One of the things I find exciting about modern B2B marketing is that not a day goes by without rapid change and new thinking. It’s a great time to be a B2B marketer, but it’s also a quite challenging time. For example, over the past year, marketing automation vendors have shifted much of their messaging from a focus on automating marketing and powering demand generation to that of managing ‘revenue performance.’ Seems like a good thing–revenue is good; however, for some B2B marketers this is probably a bit confusing, and so the obvious question is whether we’re still talking about the same technology and capabilities. The answer is yes and no.
The truth is, while we’ve seen strong growth in the marketing automation space, which David Raab believes doubled to more than $200 million in spending last year, we’ve also seen a high failure rate with marketing automation adopters–a reality my colleague, Adam Needles, touched on in an earlier post.
Marketing automation projects fail when B2B marketers can’t connect the dots. One, they need to have a clear picture of how to build a successful, modern demand generation program from a process and program level. And two, they need to be able to tune their demand generation efforts against revenue outcomes.
So far, the majority of marketing organizations have focused on the technical aspects of automating the management of email pushes, contacts, campaigns, and they’ve largely tuned these efforts against the delivery of leads to sales teams. But ultimately tuning demand generation programs requires a clear and rationalized focus on the buyer and his/her buying process, alongside a picture of how enabling this process results in revenue. I do believe marketers today understand they need technology to target the right buyers, to get the right leads to sales, to nurture leads through their buying process–automatically, and to measure everything from prospect Web behavior to marketing generated revenue, but putting the emphasis on technology, versus demand generation process evolution, is a mistake.
The emerging focus among marketing automation vendors on revenue performance is a positive trend that is helping to shift marketing automation beyond the technical and ultimately will help B2B marketers connect the dots between demand generation inputs and revenue outputs.
Decoding Marketing Automation Vendors’ Terminology
Vendors such as Eloqua and Marketo are leading the charge for driving visible B2B marketing impact, while optimizing content and lead processes along the way. While each have their own way of defining it, they support the same movement–strategic demand generation, visibility into the marketing/sales pipeline and maximizing efforts to directly impact business growth through B2B marketing inputs.
Eloqua calls it “Revenue Performance Management” and defines it as a “systematic approach to identifying the drivers and impediments to revenue, vigorously measuring them, and then pulling the economic levers that will optimize top line growth.” So it isn’t just about putting technology in place, it’s about understanding how different marketing activities directly impact revenue, and having the real-time insight to be proactive about changing and adjusting either content, messaging or process (internal or external).
Marketo’s spin is slightly different but basically means the same thing. How are you being scientific with your marketing, how accountable are you holding the marketing organization for driving revenue? While Sales is traditionally the revenue generator and predictor, Marketing’s role is evolving, and according to Marketo, should now be responsible for sales forecasting and direct revenue generation. Marketo calls it “Revenue Cycle Analytics” and defines it as the ability to track, measure and optimize every marketing program or piece of content used to progress and better understand buyers as they move through the Revenue Cycle.
Connecting Demand Generation to Revenue Performance
Carlos Hidalgo, CEO of The Annuitas Group, recently commented that early adopters of marketing automation are shifting their “marketing focus to demand generation, customer acquisition and retention [because] marketing is becoming increasingly relevant and a strategic part of the business in terms of revenue creation.” He also stated, that since marketing is generating more quality leads, developing nurture programs and customer-focused campaigns, there has been an evident shift to unite sales and marketing.
DemandGen Report also recently published a study, “The State of Marketing Automation,” and noted that companies using marketing automation are now embracing Revenue Performance Management (RPM) as a means to optimize sales and marketing performance to drive revenue predictability and consistent growth.
What is the impact on Demand Generation? And how can Revenue Performance Management be leveraged effectively?
The true (r)evolution in demand generation is being led by Buyer 2.0. It’s the buyer who now sets the rules, deciding how they’d like to be engaged, acquired and nurtured through their individual buying process. Smart companies understand this shift is real, and are reacting with a holistic demand generation process that acknowledges buyers’ needs–each step of the way–and addresses them accordingly via content and careful timing of its delivery. That’s the demand generation model you want to work toward achieving, a dual buyer-centric and operational process mindset that emphasizes understanding your buyer intimately, then leveraging marketing automation to provide buyers exactly what they want, when they want it, to make their purchase decision. The goal of this activity, of course, it to ensure the buyer’s choice is your product or service–along with a resultant revenue outcome.
At Left Brain we believe there are different layers of components that are the key to successful, modern demand generation. Technology is the bottom layer, or the infrastructure that makes your strategic efforts possible. It supports your lead management process, which makes things run more effectively. But content marketing is arguably the most important layer of your demand generation strategy.
While the infrastructure and lead management processes make things run more smoothly, the content is what really progresses prospective buyers through their buying stages. The content is what’s relevant and valuable to the customer and it’s the most important because it’s so dependent on buyer feedback and reaction and because it essentially forms the basis for modern buyer dialogue.
Content is the basis for every interaction you have with your buyers, so there needs to be a heightened awareness of how it’s performing, what should be changed, and what should come next — i.e., how to tune our content to improve our demand generation outcomes.
Revenue performance management is how you should measure the success of this content marketing, and how you subsequently should optimize your overall demand generation efforts. It helps you understand how aligned your programs are, and whether or not you are in fact reaching the right buyer, with the right message, at the right time. It’s a strategy designed to provide visibility into buyer interactions throughout their entire buying process, optimize those interactions by providing value at every possible intersection, and enable revenue predictability and more rapid growth.
Revenue performance management really comes down to understanding the link between your content inputs and revenue outputs. It provides a framework for optimizing that content continuously so it is always relevant and always valuable to the buyer … and is more and more aligned with that buyer’s journey over time. This is the key to building repeatable and sustainable demand generation.
Marketing automation is infrastructure, not a strategic process. It’s an extremely valuable solution; however, to truly drive marketing revenue, your demand generation needs to be holistic and must consistently address your buyers’ needs. Content is at the core of successful demand generation, and it’s effectiveness should be measured through a Revenue Performance Management context.