social marketing. While not yet predictable there is some revenue accountability. Metrics now include number of leads scored and sent to sales, percentage of conversion to opportunity, percentage of conversion to close, pipeline contribution (Do they accept that lead and does it continue through the pipeline?), number of days to close, and some ROI.
Stage 4: Revenue Marketing – At this stage you get all the elements of demand generation plus it includes forecasting that’s repeatable, predictable, and scalable (RPS). Metrics are also the same as demand generation, but you now have sales, revenue, and ROI. Marketing can now finally say they drove sales and revenue.
To define your journey, said Culbert, look at each level and see how mature your company is against strategy, people, process, technology, content, and results.
Marketing automation is becoming the system of measure for marketing, said Culbert. It takes a technology stack to create revenue marketing. If you use marketing automation you can increase leads, your sales department will respect the leads more, and as a result you’ll increase revenue. Marketers can get to these levels of achievements.
Marketing automation must haves
According to Culbert, to achieve revenue marketing, you must have:
Email design and send
Web asset development landing pages, forms, and microsites
Web activity tracking
Personalization and dynamic content
Content marketing and syndication
Workflow and lead routing
Ability to publish track and leverage social channels
Integration with CRM or other customer systems
Metrics and reporting
Sales enablement and insight
High value use cases for marketing automation
While marketing automation can be used in a number of different areas, Culbert suggests starting with:
Multi-step nurturing campaigns
Webinar registration attendance and follow up
Up sell and cross sell
Adoption and support
Content marketing – Thought leadership, blogs, high value web content
Share to social – all emails and web content/experiences
Lead scoring MQL, SQL, SAL
Lead routing and sales SLA’s
If you want to see if you’re ready to make the transformation to revenue marketing, take your own assessment from the Pedowitz Group and see how you stack up against hundreds of other companies.