The Characteristics of Revenue Generating Companies

In the last year the aspect of revenue, as it relates to marketing departments, has taken center stage.  Both Eloqua and Marketo are at the forefront of the Marketing Automation space discussing Revenue Performance Management.  These two companies along with others have appointed Chief Revenue Officers and some have resorted to creating a new type of marketer dubbed “The Revenue Marketer.”

Over the past few weeks I have had several opportunities to discuss this phenomenon with my friend and respected colleague Craig Rosenberg, a.k.a The Funnelholic.  During the conversations we have tried to answer questions like:

– Does revenue really emanate from marketing?

– Is the CRO really a legitimate role in organizations or is this really a COO with a different title? Or as David Brock has said: “Isn’t this the CEO’s job?”

– Hasn’t sales always been about revenue and is this new obsession with it just marketing’s awakening to the fact that they should also be focused on measuring themselves by the revenue yard stick?

The very fact that this is what we discuss when we are together or on the phone, makes us in our own right “marketing nerds” and while we do not have all the answers to these questions, we do know and agree on one thing – corporations exist to generate revenue.  While this is the foundation upon which all for-profit organizations are founded, we do not believe that all organizations are necessarily “Revenue Focused Organizations” (there is another acronym for the B2B space “RFO” – don’t try it we already have it trademarked).  So to better define what these organizations looks like, here are Craig’s and  my characteristics of RFO’s

1.  The Customer is the Focal Point

Hidalgo: For all of the work that has been done on getting marketing and sales aligned, it’s a wonder that the issue still exists. As a matter of fact, we would submit that the gap between the two is more apparent than ever.  However, revenue focused companies understand one thing: alignment is not just about marketing and sales. It’s about the entire organization uniting (forget aligning) to deliver true customer value at every buying stage.  This includes marketing, sales, customer support, product development, IT etc.  All of these organizations have their place in customer engagement which turns into revenue.

Rosenberg: This sounds so obvious but it isn’t.  The fact is we SHOULDN’T have to write about this, but we do because we need it.  In the last 3 years, we have learned a ton about the buyer and frankly exposed serious flaws with how we are running our businesses.    Again, from David Brock, start with the customer and work backwards against all areas of the organization. There is a great case study with Motorola where the customer became the organization’s purpose statement.  To get there, they understood everything about the customer and brought that understanding to EVERYONE.  Not just marketing, but everyone.

2.  Marketing Enables

Hidalgo: There is no doubt that the role of the B2B marketer has changed dramatically over the past several years.  As a result, many have sought to put marketing front and center in revenue creation. That’s not where they should be as this in effect supplants the role of sales.  Revenue Focused Organizations understand that rather than generating, marketing enables revenue.  While we may be splitting hairs here there truly is a difference.

How does marketing enable?

  • They generate and deliver engaging and relevant content to the buyer
  • They deliver content to sales that they can use to help propel deals through the pipeline
  • They focus on delivering highly qualified leads to sales (based on a common definition and lead qualification process), thus increasing sales effectiveness
  • They measure their impact and make adjustments where necessary
  • They are marketing, engaging and nurturing at every stage of the buying process or sales funnel

When marketing supports the creation of revenue, it is an internal state of Nirvana

3.  They Know Where They Play

Hidalgo: Companies that are Revenue Focused Organizations know what segment of the market in which they play and do not pretend to be something they are not.

Every single employee/team member in the Revenue Focused Organization can tell you who their customer is.

Hidalgo: In Sales: They are not afraid to walk away from a deal if they know they are not a fit.  Why?  Because trying to put the proverbial square peg in a round hole deviates from producing revenue. If you win the “wrong” deal will, in most cases, be a losing proposition.

Rosenberg: In Marketing: They focus on building their programs against their target. In Product Marketing: They don’t chase either. They are maniacally focused on building product to support the needs of their target.

Knowing where you play and staying true to your product or service delivery goes hand-in-hand with understanding your customer.

4.  They Are Maniacal About Measurement

Hidalgo: Companies who are revenue focused measure and measure the right things.  There is such a thing as going overboard on measurement.  Here is a good rule of thumb – if no one is going to use the data from your organizational metrics to help shape the future direction of your company, don’t measure it.

Rosenberg: Companies that are Revenue Focused Organizations measure what counts and pull the intelligence from those measurements to help define what’s next, what changes need to be made and what should continue.  It’s actually harder for the disjointed, unfocused organization to do this.  The lack of the singular goal of revenue prevents organization from creating truly transparent measurement and reporting.  Everyone’s silo is doing their own thing and looking to cover their butts.  The Revenue Focused Organization works backwards from revenue and creates the metrics that get them there.  If you’re not doing it already, now is a good time to start.


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