Revenue Performance Management – What’s the Buzz About?

Corporate management loves buzzwords and marketers love to implement them. Technology usage in marketing continues to increase (see Gartner’s survey results in 2013 Marketing Budgets High-Tech Providers) and will undoubtedly do so for the next several years. Revenue Performance Management (RPM) is a concept that formalizes the link between these technology investments and their contribution to a company’s growth. It was invented and promoted by marketing automation vendors, then embraced enthusiastically by demand generation professionals frustrated by the lack of recognition for their role in revenue enhancement. RPM is today part of the standard vocabulary and is understood by the “strategic management” folks when discussing revenue contribution.

Let’s face it: The marketing function changed radically during the last decade, especially with regard to the use of technology to generate demand. The semantics of the conversation about relative contribution to enterprise success needed a dramatic overhaul. RPM is one result.

Detailed definitions of RPM differ, depending on the need.

One definition focuses on the value of alignment between marketing and sales. Marketing automation is the mechanism that binds the two organizations and yields increased revenues by:

  • requiring a definition of an end-to-end lead qualification process without regard for organization boundaries;
  • ensuring that only highly qualified leads are passed from marketing to sales; and
  • keeping sales focused on opportunities that are most likely to close.

Another RPM definition focuses on optimizing investments in marketing campaigns to make sales teams more productive and improve the accuracy of sales forecasts. The cornerstone of this approach is the understanding that 50-70% of the purchasing journey has been completed before a sales rep engages a prospect. In other words, marketing builds trust and presents relevant offers before passing leads to sales. Optimizing the first phase of the purchasing journey yields a better result in the latter phase of that journey.

A third definition is customer-centric and looks primarily at the end-to-end purchase lifecycle. The goal is to optimize and track all marketing and sales contacts with the prospect. This perspective recognizes that buyers – not vendors – control the flow of information pertaining to their purchase. Prospects use the Internet to research vendors and products with search engines and social networks. Marketing always manages these channels. As such, marketing’s contribution to revenue generation must be highlighted and acknowledged.

Looking at RPM in broader terms, we understand that accelerating a lead to closure requires more than an efficient marketing process. Specific expertise is required to:

  • assess a prospect’s readiness to buy via website intelligence;
  • determine the correct type of nurturing to use with a prospect; and
  • create appropriate content and collateral that enhance a prospect relationship.

In addition, marketing must partner with sales to ensure they have up-to-date product and service information. Ideally, marketing will collaborate with sales to create a great proposal and present a compelling quotation.

Our working definition of Revenue Performance Management is a combination of strategy, technologies and processes to enhance revenue generation:

  • Sales and marketing alignment for nurturing leads and closing deals.
  • Real-time access to skills, processes and training.
  • Deal-specific playbooks and portals to improve win rates.
  • Revenue-rich quotations and proposals to maximize deal sizes.

With this holistic approach we hope to raise RPM from a revenue-focused concept to an all-encompassing discipline.

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