Gleanster Rpm Report


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Industry (neutral)report on the revenue potential of using Revenue Performance Management.

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Gleanster Rpm Report

  1. 1. April 2011 Gleansight Deep Dive . Revenue Performance Management: The Sales and Marketing Playbook Finally Has a NameAbout the Pie Chart Whether a byproduct of the fast-paced world of technology innovation or simplyThe data presented in the pie chart a result of language that lends itself so wonderfully to abbreviations, the use ofis derived from the December 2010Gleansight benchmark report on Lead business acronyms has reached dizzying proportions. Last year, a new termNurturing. The data serves as the emerged from the lead management technology sector: Revenue Performancebasis for this Gleansight Deep Dive,which provides analyst commentary Management (RPM). In fact, some of the tier-one vendors are referring to theirrelated to a particular aspect of the solutions as RPM platforms.topic. The objective is to provideadditional perspective and illuminate Is RPM just a flashy new marketing gimmick for describing something oldcertain key considerations regardingthe implementation of the related or does it represent a fundamentally new approach to sales-and-marketingtechnology-enabled business initiative. alignment? Following weeks of Zen meditation (and no small amount of market research), Gleanster has come to conclude that while RPM may not be anTo learn more about Gleanster’s entirely new animal, the concept does sit on a higher rung on the evolutionaryresearch methodology, please click ladder and that widespread adoption would benefit most organizations. Thishere or email Deep Dive explores what, exactly, is meant by RPM, how the concept differs from what came before it and why it’s likely to have staying power. 87% Percentage of B2B marketers that say that their existing marketing techniques are failing to meet the performance targets set by the organization The business-to-business sales process has indicated that traditional marketing techniques changed dramatically in the last 10 years. (primarily referring to email, tele-prospecting, Companies don’t make purchase decisions; direct mail, and events) were not meeting rather, people make purchase decisions. performance targets set by the organiza- Rate & Review Gleanster research suggests that the average tion. Over 625 B2B sales and marketing company struggles with revenue growth respondents to surveys between November Related Research because they fail to engage their prospects 2010 and March 2011 cited revenue growth with highly relevant and timely interactions. as the number one priority for 2010 and Tell a Friend The one size fits all approach to demand 2011 (an overwhelming majority). CombineNote: This document is intended for individual generation simply doesn’t cut it anymore. these two statistics, and it becomes obvioususe. Electronic distribution via email or by post- that traditional B2B marketing and salesing on a personal website is in violation of the In fact, 87% of B2B marketers who participatedterms of use. techniques have become less and less in the Q4 2010 survey on Lead Nurturing effective at driving revenue growth.Entire content © 2011 Gleanster, LLC. All rights reserved. Unauthorized use or reproduction is prohibited.
  2. 2. Revenue Perfomance Mgmt: The Sales and Marketing Playbook Finally Has a Name 2 The solution to this problem lies in unfamil- profound disconnect in quantitative decision-Making Funnelnomics Scalable iar territory for most organizations because making abilities between marketing and salesFunnelnomics is a term frequently used sales and marketing have traditionally been even among Top Performers. Respondentsto describe the data driven decisions managed as separate functions within the indicated a lack of visibility and measure-that help optimize the buying and sales organization. At the end of the day, the goal ment at the top of the funnel as well as atcycles. Even Top Performing companies for both sales and marketing is to maximize the end of the funnel. Sales generaly doesstruggle to gain a holistic view of the revenue (and manage bottom line costs to a good job of making data driven decisions,sales pipeline and justify decisions maximize profit). Sales and marketing leaders but marketing still struggles to close the loopbased on tangible performance data. share accountability for revenue growth. and link campaign execution with revenueRPM can only become a reality when Yet, in practice (at least for the average outcomes. The antiquated B2B marketing anddata driven decisions can be made organization), marketing is accountable for sales processes have constrained organiza-across the entire funnel. Most lead demand generation and sales is account- tions from optimizing the process over technologies still lack out able for pipeline performance and revenue. Two other critical trends make the conceptof the box measurement and analytics The concept of RPM breaks down these of RPM compelling