What is Revenue Marketing – Connecting Marketing with Revenue
TABLE OF CONTENTS
The term “revenue marketing” is the hottest thing in the B2B town and it might sound like a buzzword. Understanding what lies beneath this umbrella term has tremendous benefits. It will help you to shape your thinking on meaningful outcomes and investing your marketing efforts where it actually matters. But, it is actually more than that with tremendous benefits. In this article, we will go over them.
From a general perspective, revenue marketing is what makes your marketing team tie their efforts with revenue. The goal of marketing is to generate revenue of course but often things get complicated and marketing fails to correlate their outcome with revenue. It involves a major shift in focus for the team and prioritization of a lot more targeted and goal-oriented marketing tasks. And it goes way beyond traditional lead generation and personalized marketing.
All teams combined focus on generating revenue with the highest possible returns – that is the essence of revenue marketing as a concept.
What is revenue marketing?
It is always when the objectives and goals are clear and when the plan of action is in place that breakthroughs happen and milestones are reached. Hence for any concept, the end goal has to be crystal clear. Especially in business, the objectives of each department have to be precisely defined right down to the decimal, in order to create measurable outcomes.
For the marketing department, since time immemorial, the goal has always been to generate demand and through demand, generate sales. However, in such a concept, the role of the marketing team pretty much ends at handing over the generated leads to the sales team, where they pursue the leads further. The marketing team stands oblivious to what the end-users, that is the leads, actually want. And the team remains a mere “cost center”.
In revenue marketing, a more comprehensive approach is followed where both the marketing team and the sales team work together to maximize ROI.
By definition, revenue marketing refers to the holistic process of identifying specific channels in marketing that offer revenue growth and optimizing resources to maximize ROI from all marketing activities. Marketing also needs to have a closed-loop system and fetch data from sales in a 2-way sync scenario (instead of the most commonly used marketing to sales data transfer). It is the combined effort of the sales and marketing team to drive revenue growth in a predictable way, by creating a constant and continuous loop of feedback. It seeks to develop strategies that can be effectively repeated to drive new customer acquisition and in turn predicted sales and revenue.
Some of the major goals of the concept of revenue marketing include
- Generating sales qualified leads and driving them straight into the sales funnel.
- Scaling successful strategies in a predictable manner.
- Aiding the smooth and solid journey of customers through the sales funnel.
- Connecting sales outcomes with marketing efforts and scaling profitable efforts
- Creating measurable outcomes for the marketing team in terms of revenue generated and pipeline activity.
- Transforming the marketing department from a cost center to a holistic revenue center.
Rise of revenue marketing
Revenue marketing as a concept rose primarily because of the emergence of advanced tools in CRM and the evolution of customer relationships in business as a whole. The latest CRM solutions provide a 360-degree view of customer relationships including analytics on the impact of marketing activities, making it easier for the marketing manager to monitor the outcome of every penny invested in marketing.
With a clear view of the impact of marketing campaigns on lead generation and the impact of further marketing activities leading to conversions, the journey reveals at what point these leads turn into revenue-generating customers.
Hence the focus shifted to the precise points of conversion and ROI – how to optimize marketing activities to drive the most ROI based on predictive analysis.
Importance of revenue marketing today
According to a study by Gartner a potential buyer in the B2B industry spends a good majority of the time researching brands and products independently, mostly online. Only 17% of the time is spent actually talking to a vendor.
Moreover, almost 63% of buyers prefer not involving any sales reps in their search. They prefer doing research on their own.
This means that a sales executive gets a very small window to make his case, convince the buyer of the quality of his products, and induce action from the buyer. This also means your low-touch conversion system needs to provide the data marketing needs to connect with revenue.
For the same reason, a lead pursued separately by the sales team has a statistically lower chance of converting into a sale. Of course, this depends on the type of customers and the industry. High-ticket customers would still prefer to talk to sales. A holistic approach allows both the marketing team and the sales team to pursue the lead through different methods and improve the prospects.
In fact, studies have proven that organizations with more accurately aligned sales and marketing strategies have been able to achieve almost 38% higher conversion rates as well as 36% higher customer retention rates.
Clearly, revenue marketing is the way to go in this day and age where people are more aware of their needs and businesses have access to better data.
What makes a winning revenue marketing strategy?
