Does the "Revenue Performance Management" message actually work?

Like Michael Brown and David Raab, above, I'm skeptical. Could "revenue performance management" simply be marketing cover for the fact that, as noted in the recent Focus.com info-graphic "Marketing Automation by the Numbers", Marketing Automation can't crack 10% market penetration? (See http://socialmoxie.wordpress.com/2011/06/22/wild-woolly-world-of-marketing-au... )

Revenue contribution and optimization is certainly, as Bill Binch notes, "the real story" ... that vendors are trying to tell. It's an effective slogan as every CMO or VP of Marketing in B2B wants that holy grail of tying marketing programs directly to revenue. If either Marketo or Eloqua really had it nailed, marketers would be beating down the door to buy their products. *10% market penetration* across *110 vendors*? Let's just say the marketing message is likely way ahead of the product realities. Fun fact: Neither Marketo or Eloqua talked much at all about Revenue or Sales until Genius.com started Sales 2.0 and focused their messaging on delivering Marketing that delivers Sales Results. (Note: I was with Genius.com from 2004 to 2010).

I have an obvious bias here working at Eloqua where the term was coined but as someone that has been in the Marketing Automation industry for a while now and works with marketers on a daily basis the term is not a flash in the pan concept.

The major evolution that I've witnessed in the last 5 years is the drive for more and more marketers to understand how their efforts are impacting the bottom line. A few years ago, it was the larger, sophisticated companies that were only able to do this as they had the resources to plan a proper way of measuring results, the people to do the analysis, the technology to track and analyze the data and the budget to pay for all of it. These companies had their own data analysis teams as well as had access to a Business Intelligence (BI) tool that was used to crunch marketing data.

That's not the case anymore. Companies of all sizes are pushing to get these same types of metrics that go beyond lead generation and email click-through rate. Their managers are asking for ROI metrics on their marketing efforts and want customized views into the data. That's partially driven by executives that expect this type of data and is now a requirement to be taken seriously. Again, I am biased here as I'm working with clients that have already decided to invest in marketing automation but I have never seen the demand for revenue reporting and funnel stage analysis from companies big and small that I've seen in 2011.

We're now at the point where the technology is making this desire more of a realty as the tools needed can be found within Marketing Automation and companies don't need to purchase an additional BI tool. In addition, reporting methodologies are now documented and pre-made so marketers have a path to follow that didn't exist in the past or was too cost prohibitive.

While companies still need the right people and processes to make RPM work, the technology framework of RPM is something that will continue to grow in 2011. It will eventually fade but only because it will be standard practice and there will be a new concept that will arise based new demands that companies face.

Craig
RPM is the next logical extension of marketing automation. Similar to MRP growing into ERP or SFA to CRM, many products become more than just a product -- they extend to be a platform or category. We all know that marketing automation is more than just creating leads and nurturing prospects, it's about the downstream impact: driving revenue. That's why measuring and optimizing revenue is the real story.
Note: I'm with Marketo, one of the firms that is changing MA into RPM. If you want validation of the evolution, suggest you visit Dreamforce. In the last 5 years, the classic MA vendors have taken over the exhibition and are proving the transformation.
Bill

I think there is to much focus on the phrase instead of the underlying principals behind it and that is marketing and sales working in unison to help improve and manage revenues. I do not see it as a brand new philosophy for sales, but for most B2B marketing this is a new concept and one that many are still trying to adapt to.

To Joe's point about forecasting, the forecast does not start when their is an actual dollar figure on the deal. The forecast begins in the "marketing pipeline" of leads that are being nurtured affectively prior to being turned over to sales. As I have mentioned before, it is not longer sales & marketing, but marketingsales managing the pipeline and hence revenue.

So in short, yes, I believe the RPM message is solid, it is part of the automation industries story and all due respect to Michael, to remove the revenue discussion away from automation, pushes marketing back to the days of "necessary evil." Managing revenue (whether you call it RPM or not) is every part of marketings job as it is sales, just ask those organizations who have adopted this mindset and seen radical transformation - 5 of them were on display last week at the Sirius Decisions Summit.