in today’s B2B marketingdashboards to transform execution into divisions of labor to align the organization organizations: digital channels and dataactionable metrics. RPM will be much around a common goal: revenue perfor- access. According to Gleanster research, theeasier to implement when standard- mance. In reality, marketers are charged top three marketing channels for B2B andized metrics provide a dashboard with identifying or creating demand for a B2C marketers alike are email, the website,of the entire RPM lifecycle for rapid product, demand that should ultimately and search engines (SEO and SEM) – allanalysis and data driven decisions. translate into sales and profitability. digital channels. The reality of the situation is that buying and sales cycles are not linear This is easier said than done for many organi- processes. In a B2B environment, budgets zations because marketing is one of the last get cut, initiatives get moved, and inten- remaining functions in the organization to be tions can change rapidly. Digital channels run “by the numbers”. In a Q1 2011 Gleanster allow companies to track implicit and explicit survey, 232 B2B marketing and sales respon- behavior which can then translate into more dents were asked to rank their ability to make meaningful interactions across marketing data driven decisions on critical marketing and sales engagement. In many cases, and sales activities. The findings revealed that means potential opportunities must that the average organization still struggles be kept warm for months or even years. to integrate quantitative measurement and accountability into its marketing processes. This demands a holistic approach that aligns marketing and sales. The confluence Perhaps the most revealing insight from of software-as-a-service capabilities and this research relates to the existence of a unlimited (and highly affordable) data storage Rate & Review Related Research Tell a FriendNote: This document is intended for individualuse. Electronic distribution via email or by post-ing on a personal website is in violation of theterms of use.Entire content © 2011 Gleanster, LLC. All rights reserved. Unauthorized use or reproduction is prohibited.
  3. 3. Revenue Perfomance Mgmt: The Sales and Marketing Playbook Finally Has a Name 3 capacity are serving to empower organiza- ers know that Everyone Else does not? tions with robust, lower-cost-of-ownership Let’s start by dissecting the fundamental technology solutions and the infrastructure attributes of RPM. How does an organization that’s needed to make the data actionable. adopt an RPM approach? Figure 2 shows the What is RPM? four pillars of RPM, some of which have never been included in traditional B2B marketing lead Revenue Performances Management (RPM) management tactics. But like most initiatives, isn’t really a fundamentally new concept. It’s the foundation of RPM speaks to investments more or less an evolution in the way organiza- in people, process and technologies – all tions should structure marketing and sales of which make the four pillars achievable. functions. Gleanster defines RPM as the process by which organizations maximize People revenue generation through data-driven Over the past few years, we have seen decisions that align sales and marketing, an increase in the number of job postings create highly relevant interactions with potential pertaining to sales and marketing alignment, buyers, and establish repeatable metrics for marketing operations, and demand genera- ongoing optimization of the lead lifecycle, tion, with titles like Vice President of Demand across marketing, sales and service. Generation becoming increasingly prevalent. What’s different about RPM? Why? Simple. Companies are waking up the realization that someone needs to take RPM aligns sales and marketing with a ownership of RPM within the organization. common metric and goal: revenue. That may These job descriptions and requirements seem obvious in hindsight, but the discon- typically sound suspiciously like a Vice nect that frequently divides marketing and President of Sales role. That’s understand- sales stems from a lack of alignment in able, given that resources are accountable the way success is measured for each of for, and incentivized by, revenue perfor- the two functions. Few companies would mance. The primary focus, then, is to inject argue the fact that marketing “should” be measurement and continuous optimiza- measured on revenue. Yet revenue attribu- tion into ongoing business operations. tion on marketing campaigns was a challenge for 45% of Top Performers and 78% of Process Everyone Else in the Q1 2011 survey on As previously noted, the buying and sales Lead Scoring. So, what do Top Perform- cycle is typically not a linear process. In order Rate & Review Related Research Tell a FriendNote: This document is intended for individualuse. Electronic distribution via email or by post-ing on a personal website is in violation of theterms of use.Entire content © 2011 Gleanster, LLC. All rights reserved. Unauthorized use or reproduction is prohibited.
