I recently ran into Brian Reilly in Cancun, Mexico, at a social event. With me being on the sales side and Brian on the marketing side, naturally, a conversation ensued. (No food was thrown, we assure you.) Brian is the founder of Solerte Consulting. I thought it would be valuable for you to hear from someone I consider a very savvy marketing expert who understands that sales is marketing's most important customer.
Dave Stein: How can the latest innovations in marketing automation technology help sales?
Brian Reilly: Marketing automation, especially in the B2B space, has come a long way in the last decade. During that time we have seen sales force automation offered in an SaaS (software-as-a-service, a great example of which is Salesforce.com) environment experience tremendous adoption across verticals. Best-in-class sales teams are managing their process automation and pipeline reporting through these tools to the great benefit of their companies.
Marketing organizations have not been as lucky. While sales has mastered their process on top of a solid tools foundation, marketing has traditionally been forced to work with a set of disparate tools that often don't talk to each other. Add to this the ever-expanding nature of marketing as additional channels are being added quarterly, if not more often. Marketers must balance inbound channel spend against outbound channel spend and often rely on a patchwork of vendors-email, direct mail, website and others-to keep their demand generation machine running. With the rapid evolution of SaaS marketing automation technology over the last 6-7 years, marketers are now starting to adopt a set of interconnected tools which excel at creating high-quality demand for sales.
Eloqua (an SaaS marketing automation provider) regularly cites statistics that show their customers experience big leaps in demand generation as a result of their tool. Their contention is that, starting at the top of the funnel, leads are being more fully qualified before being passed to sales which results in conversion rate lift of 10-20% as a result. This, of course, has positive downstream impacts as "won" opportunity rates and value are higher for leads generated and qualified using marketing automation tools and processes. Eloqua, as an example, has even created an "RPM index" which measures the performance of companies who have adopted a revenue performance index tool, specifically Eloqua, against those who have not. This index shows that companies who have put significant efforts into marketing automation best practices grow at faster rates than those who do not.
DS: Why should marketing's mastery of marketing automation and Revenue Performance Management (RPM) matter to sales executives?
BR: Revenue Performance Management represents a scientific approach to marketing-the combination of inbound and outbound activities that are required to produce, score and nurture high quality leads. Better leads enable sales to win high-value opportunities more efficiently. According to Forrester, companies that excel at nurturing leads not ready to purchase generate 50% more sales ready leads at 33% lower cost.
RPM was coined by Eloqua in 2010 to move the definition of the "marketing automation" away from something very tools-centric. Tools are tools. "RPM" captures the combination of tools, processes and people that it takes to generate more revenue more efficiently. It focuses on the varied set of skills that it takes to do that-sales and marketing alignment, customer-centric program development, and insightful analytics. Sales tools alone cannot do these things-even Salesforce.com has its limitations. Salesforce.com is excellent at catching leads and providing a foundation for a world-class inside and field sales process but it is not the place to go to generate those leads. Marketers need to build their process around a set of tools which includes outbound vehicles like email, direct mail, text and phone. They also need to manage the inbound assets like landing pages, whitepapers and case studies.
It takes this combination of sales and marketing platforms-sales force automation combined with marketing automation-to create a revenue performance machine.
DS: ESR would add sales process automation as a requirement these days... In any case, what responsibility does sales have for RPM?
BR: Revenue performance management in a high-consideration, B2B context does not work unless sales is on-board with the strategy. Marketing can invest all the money in their budgets on tools, process and hard-to-find people in order to create a revenue performance machine but that money will be fundamentally wasted unless they have the buy-in of sales management. Someone has to agree to catch and validate the high quality leads that marketing has worked so hard to produce.
Now, we all know that sales does not want to waste an inordinate amount of time chasing down poor quality leads.
DS: Or any time at all...
BR: Right. There are just not enough hours in the day to waste on unqualified "mickey mouse" leads. According to Forrester Research, 25% of marketers who adopt lead management processes report that sales teams contact prospects within one day. Only 10% of marketers report the same follow-up without mature lead management processes. That's why the Sirius Decisions funnel definitions have become so popular over the last couple of years-because they work. Sirius Decisions has provided a well-defined set of lead stages for sales and marketing to agree upon and implement. If sales leadership wants to get the true value of RPM, it has an obligation to create this type of foundation for sales and marketing alignment.
Once aligned, collaborative sales and marketing teams will begin to see the impact that mastery of RPM has on the top of the funnel. If done correctly, sales will only have to deal with the hottest high quality leads. When this happens, they can begin to turn to increasing the velocity at which leads and deals move through the funnel. Once the fundamentals are sound, sales and marketing can work on globalizing (if relevant) and optimizing the processes.
DS: What does it take to succeed at RPM?
BR: First the bad news: 50% of respondents to a 2011 Focus survey stated they have not realized the full value of their marketing automation investment, and less than 25% use their platforms to their full potential.
BR: Regretfully, yes. Now, the good news: marketing automation in the cloud is easier than it was a decade ago but it's still not exactly "easy." It takes an executive team that has bought into the possibilities that marketing automation technology and the overarching concepts of RPM present. RPM requires both a top-down and bottom-up approach to system adoption. The executive team has to agree that they will manage their process through these tools while the field sales and marketing team must agree to leverage these tools.
Mastering RPM also requires creating an operational team to support the effort by creating processes for implementing new campaigns and creating reusable content. Content is critical to making RPM work because content is what keeps both prospects and existing customers engaged. Campaigns are heavily dependent on having content available to keep your product or service top-of-mind at critical points in the buyer's journey. Customers are often researching their buying decisions independent of sales and it's 1:1 campaigns supported by valuable content that moves them from awareness to purchase..
Additionally, executives in the sales and marketing organizations must agree upon standard metrics definitions in order to make RPM successful. By standardizing on a set of metrics and by defining how data is collected and calculated, organizations create a foundation on which measurements can be compared over time, across business units and around the globe.
DS: What kind of lift do organizations experience that invest in RPM?
BR: As I mentioned above, Eloqua has created their "RPM Index" to try to better understand the impact of an RPM approach (not just tools) on an organization. Similarly, Marketo, an Eloqua competitor, has created an "RPM Quotient"-their metric for benchmarking success through the use of their tool. Marketo cites impressive numbers when discussing the impact of their tool on their customer's business-a nearly 50% increase in campaign effectiveness, a 17% increase in sales wins and an 11% increase in contract value.
Marketo is telling a story similar to Eloqua's: using best-in-class marketing automation tools as the foundation for the revenue performance management strategy, innovative companies consistently demonstrate a significant increase in revenue (~25% in the first 12 months). Forrester's research supports this assertion: 46% of marketers with mature lead management processes facilitated by marketing automation have sales teams that follow up on more than 75% of marketing-generated leads.
From all of the research that's been done, it's clear that RPM works when properly implemented. RPM really is just the next generation of CRM best practices that have evolved over the course of the last two decades. What started as sales force and call center automation has grown to encompass both offline and online marketing. With the advent of SaaS vendors like Eloqua, Marketo and Pardot, RPM has become far more accessible for cost-conscious companies outside of the Fortune 1000. The rise of service companies like Solerte, created to support and nurture best practices, gives companies outside of the Fortune 1000 the ability to experience the positive impact of world-class revenue performance management.
Brian Reilly has over 15 years of CRM consulting experience and has worked on both the client- and the agency/consulting-side. Over the course of his career, Brian's been successful at growing professional services organizations focused on marketing automation, CRM and ERP over the course of the last decade.