Revving Up Your Revenue Marketing Engine
If you were to google the term "Sales and Marketing alignment," you’ll see an astounding 44 million search results. If you were to add "2018" to that search term, it will still yield almost 35 million results. I find this both fascinating and befuddling at the same time.
Haven't we solved this by now???
We're all familiar with the typical disconnect scenario. Marketers are excited about exceeding content reach and impression targets, launching a new blog post, or that 200 people have registered for our upcoming webinar.
But, if you were to poll a marketer on ARR or ACV growth rates, customer acquisition trends, pipeline health, or time to revenue velocity, would they be able to articulate as clearly?
At the end of the day, regardless of whether your channel marketing lead has responsibility to market enterprise software, a widget, or a professional service, he/she is in the business to drive business.
This means revenue.
Revenue Marketing Defined
Revenue marketing is defined as the development of repeatable prospecting programs that drive new customer acquisition and measurable sales.
This starts with building a joint demand management plan between sales and marketing. Ask your teams:
What is our revenue target?
What pipeline multiple do we need to build to ensure we achieve our revenue target - is it 3X? 4X? etc.
How much weighted (pipeline value) pipeline currently exists?
What's the gap that we need to close to ensure a healthy rolling 3-4x pipeline?
What is the expected contribution of that pipeline to come from marketing? From sales? From other sources?
Let's use an illustrative example where the Revenue Target is $100M, therefore a 3X pipeline requirement = $300M. Let's assume we already have $100M in current pipeline, so our gap to fill is $200M. Let's also assume that marketing owns 40% of the pipeline contribution model. So in this example, marketing is responsible for building $80M in pipeline (40% of $200M = $80M).
How to Develop a Revenue Marketing Plan
Once you’ve defined the marketing pipeline contribution (in our illustrative case, $80M), you have the basis to build your revenue marketing plan.
Additional key questions to answer:
What's the average contract/order value?
How many sales accepted leads (SALs) do I need to generate?
What's the conversion rate of Marketing Qualified Leads (MQLs) to Sales Accepted Leads (SALs)?
What % of MQLs do we expect to come from inbound vs. outbound?
What tactics, content and offers have proven most effective for door opening, lead generation, pipeline acceleration?
In our example, marketing is expected to generate $80M in pipeline. This means:
If the average contract value were for example, $100K, we would need to generate 800 Sales Accepted Leads (SALs). ($80M pipeline divided by $100K ACV = 800)
If on average, we converted 40% of marketing qualified leads (MQLs) into SALs, we would need to generate 2,000 MQLs. (800 SALs divided by .4 = 2000)
And if we expected 50% of our MQLs (1,000) to come from inbound, and we typically convert 8% of inbound responders into MQLs, we would need to generate 12,500 responders from inbound marketing efforts. (1,000 responders divided by .08).
Regardless of whether you’ve hired a channel marketing lead internally, or you are soliciting third party support, these simple forecast exercises are paramount to not only having clear objectives and goals for your marketing plan, but also to ensure your objectives are clearly aligned across sales, marketing, and executive leadership.
Top 5 Recommendations for Revenue Marketing Success
Here are some additional recommendations to ensure you not only build an aligned revenue marketing plan, but that you can achieve predictable results and on-going success.
Operate as One Team
Align Key Performance Indicators (KPIs) between Sales & Marketing that drive one-team behavior. Marketing should have a primary KPI for revenue. Sales shouldn't be rewarded differently for self-generated pipeline vs. partnering with marketing. Agree on what the right lead definition is for today, and constantly evaluate lead quality against a clear and agreed to set of criteria.
Focus on the Foundation
Establish an "always on" stream of inbound activity via content marketing, SEO, social, and digital channels. Build operational rigor into your outbound tele-prospecting program. Develop an ongoing plan to supplement territory account calling with targeted campaigns armed with strong lists and door opening content. This takes work!
Engage Everyone in Marketing
Enlist the subject matter experts (SME) across your company to scale marketing content development (blogs, white papers, presentations, product use cases, customer success stories, etc.). When they develop content, they become more engaged and vested in the campaigns and outcomes.
Manage Your Monthly Run Rate
Tightly monitor the number of MQLs and SALs you’re achieving against your plan each month. Make necessary adjustments within the quarter, before you have a sizeable clawback to make-up. Tracking and adjusting regularly also avoids unwanted surprises.
Measure What Matters
The most important thing to measure will differ based on your maturity state. For instance, if you are in stand-up mode, you will want to measure engagement and lead rates against must-win and named accounts. If you've been operational for some time, you will want to measure spend economics with expected YOY improvement on cost per lead, cost to acquire new customers, etc.
No matter what your top business initiatives are, the key to revenue starts with a strong alignment between sales and marketing. This teamwork should extend into performance metrics, with everyone measured and paid on the same revenue goal. Marketing then needs to translate these goals into the best strategies to build the pipeline and fine tune it through constant testing and measuring of customer acquisition and retention strategies.
With all of this in place, your marketing engine will be seen as a critical part of the overall company performance and recognized for consistently delivering a measurable sales impact.
About the Author
This was a contributed blog post from Michele Weber, Chief Marketing Officer (CMO) at eOriginal, one of North America’s fastest growing technology companies in digital lending transformation and management. Prior to her time at eOriginal, she held senior positions at SAP and AppNexus.