Advancing The Revenue Revolution: Why You Need Revenue Performance Management

Here’s something to think about: Even though many publicly-traded companies have been reporting decent earnings during the past couple of quarters, their performance didn’t translate into a much higher stock value.  Despite successful cost reductions that improved the bottom line, and in several cases resulted in attractive profits, Wall Street turned its attention on the top line, demanding to see more progress on revenue performance.

This certainly isn’t an earth shattering call-to-action for CEOs. For the past three years revenue growth has been the main objective of CEOs according to Frost & Sullivan’s annual 2009 CEO Survey. But what is interesting is how they are going about it, with the largest proportion of CEOs selecting increasing sales as their number one strategy to achieve their growth goals. This caught my attention, not because I disagree, but because increasing sales is a goal rather than a strategy. The real strategy is how they are going to do it.

From the survey, respondents selected a myriad of textbook strategies to achieve their growth goals, including strategic partnerships, customer strategies, new product development and expansion into new markets. But something critical was missing: what did not make the list is a focus on improving their current sales and marketing effectiveness to improve revenue performance. Perhaps it is a reason why this same group of CEOs indicated they have less confidence in their organizations’ ability to conduct core growth strategies.

The Revenue Performance Management Imperative

To improve revenue performance, organizations essentially have two options. First, they can hire more high-performing salespeople. This approach doesn’t come without risks, requiring additional investments and human capital that will increase expenditures and put pressure on the bottom line, especially in the short term.  The second option, and where I see the largest opportunity, is to transform their current sales and marketing processes to improve both effectiveness (increase revenue) and efficiency (reduce costs) across the revenue cycle.

We call this second strategy Revenue Performance Management, and it’s the inspiration for this new blog.

Revenue Performance Management is a strategy that enables companies to optimize their interactions with buyers in today’s marketplace to drive predictable revenue growth. It enables companies to break down the silos to improve marketing and sales efficiency and effectiveness across their revenue cycle. And from a technology standpoint, it fulfills the promise of customer relationship management and marketing automation with an integrated system where sales and marketing are synchronized to accelerate growth, beginning when a prospect is first encountered and extending it throughout the customer’s lifetime with the organization.

We started this conversation more than two years ago when Marketo took a bold step to elevate the industry focus above marketing basics to what really matters at the end of the day – revenue.  In July 2008, we declared a Revenue Revolution to unite marketing and sales to ignite growth and drive revenue.  We encouraged companies to become more functional revenue organizations by aligning marketing and sales to look beyond the sales cycle and towards the entire revenue ecosystem.  We continue this revolution as we evolve beyond marketing automation to Revenue Performance Management — the single largest opportunity for leading companies to streamline the buying process and improve revenue growth.

As CEO, I am motivated to write about the issues company leaders face when working to improve revenue performance.  I face them as well. So my goal, with your help and participation, is to advance the Revenue Revolution with this blog, where we will further examine how companies are managing their revenue performance in today’s marketplace; identify defects and solutions in current models; and share best practices for driving predictable revenue.  Viva la revenue revolution!