  4. 4. Revenue Perfomance Mgmt: The Sales and Marketing Playbook Finally Has a Name 4 to maximize revenue, marketing and sales “significant time” manually creating resources need to be flexible enough to touch measurement dashboards and analytics prospects and customers with relevant and for executive management (78% of timely interactions, no matter their stage in these Top Performing organizations the buying process. RPM demands a holistic utilize a lead management technol- approach to prospect engagement. The lead ogy). That needs to be automated to lifecycle is not a handoff between marketing allow RPM to be a scalable tactic. and sales. Technology plays Rather, it’s an ongoing “Fundamentally absent from a critical role in most sales and marketing automating person- engage- alized and complex ment with a potential operations is a continuous engagement with prospects. But source of revenue. improvement process across these tools are also a primary source It may be appropriate the entire lead lifecycle.” of data for ongoing optimization and for marketing management. or sales to manage primary engagement responsibility at any given time in the process. Lead Lifecycle Management As such, processes must be formalized According to Gleanster research, Top and structured to ensure leads/prospects/ Performers are twice as likely as Everyone revenue is closely monitored no matter Else to utilize nurture marketing techniques. where in the process that lead may reside. Nurture marketing allows companies to build Technology relationships with prospects and pre-qualify these individuals before they are passed to Today, there is an eclectic mix of nomencla- sales. Top Performers also develop nurture ture to describe the technologies that support marketing campaigns to capture sales- RPM: demand generation technology, lead qualified leads that, for whatever reason, management technology, marketing automa- fail to close, to hopefully come back at a tion technology, and, more recently, RPM later time and sell to these already qualified platforms. Most of the features and functions opportunities. These techniques and tactics within these tools have become somewhat demand that organizations take a holistic standardized. These include lead scoring, view of the lead lifecycle from marketing to lead nurturing, multi-channel execution and sales to customer service. Since all of these CRM integration. Despite the maturity of some interactions represent potential sources of these technologies, most solution providers of revenue for an organization, it makes fail to address two fundamental areas which sense to include Lead Lifecycle Manage- throw a wrench into the automation of RPM: ment as a primary enabler of RPM. 1. Connectivity. Lead management tools are very good at managing and Sales and Marketing Alignment measuring engagement in email and Top Performers are two times more likely web analytics, but these are not the only than Everyone Else to share the defini- two channels organizations engage in. tion of a qualified lead between sales and RPM demands a structured approach marketing. Historically, coordinated efforts to measuring the effectiveness of all between sales and marketing has been marketing channels. That means lead known as “alignment”. But RPM differs from management technologies must also traditional best practices in that it calls for help integrate and analyze data from the marketing department to be treated in webinars, events, SEM, direct mail, etc. the same way as the sales department. The Rate & Review idea is: measure what matters, and hold both 2. Dashboards and Analytics. Despite functions accountable for revenue.From an all the progress we’ve seen in the area Related Research RPM standpoint, Top Performers are starting of data visualization, it’s still uncommon to incentivize marketers based on pipeline Tell a Friend to see a single dashboard that provides metrics rather than campaign performance. RPM metrics across the entire leadNote: This document is intended for individual In fact, a small but growing number of Topuse. Electronic distribution via email or by post- lifecycle – from marketing to sales to Performing organizations are breaking downing on a personal website is in violation of the service. In fact, 65% of Top Perform-terms of use. the division of labor between marketing and ing companies indicate they still spend sales and approaching both functions as aEntire content © 2011 Gleanster, LLC. All rights reserved. Unauthorized use or reproduction is prohibited.
