Marketing is often regarded as an intangible, or even non-performing division that only wastes money. Indeed, proving the business value of marketing activities can be difficult, especially in a quantitative basis. This is where the concept of revenue marketing comes in
Although it’s difficult, it is by no means impossible to develop a result-driven marketing plan where we can proof the credibility in relations to revenue. Here, we will learn how.
So, in this revenue marketing guide, we will discuss the key concept of revenue marketing, as well as actionable activities you can do to implement it.
Let us first begin by discussing the definition and core concept of revenue-driven marketing.
What Is Revenue Marketing?
Revenue marketing, in essence, is marketing actions that are measurable in relations to revenue, and are also repeatable to generate more revenue.
So, there are two main factors to consider in revenue marketing: measuring the right metrics and especially ROI in relation to revenue generation, and documenting these actions to allow repeatability.
In the past, revenue generation used to be the sole responsibility of the sales team. Yet, that is no longer the case nowadays as the lines between sales and marketing are now more blurred than ever.
With that being said, alignment between sales and marketing plays a huge part in revenue marketing: closing the deal is now also the responsibility of the marketing team, and on the other hand, sales should also contribute in qualifying, nurturing, and even generating prospects.
Besides the sales team, marketing team should also work together with other teams in a revenue-driven marketing model: from customer service, manufacturing, and even HR among others.
Why Revenue Marketing Is Important?
Marketing contribution is often downplayed as immeasurable and intangible. Often, this accusation comes from the sales team, which is often more focused on tangible results.
Imagine selling a product without tracking your costs. Can you be sure you make any money with each sales? Can you measure how much profit you’d get from each sold product? Of course not.
This is what usually happens to marketing in most businesses. There is no visibility into how much a campaign, a marketing channel, or a marketing activity contributes to the actual sales -the bottom of the funnel-. In short, we can’t measure the marketing effectiveness. (link)
If we can’t measure the effectiveness of your channels and campaigns, we can’t determine which channels to invest in and which channels to neglect. Since we can’t determine accurate ROI, we also can’t determine our marketing budget accurately.
With revenue marketing, we can analyze each marketing channel and campaign’s contribution to revenue to determine:
- The proper percentage of revenue that should be spent on marketing
- Invest on the most effective marketing channels, tactics, and campaigns in relations to revenue
- Eliminate marketing channels that are not effective
Revenue marketing, ultimately, will allow a more efficient marketing practice, optimizing cost-efficiency and increasing ROI.
Implementing Revenue-Driven Marketing
1. Align Marketing Goals With Business (Revenue) Goals
The goal of virtually every business is to generate more revenue and profit through many different means. Marketers obviously understand this, but it is surprisingly often than the marketing goals do not align well with the overall business goals.
Part of this is because marketers tend to think in a long-term basis: build a strong brand to attract more audience in the long run, develop an established content resource to build credibility, implement SEO for a long-term online presence, and so on. While we can argue that these activities will indeed contribute to revenue in the long run, it’s hard to measure it.
So, the first thing you should do is to set up an actionable revenue marketing goal: look at the overall revenue target of the business, and commit to a certain percentage. For example, marketing could commit to contributing 40% of the annual revenue target.
This might be a scary thing for marketers who are not used to having an accountable revenue numbers. Yet, it is a critical process not only in aligning marketing and sales, but for the overall business success.
Doing this will allow you to have a new perspective for your marketing efforts: when developing a marketing plan, you can now ask the question of, “how will this marketing campaign/tactic/channel help us in reaching our revenue target?”
2. Marketing Attribution:Measuring The Right Metrics
Revenue marketing is sometimes called “data marketing” because of its measuring nature, and so revenue marketing will be closely tied to marketing attribution. (link)
The idea of marketing attribution is “attributing” credits to specific user actions, so we can determine the contribution of each user action, in this case, to revenue generation.
However, just because our aim is to track revenue, doesn’t necessarily mean we should use last-touch attribution. In fact, using last-touch exclusively can be misleading, since in most cases, there are other user actions besides the one leading directly to conversion that contributes to revenue.
Multi-touch attribution model or custom attribution model is generally your best bet, but it will require a thorough understanding of your business process, buyer’s journey, and determining the important touch-points that contribute to revenue.
In the past, this process is arguably easier, as we can simply analyze the sales-marketing funnel and figure out the most important user actions in relation to revenue. Yet, that is no longer the case nowadays as the buying process becomes increasingly complex with great variations.
This is where having a proper analytic tool where you can set-up attribution is extremely important. Although there can be many different attribution tools to use and different metrics to track depending on so many factors, here are a few principles you should focus on:
- List the marketing channels/campaigns and track metrics related to revenue across these channels
- Use a proper marketing analytic tool and integrate it with an automation tool (internal link marketing automation tools)
- Monitor your report(s) regularly in relation to revenue
3. Sales-Marketing Alignment
We have discussed how a proper alignment between marketing and sales team is really important for revenue-driven marketing, and here we will discuss the practice.
The thing is, marketing and sales teams are very different from each other, leading to a lot of frictions between the two. So, how you can manage these differences will be crucial in implementing revenue marketing.
The key in this alignment is obviously communication, which is arguably the main source of the differences in the first place. Salespeople interact with prospects and customers a lot more that marketers, and so marketers should especially ask these questions:
- What defines a qualified lead for the sales team?
- What are the important questions asked by customers? Are there any issues marketing should know?
- How can marketing team help sales better in connecting with prospects and customers?
On the other hand, sales should help marketers in:
- Qualifying, and even generating leads
- Give important insights to create targeted content
- Create Service Level Agreement (SLA) together
The idea is, by working together, both marketing and sales can be more effective in driving revenue. Tracking ROI will be much easier because the necessary actions will be more visible, and so you can optimize these crucial actions.
4. Choosing The Most Effective Marketing Channels
Now that we have setup a proper marketing attribution model and can track the important metrics across all channels, you are now in a better position to decide which marketing channels, tactics, and campaigns are worth optimizing.
On the other hand, you can reduce budget for less effective channels or eliminate them altogether.
Generally, according to your attribution model, the channels with fewer touch-points with recent customers, as well as those with lower number of touches should be eliminated first.
For tactics that are not producing the desirable result, you have two main choices: either to optimize or eliminate them. There are cases when a brand new channel simply hasn’t gained enough traction, and you might need to find ways to optimize it.
For campaigns that simply have failed, or you have optimized them several times before, you might decide to eliminate them. Yet, this doesn’t mean they will totally go to waste: find out the reasons why they failed, share these with your team so you don’t repeat the same mistakes in the future.
Obviously, this will vary greatly between industries, business models, and companies, but the main principle remains the same: optimize and leverage those that work, and eliminate those that aren’t working.
Revenue marketing is about finding out which campaigns and channels that bring more revenue, and focusing on these instead of ineffective ones.
However, even after you’ve figured out these effective channels and optimized them, you should always keep in mind that innovation is still very important. Don’t be trapped in a false sense of security, and keep trying new tactics and strategies to grow your revenue even more.
In the end, revenue marketing is a never ending process, and you should embrace the upcoming changes.