Attribute it to what you will, the paradigm has shifted for marketers as we shed Demand Era standards to fit our role to the era of Revenue; more specifically, marketing revenue accountability. The very notion of marketing owning a revenue number is one surely destined to be another ubiquitous statement often mouthed yet rarely achieved across the zeitgeist; but it’s up to forward-thinking revenue marketing leaders to go beyond evangelism and move their teams toward the business-end of this Pareto Principle.
More than a Mindset
Without undermining the importance of culture and mindset as success drivers within teams, we’re not going to mantra our way to marketing revenue accountability. Real structural changes need to be made in order to not just align but reposition, reeducate and even rebuild our teams to yield an organizational stance primed to function optimally.
Go Beyond Sales & Marketing Alignment
And functioning optimally for many will entail leaving behind the very notion of Sales and Marketing as siloed activity-centers that need to be aligned. As much as this notion of Sales and Marketing Alignment has been pushed, accept it as demand era thinking that at best creates a scenario yielding little more than efficient, contextualized MQL hand-offs, and Marketing still left haggling for revenue attribution.
Data, technology and buyer demand for personalized digital and self-serve experiences drive home this point: Marketing needs to function further down-funnel with Sales moving further up-funnel on the path from Attention > Interest > MQL > SQO > Closed Won.
The real-world example being marketing doing the heavy lift to push a known ICP prospect to a pricing or other high-intent page and hoping for the best, with no real-time sales notification/engagement, no longer cutting it.
Need stats? Here’s a study from Salesforce telling us 71% of consumers expect companies to interact with them in real time, with 64% expecting tailored experiences based on past interactions.
The two must act concurrently across the buyer journey, functioning instead as a unified Digital Revenue Team bolstered by In-House Agency frameworks and augmented with On-Demand Talent to fill capability gaps created by the gulf between exponential changes in technology and logarithmic skill expansion within even the most high-performing in-house teams.
Go All-In on Digital Revenue Teams
Digital transformation, along with other factors, has led the marketing function to it’s Moneyball moment. One leaving any would-be revenue leader who isn’t tearing down demand era Sales and Marketing silos and building a unified Digital Revenue Team fated to go the way of the dinosaur.
Even at the very top there needs to be a reimagining of functional performance and skill-sets, with those coming out of the Marketing function well positioned to make the CMO to CRO transition and lead the Revenue Team.
Rethink Your Key Metrics
Imagine a budget discussion without using the word budget. Without using the word ‘quarter’ or ‘year’ or better still, not pretending that ROI actually means something.
Modern revenue teams talk about RevEx.
In short, RevEx is expenditure directly attributed to Revenue. It’s not Capex to pay for a large Martech or Saletech project that may or may not provide a return when you said it would.
It’s not Opex to pay a team to produce a load of content that may or may not be useful to your customers. Or a punt with Google to drive something that resembles interest or engagement.
RevEx is expenditure directly related to Revenue.
Unambiguous, completely transparent and in most situations scalable. It’s not really an ‘ask’ to finance either. Yes, there’s a lag between spend and revenue, but if you’re doing it well you can identify, measure and reduce that lag too.
Move Toward Marketing Revenue Accountability
To own a number, you must first set a number. Start with where you want to end up as a revenue target. If you don’t have historical data to backstop your forecast, we give you full permission to make and educated guess.
Afterall, unless you’re one of those businesses with a 24 – 36-month sales cycle, the idea of setting annual targets is another thing that should be left to the dust. Set a quarterly target and amend as needed if you vastly under or overshoot.
Once you have an agreed-upon number, use Average Customer Value (ACV) to work backwards to ascertain business specific KPI numbers for everything leading up, such as Sales Qualified Opportunities (SQOs), Marketing or Product Qualified Leads (MQLs/PQLs), traffic and the derived marketing mix to drive it, from which it will be met.
Refocus from ABM to URM
Rightly or wrongly Account Based Marketing (ABM) has been the focus of B2B marketing and marketers for a number of years. The debate about whether ‘it’s just good marketing’ will inevitably continue for a few more; however, the reality is it belongs to an era where ‘the buyer’ or ‘the group of buyers’ were the primary focus of marketing and sales.
Well here’s some news… Buyers are no longer the most important part of the revenue process.
Controversial? Well maybe not…
The business world is driving towards Annual Recurring Revenue (ARR) models. Ask any CFO how they want to do business and they’ll say ‘let’s charge every user for every month…forever’. And there in just a few words is the crux of the issue.
It’s no longer about who buys the service, but instead who uses the service. And for how long they keep coming back. And how many of their colleagues use it.
And that’s the new math for business performance: Revenue = Users x Time.
So the emphasis and investment needs to shift. Less focus on the conversion to ‘buyer’ and more focus around expanding the use of a product, from both a time and number of users’ perspective. And that’s the job of the Digital Revenue Team. And what do we call that?
User Revenue Management (URM).
How Not to Define Marketing Revenue Accountability
This should probably go without saying, but applying revenue accountability to the marketing function does not mean you should be trying to draw a direct line to closed won from every blog post, every GIF, every webinar episode, and so forth.
That said, build your brand, content, social, digital event and other strategies with the business goal in mind and measure impact on, not just high-level vanity engagement metrics but, revenue-oriented KPIs.
Is your pipeline full of ICP prospects? Is ACV going up? Is the sales cycle shortening? Are prospects mentioning your LinkedIn, webinar or other content in discovery calls? Even, are recruiting costs dropping because more qualified applicants are beating down the door to come to work for your brand?
Don’t Risk Being a Late Adopter!
Companies that achieve on this roadmap, and in doing so gain the ability to create personalized buyer experiences, see as much as a 50% reduction in their customer acquisition costs, not to mention drawing a straighter line between closed won and marketing revenue attribution.
Many of your peers will disagree.
Let them bet on the status quo persisting.
Excuses for missed revenue numbers haven’t passed muster in Sales for a long time. Only a matter of time before the same’s true in Marketing.
Ledger Bennett are ushering in the new era of progressive marketing revenue accountability through the right-sized deployment of optimal people, technology and digital agency solutions to ensure our client partners continuously win in the revenue era. Push to Start.