Ever dreamed of being congratulated by the C-suite for having a results focused, revenue-driven marketing strategy? If so, you’re not alone.
Marketing’s always had something of a credibility problem when it comes to proving business value.
Among the various departments in an organization, marketing has been the haziest in terms transparency. It’s considered a “soft science” that’s difficult to quantify.
Take social media, for example: According to the CMO Survey, only one in five marketing executives can prove the business impact of social media quantitatively.
However, those haven’t always been easy to relate to revenue. As a result, marketing is viewed as a cost center, not a profit center.
Part of the challenge is that your marketing team—and the organization at large—have to set up an environment that makes revenue-driven marketing possible.
“Hold on a second,” you say, “Back up. What exactly do you mean by ‘revenue-driven marketing’?”
What is revenue-driven marketing?
At its core, revenue–driven marketing is simply marketing done from a different perspective. The ultimate goal is to create repeatable and measurable campaigns that drive new customers and increase sales.
Wait; don’t all organizations want that?
Yes, but revenue marketing’s key differentiator is its emphasis on measuring return on investment.
It prioritizes strategies, tactics, and tools that bring tangible results to the organization. It measures everything it can, and tries to find a way to attribute those metrics to sales at the end of the cycle.
It also requires close alignment between marketing and other departments—especially sales.
Why is being revenue-driven so important?
Let me ask you a question: would a product-based business be successful if you didn’t know the cost of your raw materials? If you didn’t track shipping costs? Or how much profit you’d get from each unit sold?
You’d be flailing around at random, operating at a loss without even realizing it.
Marketing is the same way.
The way most companies operate, there is no visibility into how much a campaign contributes to the bottom line. It’s difficult to know which channels to invest in and which channels to ignore. It’s useless for determining long term ROI and for forecasting marketing spend when it comes time to evaluate budget requirements.
Revenue-driven marketing is the complete reverse. Through the use of revenue analytics, you’ll be able to:
- Know what percentage of revenue should be spent on marketing.
- Invest in the most effective marketing strategies.
- Identify and eliminate wasteful marketing campaigns.
Revenue-driven marketing can be the difference between a company that charges forward in the marketplace and one that merely spins its wheels.
How can I (realistically) introduce it into my organization?
I’m not going to lie: turning your marketing team into a revenue-driven operation is not going to be easy.
But I’m here with a few pointers and guides on what changes to be made and how best to apply them in a practical, realistic manner.
1. Match your marketing plan to revenue goals.
Look at the revenue targets for the year and commit yourself to a certain percentage. For example, your marketing could commit to contributing to 30 percent of the annual review goal.
This is a frightening concept for marketers who’ve never had to be accountable for sales numbers, but it’s a critical step in developing trust between marketing and sales.
It also has the added benefit of putting all your current projects in a new light. Now you’re looking at your marketing plan through the lens of, “how will this project help me reach our targets?”
2. Align with the sales team.
There’s been a historical distrust, and even rivalry, between marketing and sales. Both departments can have a hard time understanding and appreciating what the other is doing.
That has to end.
To become more focused on ROI, marketing needs to start speaking sales’ language and understanding their workflow.
You need to ask sales:
- What constitutes a qualified lead?
- What kind of questions are customers asking?
- What can marketing do to help you connect with customers?
This is called sales enablement, and is a critical aspect of revenue-driven marketing. In it, marketing helps sales do its job better by supporting it through targeted content, matching lead scoring standards, and establishing SLAs for getting marketing assistance.
By working closely together, marketing becomes more effective at helping to close business and drive revenue. The ROI becomes more apparent and your worth to the rest of the organization increases.
3. Put the right metrics in place.
There’s a reason revenue-driven marketing is also known as “data-driven marketing.” Marketing attribution is a key component to its success, and will serve as the basis for all of your strategic and tactical decisions.
But not all metrics are created equal. Some are “vanity metrics,” there to serve as filler for a PowerPoint slide. Others deliver misleading information.
Last-touch attribution is one of these misleading metrics. By only focusing on the last stage in the buying process, it completely ignores the rest of the cycle where the actual decision to purchase would’ve been made.
Multi-touch attribution offers much greater insight and gives marketers much more to work with. With it, you’ll be able to track which steps the buyer took to get to their final decision, and duplicate that process with other prospects.
The challenge now becomes how to track all that information.
Traditionally, marketers have sought to track consumers through the marketing-sales funnel, which looks like this:
However, many believe that the old sales funnel is dead.
Digital customers have so many ways to research your product and contact you that it becomes impossible to stick to any one channel.
The problem is, metric tools have a devil of a time keeping up with the options. It’s common for a marketer to use multiple tools to track conversions across multiple channels, but not common for those tools to directly attribute conversions to sales.
But there are tools that do, and there are more coming out every year. TrackMaven has its own tool and, to be quite honest, we’re very proud of it.
Here’s a screenshot of TrackMaven’s attribution tool:
But no matter what attribution tool you choose, it needs to have a few critical elements if it’s going to work with your revenue-driven strategy:
- Tracks metrics across multiple channels.
- Integrates with marketing automation tools.
- Intuitive and effective reporting features.
4. Triage your marketing campaigns.
Now that you’ve got a proper attribution model in place and have begun measuring performance, you’re in a better position to decide which marketing campaigns are worth keeping and which get the axe.
The campaigns that have the fewest touch points with recently converted customers, and the lowest influences in terms of number of touches, are the fist on the chopping block.
If your campaign isn’t producing the right results, then you need to optimize it or eliminate it.
Is this a new campaign, or is it one you’re trying to improve? Then take a closer look and identify ways to optimize its performance.
If the campaign failed terribly, or if you’ve already optimized it more than once, you may want to cut the fat. Remember to make sure you share why the campaign didn’t work with your team, so they don’t repeat the same tactics in the future.
Now you have the resources to focus on the campaigns that do drive more revenue.
This differs greatly per company and per industry. Blogs perform better for some than webinars; for others, it’s the reverse.
You should, of course, do more of what works. But don’t let past success lull you into a false sense of security. Innovation is key for staying ahead of your competitors.
Now that you have the means to measure your team’s performance, test a few new ideas and see how well they work. This could be a white paper on a new topic, or a changes to your website. Make minute changes and expand on them if the conversions start rolling in.
By focusing on revenue-driven marketing, you and your department will be able to make tangible contributions to the company’s bottom line and, even better, demonstrate your department’s effectiveness in indisputable terms. You are increasing both your organization’s value and marketing’s value, all in one go.
Want to get a head start on leading your marketing team to success? Download this free marketing executive’s toolkit!