Carlos Hidalgo
The Annuitas Group
@cahidalgo

I agree with Joe and Mac. "Revenue Performance Management" message works, but it takes a lot more than that to earn the trust and business from clients. Marketing Automation has helped many firms, especially in B2B, connect their marketing activities to revenue. This is a great win for marketing who always knew the ROI was there but did not have the tools or data to prove it. Those who use the phrase "Revenue Performance Management" as a boast of their capabilities had better be prepared to back it up not just with MA technology, but with the skills and people to implement it and use it effectively, best practices processes, and the ability to integrate effectively into the clients business systems and processes. When you operate at this level, then the phrase means something!
-Kevin

Let me have a little bit of that RPM Kool-Aid cause I buy it. RPM is the next phase of SFA. In fact, RPM should be the end goal of SFA. An end-to-end RPM "solution" should enable a sales organization to more effectively manage an opportunity from inception to close.

Such a solution should include technology, content, process and training components. The technology layer would be made up of a marketing automation application like Eloqua's or Marketo's paired with a sales playbook / sales process automation application like Kadient's, TAS Group's or Playboox's - all integrated within an SFA application like Salesforce.com's. The content layer would account for what content you need to support advancement of each stage of the buying / selling processes.

But for any of this to work seamlessly together and generate the desired up-tick in revenue (and the stated goal of an RPM project), you first need to figure out the RPM process layer where you clearly define the end-to-end RPM process and then map how the content and technology will enable it step-by-step.

Once you have that all cobbled together, you need to train your sales organization on how to make optimum use of each component (process/content/technology) because, after all, RPM should be about enabling your salespeople to manage revenue performance more effectively.

Hi Craig! Unfortunately, Revenue Performance Management is simply another slogan, probably well-meaning but simply more obfuscation. Of course, with any slogan, we must also have its acronym, in this case RPM. (Might NASCAR object?)

Every once in a while an acronym sticks … CRM for example … but most have a very short half-life. Remember ROC? Return-on-Customer. Big splash for one week until a business magazine made fun of it. And how can we forget CEM? Customer Experience Management. Their web site gushed about “the methods and technology through which customers interact with a business.” Such things used to be known as "answering the phone," "courtesy," and "customer service.”

So I predict a short-term barrage of RPM posts and pitches, and then a healthy re-focus on what marketing automation really is … a valuable tool for helping sustain and advance a company’s customer acquisition process.

Wow Michael, nice to meet someone even more skeptical than I am. I think RPM has some actual substance, insofar as it requires building new datamarts for taking a longitudinal view of customer relationships. (New to B2B marketing automation, at least; such datamarts have existed elsewhere for a long time.) That does allow marketers to handle things differently and better, since they'll have new information available. It might even help marketers raise their status in the larger organization, since the new information is actually of interest to CEOs, Sales, and others outside of marketing.

I agree with Michael and Carlos, it is not the catchy phrase that matters but the principles behind it. In fact, I like to believe that eventually marketing will be judged like most other things in the business world, ROI, or a return metric, not just on revenue alone. However, any metrics that make marketing an accountable process is moving in the right direction.

When marketing can demonstrate it's return, it will no longer be the first thing cut when budgets run tight. I look forward to that day.

Revenue Performance Management - RPM - is a fancy way of saying "measure marketing's impact on sales". It's a made up acronym designed to impress the impressionable - in this case executives. Taking nothing away from the concepts and technology behind the phrase (which I fully support), Joe hits it on the head when he says it can make the eyes glaze over.

Which brings me to the question at hand: Does RPM work as a message? Like a lot of things, it depends on the audience.

Our customers range from the small business just getting started with marketing automation to the highly experienced Big Company, Inc. who in some cases have defected from better known MA vendors. As you might expect, the bigger, better resourced organizations are more amenable to the RPM message. At the other end of the scale this message has no value whatsoever. In between lies the expected spectrum. Bottom line, your mileage may vary.