Throughout the history of marketing, it has been difficult to measure marketing’s performance as it relates to revenue contribution. Everyone knew that marketing did something to affect the business, but the processes and technology just weren’t there to measure it. This problem trickled down to performance and compensation for the marketing team itself; how do you manage what you can’t measure?
In just the last few years, the principles of Revenue Marketing™ have begun to take hold in companies large and small, such as defined lead management processes, closed-loop analytics and robust technology platforms. Marketing can no longer rely on simply generating ad campaigns or “blasting” out emails…it is expected that marketing be not only measured on, but held to, a revenue/pipeline amount.
This dramatic shift necessarily trickles down to those responsible for marketing: now that marketing’s contribution can be quantified, so can the members of those marketing teams. Marketers who for years have been measured and compensated on “vanity metrics” or vague MBOs like pageviews, number of emails opened, or campaigns created…you have officially been put on notice.
Marketers will now be held to metrics that matter, such as how many sales-ready leads they provide to the sales team, their influence on the opportunity pipeline, and most important of all, their quantifiable impact on revenue.
I’m not saying that the aforementioned, marketing-specific metrics don’t matter, but they shouldn’t be the ultimate objective for marketers. They should be viewed instead as a collection of data points to improve processes and campaigns to generate leads and opportunities. Nor should marketing team members “carry a bag” and have a full-on quota, but since those practicing Revenue Marketing are having a greater effect on “Closed Won” business, their success and failure in those efforts should be reflected in how they are compensated.
How does this affect your organization? If you’re a marketing leader and you want to truly make the marketing team adopt Revenue Marketing, shift your team’s objectives (and eventually, compensation) to metrics that matter. If you are a marketer and you’re not currently compensated on these metrics, take the initiative and ask your boss to consider it. The shift to Revenue Marketing is happening right now, and leaders (and those who want to be) who understand and act will have the advantage over their competition.