In order to make an impact in your customers’ minds and lead them towards making a purchase from you, there is a need to capture their attention and sustain it throughout the journey by communicating the values of your product at all times. And for this, you need to strategically reach out to them through both your sales and marketing channels, and consistently remind them of the benefits they’ll receive on buying your product. That is how a revenue marketing strategy works.
Here are the steps involved in creating a winning revenue marketing strategy.
Step one is to study and understand your target audience. This involves carefully analyzing what your buyer needs and figuring out the buying cycle for them. Your buyer’s needs could be anything from getting a task or a job done efficiently, to getting more knowledge or insights into a subject. You need to get down and dirty with the details and map out the buying cycle starting from creating awareness of their problem to inducing them to make a purchase decision. Understand the journey of the buyer very carefully throughout the cycle so that you know exactly where to strike to influence them at each stage of the cycle.
Step two involves the more difficult task of integrating your sales and marketing team and preparing to launch more aligned campaigns. For this, both your sales and marketing teams need to be aware of each other’s individual goals and objectives, KPIs, and other aspects along with the common goal of pursuing a lead together. A common strategy needs to be planned out after discussing the buyer’s behavior, buying cycle, and profile so that everyone knows what to do at each stage.
Steps should also be taken to ensure seamless and smooth communication across both departments so that no opportunity is missed. CRM tools and workflow management tools can be utilized to attain a reliable channel of communication with real-time updates on the progress of the campaign at each stage.
With Salespanel’s integrations, we have created a two-way sync functionality that syncs data from marketing to sales and sales to marketing in real-time. So for example, anytime a lead moves further in the deal stage, marketing data and their segments would reflect that information to trigger specific nurturing campaigns. Marketing can also use this data for their reports and analytics. The Marketing and Sales team can also share a common language of milestones on customer journeys. These milestones can be represented by automated tagging in real-time enabled by Salespanel’s website triggers.
Step three involves the execution of the aligned campaigns where every member of the sales and marketing team is up to date with the progress of the lead within the sales funnel. Efforts need to be taken to strategically reach out to the buyer through different means, based on the knowledge gained in step one and the actions planned in step two. With the right tool (Spoiler: Salespanel), this can be automated on any scale.
The last step is to promptly analyze the performance of your combined marketing campaigns and make improvements effectively. Track important metrics relating to your day to day activities as well as your overall revenue generation efforts. Taking combined metrics will help you take the right measures to improve the effectiveness of your entire revenue marketing strategy.
Connecting marketing with revenue
As mentioned before, marketing has always been associated with generating leads and handing over the leads to the sales team. This makes the marketing team a mere cost center with separate goals. It is only the sales team that is associated with converting the leads into revenue. The goals of both the teams remain on separate plates even though the end goal and the subject is the same. The goal of the marketing team used to be only limited to generating leads. In many cases, sales teams would complain that the leads generated by marketing were not good enough resulting in a blame game.
There is a need to shift the mindset of the marketing and sales teams to think from a comprehensive point of view. Marketing VPs need to be given the right metrics to link their activities to revenue and shift their focus from lead generation. A culture of collective responsibility and accountability needs to be established, rather than individual and team responsibilities.
When looking at metrics, instead of narrowing it down to team-specific activities, like “which high-quality leads were sourced by the marketing team” a more detailed approach can be taken to see which leads were sourced by which specific channels, keywords, campaigns, etc. Depending on the channels and combined campaigns that helped generate the most amounts of high-quality leads, the strategies can be applied repeatedly to achieve similar outcomes over and over again. This helps in scaling successful strategies and weed out underperforming strategies.
Revenue marketing team and the role of the CRO
The massive shift in focus of the marketing and sales teams from lead generation and conversion to increasing revenue collectively leads to the emergence of a new middle-level manager – the Chief Revenue Officer. The CRO naturally holds responsibility for all aspects of revenue generation including the combined performance of the sales and marketing staff in their revenue marketing strategies. It is not simply the extended version of a sales and marketing VP, but a more revenue-focused managerial position, who constantly analyses new revenue generation opportunities and provides strategies, along with the resources to bring home the revenue.
The CRO’s role will be heavily data-driven and he will be pulling the strings to make sense of the numbers. His team will consist of a data analyst, a VP, demand generation experts, a creative marketer, and a technical/product marketer. We will discuss the role of the CRO and his/her team in detail in a future article.
With time, such a complimentary office culture where revenue generation is seen as a collective responsibility will lead to the emergence of a revenue marketing team as a whole, with the CRO leading the activities and taking measures to optimize revenue marketing efforts.