The traditional view of marketing is flawed. Most organisations view their marketing department as a cost center or a necessity to direct potential customers to the real gem: the product. Luckily for us in the marketing world, companies are starting to realize the value we can bring through revenue marketing. As the Marketing Director at Hexagon, a global leader in sensor, software and autonomous solutions, I’ve lived through this process and learned some vital lessons that I’ll share with you.
Over the years I have worked for several organisations in different fields, but marketing always seemed to operate the same way: demand for double-digit growth, incessant talk about the “customer” but product was king, and marketing was viewed as a cost center but expected to show revenue results. Unsurprisingly, we delivered mediocre results and we struggled to move the dial.
At first, I thought I was just unlucky, but after attending numerous marketing conferences and talking with immensely talented marketers, I realized we were all sharing similar experiences and challenges. I realized I was not alone! You probably aren’t either. Unless you belong to the lucky few that work in amazingly advanced, deeply-pocketed, and heavily-resourced marketing teams, you’re in the same predicament as us. Don’t believe me? I have the stats to back it up!
According to B2B Marketing Trends, only 55% of marketers feel empowered to collaborate with sales, 53% feel they share goals, and another 51% feel they have adequate data flow between sales and marketing. With sales and marketing being the two key functions in any organisation tasked with generating revenue, it’s evident that marketers are struggling to align with sales and demonstrate that they are more than just a cost-center.
So, what came of my story, you ask? In this all-too-common scenario of being dumped in the cost-center basket, we started searching for a way to get out of this vicious cycle. We had to re-invent our approach to marketing and look at what we can do to meet customer needs profitably.
Enter revenue marketing!
Revenue marketing can be an immensely useful tool, but only when used correctly. In my experience, marketing organisations love to use new technologies, like marketing automation. However, they rarely get the full benefits of such technologies because the changes only relate to training of operations or campaign teams. To create the profound transformation necessary to realize true business value from marketing, you need to combine dedication, technology, and skills. So, where do you start?
Revenue Marketing Maturity
While there are many different approaches to revenue marketing, I’m a big fan of the Pedowitz Group’s definition that revenue marketing is the development of repeatable prospecting programs that drive customer acquisition and measurable sales. The key to revenue marketing is to forecast the results and impact of your activities predictably.
As a rookie revenue marketing team, we needed a benchmark to guide us through the process of moving from a cost center to becoming more customer-focused and achieving better alignment with sales. The Growth Engine’s Revenue Generation Maturity Framework is an excellent guide for senior leaders on their path to attaining revenue marketing maturity. It examines the four stages organisations will go through as they move from a traditional and tactical set up to a sophisticated revenue generation engine:
- The Crawl stage is the traditional view and mode of operations where marketing is viewed as a service provider to sales and the business, with few established processes and limited or no use of marketing technology. Marketing efforts are focused on creating awareness and advertising. Performance is measured based on cost and number of activities.
- In the Walk stage, marketing is not aligned with revenue goals, but there is an awareness of customer demographics, CRM is in place but not used as a mandate by sales, and email marketing is used to push out single email campaigns. At this stage, performance is measured based on the number of leads supplied to sales.
- At the Run stage, marketing plans are aligned to business goals with annual and quarterly campaign plans. The marketing organisation is well designed with CRM and automation tools in place, but team compensation is not aligned to revenue targets. Performance is measured by cost per lead, percentage and value of leads provided to sales.
- Finally, in the Leap stage, annual plans are aligned with business plans and quarterly campaigns are aligned with revenue objectives and ROI expectations. There is a CMO at the helm with a well-defined and optimized team comprised of demand generation, program managers, and digital and content operations. Processes are well defined and the adoption of marketing technology is beyond just automation, with a more sophisticated stack enabling extensive data collection and predictive analytics. Compensation is based on revenue and marketing performance. Performance is measured based on CLV, ROI, conversion rate, and other advanced metrics.
Lessons in Building the Revenue Marketing Engine
In applying revenue marketing practices, my team was able to achieve significant growth into double digits! However, this didn’t occur overnight. It was an ongoing process that took years to reach the Leap stage fully. Here are the key lessons learned:
- Executive buy-in is crucial, and marketing is part of everyone’s role. We are in the age of the customer, and everyone has a role to play.
- Creating the revenue engine is a change management process that’s not for the faint-hearted. It can take years to get all the gears moving correctly.
- A holistic view of the organisation that goes beyond people, process, and technology is critical.
- It’s all about people! People make and break any organisation and marketing engine. Ensure the best talent is in place to support future vision and goals. Resilience and innovation are essential.
- Revenue marketing is not the sole purpose of marketing – we cannot neglect the brand. Having said that, revenue marketing is a priority for a lot of businesses and marketing needs to speak the language of revenue.
- Although the principles of revenue marketing are universal, there are different contexts and scenarios. Be willing to adapt!
Take the Next Step
Transforming a marketing organisation from a cost center to a revenue engine takes significant investment, but the payback is substantial. It is essential to start with an overall assessment of your sales and marketing organisation and develop a comprehensive change management program. Even if you have achieved revenue marketing maturity, it can be beneficial to step back and revisit the foundation so that you can leap forward.