My first take on RPM, okay my second take but who is counting?

Note to self: This is my first post on Revenue Performance Management (RPM) (and my first post in awhile).

Usually, when I write, I can just sit down and crank out a post. For whatever reason, organizing my feelings on RPM has been hard. That changed, after I sat on a panel on Revenue Performance Management (RPM) at Dreamforce with Bill Binch from Marketo and Jamie Mallinger from Athena Health. It was really a great presentation (embedded below) and by the way, I DON’T mean my part – I mean Jamie and Bill’s. We actually did it twice to packed houses which was fun and exhilarating, but the main reason I mention the preso: it helped me get my hands around some of my feelings on the topic. I was all over the place with RPM, and when I got to work with Jamie and Bill, I was able to simplify everything in my mind. That is not to say executing is simple, but wrapping your hands around the concept is easier for me and maybe I can help here

Funnelholic Definition:
Revenue Performance Management – a process for managing, tracking and optimizing revenue from “start-to-finish”. The start could be awareness and the finish could be cross-sells/up-sells depending on your business model.

4 major, but simple building blocks to RPM:
1. A picture – You have mapped a cohesive step-by-step “demand chain” ala a supply chain that is mapped from interest (marketing) to well past close (sales). Each step of the way has a defined business rule to advance to the next step. Everyone agrees to this picture aka process.
2. Better leads — You will send sales leads that they agree to accept and convert. (Fail on this, and you are cooked. Sorry). If they work, you will send more. If they don’t, you understand where everything is developed now that you have a solid picture of the process so you figure out how to fix it. “Better leads” sounds tactical but part of what you build when you build the demand chain is process such as scoring, nurturing, and inside sales/sales development to ensure that sales is working on qualified leads.
3. Metrics — You have metrics that map to your steps of your “demand chain” that you can tune to drive revenue.
4. Someone or some entity to look at everything and help make decisions – That is complicated and a whole ‘nother blog post but you either need a Chief Revenue Office/Officer or someone close to the CEO/President who can call out what is happening and help drive better decision-making

Impediments to Success:

1. Politics – plain and simple. Do you know how many people came up to me with the comment “this is great but there is no way I can get this done because of the people involved”. There has to be a commitment from the key stakeholders in the organization that they want to do this.
2. Politics Part II, the sales leader – Truthfully, sales doesn’t care about sales and marketing alignment nor are they very interested in a movement that usurps their power. Keep this in mind as we start to head down this road. This movement is being driven by marketing and in particular, RPM vendors (formerly known as marketing automation vendors). Again, if you have been in a b2b marketing organization, then you know the guy who rules the roost is an 800 pound gorilla named the head of sales.
3. There is more to revenue than demand gen and sales – Product, service and all those factors play into revenue success. I realize that. But for now, it’s a BIG step to merge the sales and marketing process and let’s just start with that.

Politics can be a mess here, and I wonder aloud whether for the near-term solution is drop the “management” part of RPM and for now, call it RPM – Revenue Performance Mentality. The most important thing to do here is to educate and get organizations on board from a mentality perspective. Then everything else will come into place including technology.(first mention) Realizing there are still some flaws, can you really say that from an organizational standpoint that you wouldn’t want a fully optimized, predictable revenue machine?

Let me go over the benefits:

1. Predictability – the well-oiled Revenue Performance Machine knows when they put more “in the top” what will come out the “bottom”. That is empowering for an organization.
2. Optimization – the ability to really fix holes is one of my favorite part of having visibility into the entire revenue process. Instead of saying “close more f-in business” to sales or “get me more leads” to marketing, we can objectively look at the breakdown and make good decisions that truly effect revenue downstream.
3. More money

The “demand chain” is the last part of the b2b organization that has yet to be streamlined and optimized. Manufacturing companies understand their supply chain from materials to delivery in stores. Why can’t we do the same for demand?

PS Steve Gershik — I didn’t say marketing automation except to reference vendors.  I don’t think i have to drink.

[slideshare id=9062434&w=465&h=387&sc=no]

Craig Rosenberg is the Funnelholic. He loves sales, marketing, and things that drive revenue. Follow him on Google+ or Twitter

  • http://www.findnewcustomers.com Jeff Ogden

    Why oh why do people post Slideshare’s without audio? Seems a waste to me.

    http://www.slideshare.net/jefflogden59/power-of-lead-nurturingv2

  • Tyla

    Saw your presentation at Dreamforce, thought it was great!

    Two questions:
    1) Can you provide the statistics that are on slide 3? (They are overlapping on this presentation and not possible to read.)

    2) During the live presentation, on the “Right Metrics” section (slide 23ish) there was a graphic about tactical vs strategic metrics. It’s not in the presentation above and I’d love to share it with my team.

    Thanks and keep up the good work!

  • http://www.theinnovativemarketer.com Steve Gershik

    It was a great session you moderated at Dreamforce, Craig. You’re the Dick Cavett (http://bit.ly/fbUv) of the B2B world.

    However, I believe you invoked rule 10 of the Marketing Automation Drinking Game enough to keep you from getting behind the wheel of a car for some time. http://www.focus.com/posts/marketing-automation-drinking-game/

  • editor

    Tyla:

    I am working on getting the answers to your questions as we speak.