Revenue Marketing: 6 Essential Rules for Success

30 Oct

Over the last decade, I’ve helped to build B2B revenue marketing teams spanning from a few marketers supporting a few sales people to global models supporting 10,000+ sales representatives. While the challenges of different organizations are often unique, I think there are a few key revenue marketing rules that transcend B2B organization size.

In my last post, I walked through an overview of B2B Revenue Marketing. Now, here are my five key tenets to making sure that your revenue marketing programs are as good as they can be:

(1) Focus on revenue: While this seems incredibly obvious, most B2B marketing organizations focus on other things. While leads and pipeline often lead to revenue, focusing on leads and pipeline metrics can create conflict between marketing and sales. The most important metrics for revenue marketers are (a) the amount of marketing-sourced revenue driven by marketing programs and (b) the effectiveness of the marketing investment (ROI). While pipeline goals are important to see how thing are progressing — they are not a substitute for revenue goals. In my experience, lead goals such as the quantity of leads or the number of qualified leads tend to be completely counterproductive.

(2) Sign-up for accountability: Revenue marketers should be paid like sales people. They should have a  quota based on the level of investment that they control and a significant portion of their pay should be variable based on performance (i.e. revenue). Great revenue marketers should be highly compensated. the key to this, however, is true marketing accountability for revenue and results.

(3) Make marketing & sales as a single integrated function: Every dollar spent on revenue marketing is a dollar that could have been spent on sales. For revenue marketing to make sense, it needs to provide leverage to the sales team and allow the sales organization to scale cost-effectively. If you are a young company and want to grow sales at 100% or more per year, you’ll need to get the right balance of sales and marketing investment to support hyper-growth. No matter what your goals are, it’s important to look at marketing and sales as a single continuous function (hopefully with different owners), with joint planning, shared goals, and a clear model for resource allocation.

(4) Design a process that eliminates conflict: Too often, marketing organizations sabotage themselves by putting in place lead generation processes that create conflict with sales. A bad lead process creates a rapid death spiral that looks like this: (a) marketing sends tons of leads, (b) sales says the leads are weak, (c) sales stops calling the leads, (d) marketing says sales is weak, (e) marketing stops getting any ROI from its investments, (f) people get fired.

From my experience, the number one source of friction tends to be the definition of a qualified lead. If sales and marketing are arguing over whether a lead is really qualified — or whether lead quality is high enough — you likely need to fix your definitions and processes. You can find my thoughts on lead qualification best practices here.

(5) Scale marketing investment with results: As most B2B companies grow, they scale the number of sales people and quota to hit their sales objectives. Smart organizations do the same with marketing program and headcount spend: they build models that automatically ser required resource levels based on the company’s sales staffing and revenue goals.

(6) Optimize for customer experience, not sales cost: When designing marketing and sales processes, it’s very easy to be inwardly focused. Most organizations, for example, tier sales teams based on compensation cost. I’ve seen organizations take this to an extreme, having each lead go through tele-qualification before being passed to inside sales before being sent an outside sales representative. While this may be great for the outside rep, it’s is bad process for the customer. In my experience, the best lead generation processes get good prospecta in front of the people who are most-qualified to help them as quickly as possible while avoiding unnecessary hand-offs. Here are my detailed thoughts on common sales structure problems and, in particular, the problem with using “demand generation representatives.”

The Impact of Revenue Marketing

As I wrote in my last post, revenue marketing is having an enormous impact on B2B sales. In the most sophisticated organizations, sales people don’t make cold calls. Instead, inbound leads are automatically nurtured until they are right for sales. In these companies, marketing programs people are paid like sales: they have pipeline and revenue goals and substantial at-risk compensation built around these goals. The quarterly planning process begins with the revenue goal and backs into required marketing program investments and sales staffing.

For B2B CMO’s, revenue marketing is a path to a mammoth impact on the P&L. When revenue marketers work closely with sales, create smart processes, and optimize for the customer experience, great things can happen.

One Response to “Revenue Marketing: 6 Essential Rules for Success”

  1. Dennis Chepurnov December 28, 2012 at 5:10 pm #

    Excellent post! I think repeatability is key, and the right technology can make all the difference here. The B2B buying process is both simpler and more complex than before, and this requires a multi-dimensional lead maturity model. I am in the process of deploying a marketing automation solution with the goal of standardizing our lead nurturing and scoring practices, hopefully resulting in predictable marketing revenue.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: