After reading the title of this blog post, you might be asking yourself, “Isn’t all marketing today revenue marketing?” With the transformation of marketing in recent years to a department that is focused on revenue generation, it’s easy to come to that conclusion. But true revenue marketing is less common than one might think.
What is Revenue Marketing?
Revenue marketing isn’t a destination you simply arrive at by acknowledging that marketing must be committed to contributing to revenue, rather it is one you must precisely map your journey to. There are also varying degrees of marketing maturity and sophistication along the way:
Traditional Marketing – Focused on brand building and impressions; marketing is a cost center.
Lead Generation – Focused on maximizing the leads brought in for sales; marketing is a cost center.
Demand Generation – Focus is on bringing in high-quality, sales-ready leads; marketing is both a cost and revenue center.
Revenue Marketing – Focus is on generating revenue that is repeatable, predictable and scalable; marketing is a revenue center.
Marketing teams that reach the revenue marketing phase have developed repeatable prospecting programs that drive customer acquisition and measurable sales. Measuring ROI is at the core of revenue marketing. In order to ensure that the revenue generated is repeatable, predictable and scalable, marketers need to accurately measure all aspects of their performance and reliably forecast the results and impact of their efforts. Only then is true revenue marketing attained.
With its focus on ROI, revenue marketing can help marketers answer some questions that are critical to success:
- What percentage of revenue should be spent on marketing?
- What effective marketing strategies should we be investing in?
- What ineffective marketing campaigns and initiatives should we eliminate?
The ability to answer and act on these questions with confidence is what gives revenue marketers the edge and can mean the difference between an organization moving ahead or falling behind.
Why is Revenue Marketing So Important Today?
When contemplating why revenue marketing matters today, let’s consider these stats from Heinz Marketing:
• 53% of marketers can’t measure or are unsure of their ROI
• 67% of B2B marketers are accountable for revenue performance or contribution
These two stats tell a story of marketers who are increasingly held accountable for revenue contribution while many are still unable to accurately report on ROI. The revenue performance expectation is a massive shift from traditional marketing, and accurate ROI reporting is at the core of successfully making this transition. What this tells us is that the gap between traditional marketing and revenue marketing continues to widen, and traditional marketers will soon be left behind.
What has brought marketing to this point? While it is a combination of considerations ranging from changes in buyer behaviors to sales and marketing alignment to marketing increasingly earning a seat at the executive table, one factor often stands out from the rest – technology.
Marketing technology, or MarTech, has proliferated in recent years. There are now more than 7,000 marketing technologies on the market and CMO technology budgets now outpace those of CTOs. But with the ability to do more with marketing technologies and overcome common marketing challenges, the expectations for realizing ROI on those technology investments are higher than ever. The technology has evolved to accommodate more sophisticated marketing, now marketers must do the same.