  5. 5. Revenue Perfomance Mgmt: The Sales and Marketing Playbook Finally Has a Name 5 single entity, even hiring dedicated executive lifecycle. This is largely what makes theDeep Dive Talking Points level roles that straddle both functions to concept of RPM sticky and unique. The Six make the vision for a unified entity a reality. Sigma and Lean Manufacturing approachWalk away with these 5 key takeaways: have been transforming the business of• Revenue Performance Management Data Driven Decisions Operations for years. Sixty-five percent (65%) is the process by which organiza- While Top Performers strive to make data- of Top Performers (compared to 32% of tions maximize revenue through driven decisions across the entire demand Everyone Else) engage in “ongoing optimi- data driven decisions that align chain, they still have a considerable way zation of sales and marketing processes sales and marketing, create highly to go in some areas. The truth is, the top led by executive leaders in marketing and relevant interactions with potential of the funnel is still difficult to measure sales.” A continuous improvement process buyers, and establish repeatable for most organizations. How do you know whereby organizations define, measure, metrics for ongoing optimiza- exactly which campaigns performed the analyze, improve, control, and re-measure tion of the lead lifecycle, across best? How do you benchmark a poor campaign effectiveness, channel mix, and marketing, sales, and service. performing marketing campaign? What sales operations will invariably lead to the• Sixty five percent (65%) of Top channels deliver the highest profit? maximization of revenue for the organization. Performing organizations (versus Top Performers demonstrate superior Maturity Framework for RPM 32% of Everyone Else) indicated performance from data driven decisions, so it they engage in “ongoing optimi- Gleanster research isolates Top Perform- makes sense to inject data-driven decisions zation of sales and marketing ing organizations based on performance into every stage of the RPM process. In most processes led executive leaders in revenue growth, bid-to-win rates, close cases, these organizations started measuring in marketing and sales.” rates, and pipeline metrics. But research to improve their forecasting capabilities. New on the topic of RPM suggests that even• Top Performers are twice as demands from marketing and increased Top Performers can mature in some areas likely as Everyone Else to utilize targets can be met with predictable knowledge of RPM. For example, the average Top nurture marketing techniques. of how much it will cost to achieve these Performing organization still has very little targets and the most efficient combination of• 8 out of 10 organizations struggle visibility into the effectiveness of different channels to utilize in outbound campaigns. to measure the effectiveness of channels and tactics at the early stages of marketing campaigns in the earlier Continuous Improvement the lead lifecycle. The following maturity stages of the lead lifecycle framework defines different stages of Fundamentally absent from most sales Marketing and Sales maturity as organiza-• Continuous improvement and and marketing operations is a continuous tions move towards a holistic RPM approach. data-driven decisions differenti- improvement process across the entire lead ate RPM from other conceptual frameworks for marketing and sales. Rate & Review Related Research Tell a Friend Note: This document is intended for individual use. Electronic distribution via email or by post- ing on a personal website is in violation of the terms of use. Entire content © 2011 Gleanster, LLC. All rights reserved. Unauthorized use or reproduction is prohibited.
  6. 6. Revenue Perfomance Mgmt: The Sales and Marketing Playbook Finally Has a Name 6 Related Research Recently published Gleansight benchmark reports that may be of interest to senior industry practitioners include: Lead Nurturing Headquarters B2B Precision Marketing Gleanster, LLC 825 Chicago Avenue - Suite C Marketing Asset Management Evanston, Illinois 60202 Social Media Monitoring For customer support, please Customer Feedback Management contact Mobile Marketing or +1 877.762.9727 Online Customer Communities For sales information, please Enterprise Collaboration contact or +1 877.762.9726 The Gleanster website also features Deep Dive analyst perspectives on these and other topics as well as Success Stories that bring the research to life with real-world case studies. To download Gleanster content, or to view the future research agenda, please visit Rate & Review Related Research About Gleanster Tell a Friend Gleanster benchmarks best practices in technology-enabled businessNote: This document is intended for individualuse. Electronic distribution via email or by post- initiatives, delivering actionable insights that allow companies to makeing on a personal website is in violation of theterms of use. smart business decisions and match their needs with vendor solutions.Entire content © 2011 Gleanster, LLC. All rights reserved. Unauthorized use or reproduction is prohibited.