Revenue Performance Management (RPM) Benchmark Report

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Download the full report: http://www.gleanster.com/reports/reports/revenue-performance-management-the-evolution-of-marketing-automation

Gleansight: Revenue Performance Management - The Evolution of Marketing Automation
This Gleansight benchmark report explores the emerging concept of Revenue Performance Management in the context of Top Performers. At the risk of defining yet another confusing technology category in a critical growth phase for marketing and sales automation, Gleanster is committed to helping buyers navigate through the marketing fluff, empty promises, and downright ridiculous expectations. This Gleansight will highlight some of the critical nuances that ultimately make RPM and Marketing Automation sustainable best practices for the future of the complex sale. After all, automation for the sake of automation is of little use to anyone. It’s about results, and for marketers, that means influencing revenue. What is unique and compelling about RPM is the term highlights a continuous commitment to results, while simultaneously embracing all of the features and capabilities that make marketing automation solutions unique and compelling.

At the end of the day, if you are evaluating a marketing automation solution, you will probably be exposed to RPM – so it’s important to understand what it means (and doesn't mean). This report will help define the critical best practices that maximize investments in marketing automation technology.

Business marketing has never been easy, but at least it used to be simple: the job was to find good leads and hand them over to sales. Today, marketers stay involved with potential buyers throughout the purchase process and beyond. The main reason for the change is that buyers themselves now control the flow of information, using the Internet to research potential vendors on company sites, search engines, and social networks. Marketers, not sales people, are primarily responsible for managing these channels and using them to build successful relationships with prospects and customers.

Revenue Performance Management Defined
Revenue Performance Management (RPM) can be defined as the process of tracking and optimizing all marketing and sales contacts through the customer life cycle. The term was originally introduced by leading marketing automation vendors Eloqua and Marketo, and has since been used by some other marketing automation providers.

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Revenue Performance Management (RPM) Benchmark Report

