Share what you know with millions of people
Focus is the best place to turn what you know into remarkable content
0
Is RPM an extension of marketing automation or a whole other category?
The new message from the automation space in Revenue Performance Management (RPM). Eloqua and Marketo are most notable for messaging around RPM and promoting it in the B2B marketing space. As RPM originated with the automaton vendors, is RPM an extension of automation or a whole new category?
Events
- Dos and Don'ts of Small Business Marketing May 29 @ 11 am PT
- Lead Nurturing 202: The Next Generation May 31 @ 11 am PT
- The Tricks to Paid Media June 6 @ 11 am PT
- Display Advertising for Brand Awareness June 20 @ 11 am PT
Related Activity
3 Answers
Hi Carlos,
This is Jim Williams, the Director of Product Marketing at Eloqua. The short answer is that we see Revenue Performance Management as more than simply an extension of marketing automation. Marketing Automation is a necessary requirement of RPM (as is sales force automation), but just implementing these technologies alone doesn't equate to RPM.
RPM is a business strategy - meaning, the proper alignment of people (skill-sets& roles), process (methodologies & best practices) and technology (applications that span the marketing & sales process) to improve revenue growth, profitability and predictability. To make revenue predictable, executives need to not only manage their existing funnel, but get access to truly actionable analytics, statistically relevant benchmarking data and long term revenue models that they can believe in.
A good analogy is Supply Chain Management, a business strategy aimed at managing a network of interconnected businesses processes involved in provisioning products for end customers. Businesses wanted to get goods to customers quickly and that involved uniting a whole range of separate processes like Customer relationship management, Customer service management, Order fulfillment, etc. An entire industry has grown up around the concept - vendors, consultants, professional development services, etc.
The same can be said for RPM. Decoding the science of revenue creation requires businesses to understand and align the various disconnected customer interactions that happen throughout the buying process, like social media tracking, website engagement, content marketing, demand generation, lead nurturing, lead management, and pipeline management. That can be a tall order, but the good news is that a bunch of factors have combined to make this possible:
1. Customer data is everywhere, data integration has significantly improved and the cost of data storage has significantly decreased. That means businesses can actually analyze customer behavioral data with past purchase and customer service history to segment and communicate with the buyer in a more personalized fashion than they ever could before.
2. The business process improvement techniques used so successfully in supply chain management are now being applied to the revenue cycle. Given that sales and marketing represent the largest expense category for many organizations, it is no surprise that companies are applying these techniques to the front office to optimize performance and revenue output.
3. The widespread availability of easy to buy, easy to implement cloud-based technology enables businesses to engage with buyers at the right time, with the right message, via the right channel.
The great news is that more and more businesses are embracing this idea as it spreads through customer examples (Hint: check out the great Dreamforce presentation by Eloqua, Informatica, McAfee and TrialPay at http://www.youtube.com/watch?v=grdebNYGUhk). The strategic focus on revenue has raised the visibility of the marketing automation industry, even if marketing automation is only one piece of the puzzle.
Hope this helps,
Jim
We agree that Revenue Performance Management (RPM) is a new business category, definitely not just an extension of marketing automation. We at Marketo started talking about revenue when we first declared the “revenue revolution” way back in July, 2008: http://www.marketo.com/about/news/press-releases/marketo-declares-a-revenue-r.... The thinking evolved further when our investor, Bruce Cleveland, introduced the term “revenue performance management” in his blog in October 2009 http://www.interwest.com/rolling-thunder/on-demand/the-case-for-revenue-perfo....
What’s exciting is that today more and more companies are focusing on RPM, especially since today’s number one imperative is driving more revenue, more profitably, and more predictably.
It might be helpful first to examine the underlying business needs that spurred the creation of RPM. The fact is the current sales and marketing model is at best obsolete, and at worst, totally dysfunctional. The following two data points help to tell the story:
- 52% of sales reps do not achieve their sales goals (CSO Insights 2010)
- 94% of marketing qualified leads will never close (SiriusDecisions)
The dysfunctional state of the revenue creation process is partly a result of the longstanding inability of sales and marketing to work effectively together. But, it is also due to the volatile and increasingly complex business environment, in which digital media and especially social networks have caused a sea change in buying behavior. This has given even more control to customers and prospects, enabling them to actively search online and collect information from trusted sources before making their buying decisions.
RPM is the breakthrough management process that enables a company to align its sales and marketing activities to engage the newly empowered buyer at the right time, in the right way, throughout the revenue cycle. The practice of RPM represents an historic shift in how companies create, manage, and accelerate revenue – the lifeblood of any successful and growing business, be it a Fortune 50 global corporation, or a hard charging start up.
RPM’s transformative principles include:
1. Responsibility: Holding marketing and sales equally responsible for growing revenue.
2. Integration: Implementing a systematic process – a model – for nurturing prospective buyers through the revenue cycle, and coordinating buyer engagement at every step of the process.
3. Automation: Investing in technology that ensures prospects and customers to get the right information at the right time throughout the revenue cycle; this includes managing leads, lead scoring, and handing off sales ready prospects. Equally important, providing the sales teams with the information and tools they need to prioritize their time so they can engage with the most qualified prospective buyers, at exactly the moment each buyer is ready to act.
4. Measurement: Measuring the effectiveness and return-on-investment of spending on people and programs at every step of the revenue cycle, across both marketing and sales.
5. Agility: Using data to quickly allocate investments to achieve unprecedented visibility and predictability into revenue performance.
6. Continuous Improvement: Continuously measuring, analyzing and improving the revenue cycle to increase effectiveness. Similar to the way Six Sigma eliminated defects on production in the 1980s, RPM establishes a set of best practices for sales and marketing and uncovers opportunities for improvement.
More and more corporations are coming to the realization that they need to change their marketing and sales organizations, their metrics, their processes – their entire revenue engines. Revenue Performance Management helps businesses transform their marketing and sales operations and usher in a new era of efficiency and growth. Ultimately, it’s about inciting a revenue revolution!
Jon
Sorry to be late to this thread.
I like Jim’s analogy of Revenue Performance Management (RPM) to Supply Chain Management (SCM) since it provides a useful context for both “managements” and how they really boil down to rationalizing processes and procedures already at work – with varying degrees of success – in most organizations. To the degree that rolling them up into RPM helps organizations improve their performance, I’m all for it.
My issue with RPM is that it’s too big a bite right now for the marketplace as a whole. There may be some cutting-edge organizations that are ready for it, but a look at marketplace penetration levels for Marketing Automation (MA) suggests that there’s still a long way to go before that’s been fully absorbed, let alone addressing RPM. As someone pointed out in a recent discussion, most MA systems are unfortunately being used primarily for “glorified email” which sort of sums up where the marketplace is vis a vis RPM.
Maybe RPM is the umbrella concept, but it seems to me that focusing on smaller bites like marketing and sales alignment, marketing automation, sales force automation, lead nurturing, CRM, etc. will be more productive. These smaller bites make up people’s everyday work lives, and their benefits have the immediacy to rally them around implementing these changes.
As a marketer, I can appreciate RPM’s value as a differentiator and a way to transform the largely feature-oriented story of MA into the benefit-oriented story of RPM, but I think we may be too far out ahead on this one.
Answer This Question