  1. 1. Q1 2013 Gleansight Revenue Performance Management Business marketing has never been easy, but at least it used to beContent simple: the job was to find good leads and hand them over to sales.Part 1: Topic Overview Today, marketers stay involved with potential buyers throughout thePart 2: Reasons to Implement purchase process and beyond. The main reason for the change isPart 3: Value Drivers that buyers themselves now control the flow of information, usingPart 4: Challenges the Internet to research potential vendors on company sites, searchPart 5: Performance Metrics engines, and social networks. Marketers, not sales people, arePart 6: Success StoryPart 7: Vendor Landscape primarily responsible for managing these channels and using them to build successful relationships with prospects and customers.SidebarsSurvey StatsBenchmark KPIsCore TechnologiesGleanster NumbersVendor Quick Reference Guide This broader scope of involvement has been accompanied by higher investment in marketing technology, greater demands for proof of the value created by marketing investments, and closer integration between marketing and sales activities. Revenue Performance Management systems are designed to meet the needs of this new, more demanding environment. Specifically, RPM systems provide a unified view of the entire revenue cycle, from initial lead generation through customer growth and retention. This distinguishes them from earlier marketing automation products, which were primarily limited to lead acquisition and nurture. The unified view lets marketers measure the net impact of each marketing program on final results. They can use this information to calculate the value of marketing investments and ultimately to optimize spending across both marketing and sales departments. Although RPM is a logical next step in marketing systems, its success is not guaranteed. Marketers need to build complex new customer tracking models, work more closely with sales, and correctly interpret ambiguous results. This requiresNote: This document is intended for individual new skills, management support, and disciplined execution. But the rewards – moreuse. Electronic distribution via email or byposting on a personal website is in violation of effective marketing and a clear picture of marketing’s contribution to the enterprise –the terms of use. are worth the effort.Entire content © 2013 Gleanster, LLC. All rights reserved. Unauthorized use or reproduction is prohibited.
  2. 2. Gleansight: Revenue Performance Management 2Survey StatsThe research findings featured in Part 1: Topic Overviewthis Gleansight benchmark reportare derived from the Q4 2012 Revenue Performance Management (RPM) can be defined as theGleanster survey on Revenue process of tracking and optimizing all marketing and sales contactsPerformance Management. through the customer life cycle. The term was originally introduced by • Total survey responses: 219 leading marketing automation vendors Eloqua and Marketo, and has since been used by some other marketing automation providers. • Qualified survey responses: 178 The system features specifically associated with RPM include: • Company size: <$1M (5%); $1 - 10M (22%); $10-100M (36%); • Deep integration with CRM data. A of when an individual moved from $100M - $1B (28%); >$1B (11%) typical marketing automation system one RPM stage to another. These captures profile data about leads movements will be correlated with • Geography: North America (90%); Europe (8%); Other (2%) and contacts, such as name and marketing and sales treatments email address. RPM also captures to assess the impact of those • Industries: Software and interaction history, such as campaign treatments. Technology (33%); Business membership and messages sent. Services (15%); Financial This is used to build a complete • Enhanced reporting and analytics Services (9%); Education (5%); picture of marketing and sales to measure the impact of Entertainment (4%); Other (34%) treatments. marketing and sales treatments. Specific enhancements may include • Job levels: C-level (10%); SVP/ • Tracking customer stages through more sophisticated testing, better VP (31%); Director (22%); the entire relationship with measurement of incremental Manager & Staff (37%) the company. Compared with a impact of treatment changes, traditional sales funnel, the RPM advanced attribution that shares stages begin earlier (with the first credit among multiple treatments, marketing interactions) and extend and value calculations to calculateSample survey respondents: further (past the full contribution “Director, Logitech the initial sale of marketing to additional RPM systems investments. RPMManager, EMC purchases and systems also provide provide a unifiedDirector, Comcast service). The dashboards and RPM model may view of the entire forecasting to projectVP of Marketing, Cardinal Health also include revenue cycle, the size and timing of stages for people from initial lead revenues expectedManager, Intertek who fall off from the current setVP of Marketing, Sony the purchase generation through of prospects and path, such as customer growth customers. ThisManager, Success Factors prospects with and retention.” improved forecastingCMO, Sesame Software no immediate is sometimes purchase intent considered almost asDirector, Aptara and lapsed customers. important as optimizing the marketing and sales programs.SVP, Ez Systems • A history database that stores snapshots of each relationship The broader scope of the RPM over time. This is different from database, compared with traditional standard marketing automation and marketing automation databases, is theNote: This document is intended for individual sales databases, which keep only key to enabling marketers to use theuse. Electronic distribution via email or byposting on a personal website is in violation of current data about each customer. system to optimize treatments acrossthe terms of use. The history database allows analysis the entire customer relationship. RPMEntire content © 2013 Gleanster, LLC. All rights reserved. Unauthorized use or reproduction is prohibited.
  3. 3. Gleansight: Revenue Performance Management 3 systems may also provide additional Sales access to the RPM database is execution capabilities, such as social probably the most important executionBenchmark KPIs media messaging and sales access feature for RPM, since optimizedGleanster uses 2-3 key performance to marketing automation features and treatments often require closerindicators (KPIs) to distinguish “Top data. These are valuable features but coordination of sales and marketingPerformers” from all other companies(“Everyone Else”) within a given data not specifically required for RPM itself. activities.set, thereby establishing a basisfor benchmarking best practices.By definition, Top Performers arecomprised of the top quartile ofqualified survey respondents (QSRs).The KPIs used for distinguishingTop Performers focus onperformance metrics that speakto year-over-year improvement inrelevant, measurable areas. Notall KPIs are weighted equally.The KPIs used for this Gleansight are: • Year-over-year increase in revenue • Increase in customer acquisition rate • Volume of marketing qualified leadsTo learn more about Gleanster’sresearch methodology,please click here or emailresearch@gleanster.com.Note: This document is intended for individualuse. Electronic distribution via email or byposting on a personal website is in violation ofthe terms of use.Entire content © 2013 Gleanster, LLC. All rights reserved. Unauthorized use or reproduction is prohibited.
  4. 4. Gleansight: Revenue Performance Management 4 Part 2: Reasons to Implement Revenue Performance Management solves one of marketers oldest challenges: proving the value of their efforts. The challenge has existed because, until recently, it was often impossible to know which customers had received which marketing treatments. Online marketing methods largely solve that problem because they track interactions with each individual. For outbound treatments, such as email, the system keeps a record of each recipient and how she responded. For inbound treatments, such as banner ads or social media posts, the system can’t identify everyone who saw the message but does capture the messages seen by responders. This information can be combined with data from the CRM system about sales treatments and purchases, also tied to individuals. The resulting database provides a foundation for testing and analysis to estimate the ultimate revenue impact of each marketing effort. But RPM does more than simply achieve more refined goals, such as measure the value of marketing efforts. improving lead quality or increasing RPM systems break the buying process penetration of targeted customer into stages and track customers’ segments. movement through those stages. This allows marketers to identify bottlenecks The process model also allows RPM in the process, determine which stages systems to estimate future revenue are affected by specific marketing more precisely, by projecting movement programs, and calculate the cost of of current customers and prospects moving customers from one stage to through remaining process stages. the next. Marketers can then start These projections rely on historical data to optimize their efforts by focusing that shows how many people move on poorly-performing stages and by from each stage to the next and how moving funds to the most effective long these movements take. They also programs within each stage. Depending take into account delays when some on business goals, this optimization people move into holding stages such can either create more revenue with as nurture programs. The resulting the same marketing budget or allow a projections show anticipated results smaller budget to generate the same by time period, giving marketers a revenue. The same methods can also clear picture of expected over- or 58%38% 65% 77% ** Most Compelling Reasons to Implement* More insight into marketing Measuring marketing ROI Increase revenueNote: This document is intended for individual and sales activitiesuse. Electronic distribution via email or byposting on a personal website is in violation ofthe terms of use. * *According to Top Performers, based on 178 Qualified Survey Responses to the Q3 2011 Gleanster survey According to Top Performers, based on 135 Qualified Survey Responses to the Q4 2012 survey on RPM. **According to Everyone Else shown only when aa notabledisparity occurs relative to Top Performers ** According to Everyone Else, shown only when notable disparity occurs relative to Top PerformersEntire content © 2013 Gleanster, LLC. All rights reserved. Unauthorized use or reproduction is prohibited.
  5. 5. Gleansight: Revenue Performance Management 5 under-production and allowing other prospect. Although marketers still need departments to plan for future volumes. to check for long-term impacts as well,Core Technologies Reports that compare actual to expected stage movements provide an alternative performance also give a clear picture measure for identifying the mostThe basic components and core of trends in results, showing whether productive marketing expenditures.capabilities required for a marketing marketing programs are becoming moreautomation system include: Measure marketing ROI. RPM systems or less effective. Some RPM systems go even further to show the expected provide a repository for marketingOutbound email. Users mustbe able to create templates to results from scenarios such as adding program costs as well as results.generate personalized emails from or removing marketing programs or These can be combined in Return onthe system database. They must Investment calculations to show thealso be able to import email lists changes in program effectiveness. relative performance of each marketingfrom trade shows, print advertising,CRM and other sources. Emails Increase Revenue. RPM systems expense. Accurate ROI calculationsmust contain trackable links to enable marketers to increase revenue require measuring the incrementalsystem-generated landing pages. without adding more budget. For impact of each program. This is difficult, each marketing program, the system since some responses would often haveSocial media. Users can post content captures both immediate impact, such been received through another programto social media, track social media- as response rates, and long-term or channel if the original program hadgenerated traffic, help recipients share impact on revenue. The long-term view not existed.content to their own social media is critical because short term resultsaccounts, and monitor social media The best way to measure incrementalconversations. More sophisticated can be misleading: some promotions may increase response but only add impact is formal split testing, whichfeatures include forms and personalized non-buyers; in extreme cases, a divides a set of customers into twoads within social platforms, using high-responding promotion may actually similar groups, includes only onesocial sign-on to capture more data,and building more detailed profiles reduce future revenue by annoying group in the program being tested, andbased on activities, consumption, prospects or attracting the wrong types compares the two groups’ results. Anyconnections and influence. of people. difference in performance is attributed to the test program. RPM systemsLanding pages and Web forms. Users In practice, it can be difficult to directly include features to support this sort ofmust be able to create Web forms and measure the revenue impact of specific testing, although it can still be difficult tolanding pages that can capture leads marketing programs because many execute and track. At most companies,from system-generated emails and other factors affect the final result. the amount of testing is limited by theother sources. Forms are designed to RPM systems address this difficulty number of prospects available: testcollect prospect information and marry by letting marketers measure the groups must be large enough to producethis with cross -channel behavioral impact of the programs on movements statistically significant results. Tests areresponse patterns allowing the from one stage to another within the also limited by the amount of staff effortorganization to identify which prospects larger process. These movements are available to create and analyze themare ready to talk to sales. These pages more easily tied to specific marketingare hosted by the marketing automation More insight into marketing andsystem and post data directly to the programs because they occur soon after the program touches an individual sales activities. The history databasesmarketing automation database. that RPM systems use to track customer 42% 63% 42% 46% ** Compelling Reasons to Implement* Unified view of marketing Optimize marketing spend Better alignmentNote: This document is intended for individual and sales pipeline across channels with salesuse. Electronic distribution via email or byposting on a personal website is in violation of * According to Top Performers, based on 135 Qualified Survey Responses toto the Q4 2012 survey on RPM. * According to Top Performers, based on 178 Qualified Survey Responses the Q3 2011 Gleanster surveythe terms of use. **According to Everyone Else shown only when a notable disparity occurs relative to Top Performers ** According to Everyone Else, shown only when a notable disparity occurs relative to Top PerformersEntire content © 2013 Gleanster, LLC. All rights reserved. Unauthorized use or reproduction is prohibited.

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