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Last week I had the pleasure of teaching an MBA class at the College of William and Mary in the Mason School of Business.  This is the fourth year I’ve been invited to teach a class on Revenue Marketing™ at this institution.  First, I want to give BIG KUDOS to Ron Ness and LD Metcalfe for their vision in adding this topic to the MBA curriculum and for having a specific B2B track at all.  Second, I want to lament the state of higher education for how slow they are to add B2B and Revenue Marketing to the executive track curriculum.

Kudos

I first met Professor Ness when his MBA class visited my prior company to see how a company does B2B marketing in the real world.  At that time, I was already a Revenue Marketer™ (I was using Eloqua and Salesforce), and he was so impressed with what they learned that he invited me to speak to subsequent classes.

The Mason School has now added to their curriculum a track just for B2B marketing within their MBA program.  I think this is wonderful, since so few schools offer this.  I am in a PhD program and recently had to take a marketing course.  Guess what?  It was all B2C, with only a few pages dedicated to B2B marketing in each of the four different texts.

These observations (plus more) bring up the key question:  Who is educating and training B2B marketers?  And, how do they learn to be Revenue Marketers?  Very little is happening at the graduate and under-graduate levels, so the primary responsibility for this education falls to companies.  And companies themselves offer very little formal education – it’s more about learning ‘on the job’.

Lambasting the College Curriculum

While B2B marketing is beginning to show up in some curriculums, it is still largely included as a simple footnote across all marketing, both at the graduate and undergraduate levels.  Let me give you a practical example: as I teach in the Mason School of Business, every year I see a group of bright, talented and eager business people in the making, but they have huge holes in their practical knowledge.  They have limited exposure and knowledge around the role of technology in marketing and how marketing is now playing a distinct role in driving B2B revenue.  Both technology and marketing-driven revenue are changing the role of marketing leadership (IBM, 2011) in companies, yet this remains a fuzzy concept, at best, for these students. Where is the leadership and innovation in the classroom, to mirror the changes that are happening in the real world?

Beyond the Classroom

Education is largely an unrecognized issue in Revenue Marketing (and B2B marketing in general) that is costly in terms of time, efficiency, and impact on revenue.  I’m often surprised at how many marketing executives buy into the Revenue Marketing strategy, yet do not realize what it takes to enable their teams to be successful.  They don’t fully understand the need to commit time, money, and resources for education, training, and best practices.  Yes, you can get training on how to run a marketing automation system, and many vendors do this for free.  Yes, you can get email/lead generation/demand generation best practices, and many vendors also do this for free.  While this is all excellent information, it is being consumed and used in an ad hoc manner across organizations.  It does not take into account each unique and dynamic business environment or, more importantly, provide one holistic set of standards for a company.

As companies begin the Revenue Marketing Journey™, taking an unplanned approach to education and training will be insufficient.  More companies are realizing the magnitude of change and what is required to fully enable a Revenue Marketing practice, as this market rapidly matures.  They are beginning to look at more comprehensive education, training, and best practices plans.  For example, I am currently working with two different organizations to provide Revenue Marketing fundamentals through bootcamps, games, and live and recorded training sessions.  For one, we even developed a Revenue Marketing certification program.  I see a lot more companies embracing this approach in the future.

Education, training, and best practices are essential to enabling the switch to Revenue Marketing.  Companies who understand and take this approach, and dedicate the necessary resources, will be ahead of the competition.

Linking the Two

As an executive responsible for changing the role of marketing in revenue, you will only be as good as your team and their skills and competencies.  If you can’t get B2B Marketing and Revenue Marketing 101 taught in school, it’s up to you to pull it all together.  Investing in this knowledge base is your ticket to success.

Today’s B2B CMO is facing a watershed moment – find a way to drive repeatable, predictable and scalable revenue or move on to another career.  The evidence is mounting on how smart B2B marketing executives are connecting to revenue, transforming marketing from a cost to a revenue center, and in the process, helping their organizations outgrow their competition.

Transforming marketing from a cost center to a revenue center is what we call Revenue Marketing™ and it is a very fast-growing segment of our industry.  In this technology driven market, CMO’s no longer have the luxury of ignoring their direct role in revenue and as they move into this new position, different relationships  must be forged.  One such key relationship is the CFO/CMO connection.

Here are three key things you should know to foster the CMO/CFO relationship:

It’s Real!

Yes, I see organizations in which the CFO and the CMO actually have a tangible working relationship – a sure sign marketing is on the Revenue Marketing Journey. For years, the CFO has been frustrated by the inability of marketing to show an ROI on any of the very substantial investments in marketing.  In many companies, it has been the one department that did not have to show financial return or justify spend based on return.  There wasn’t much of a relationship except when setting the annual budget.  Since marketing  was viewed as a cost center, the CFO was interested only in assuring that marketing spent within its budget.  This didn’t create a collaborative working relationship.

Today, using marketing automation tools integrated with CRM and driven by Revenue Marketing processes, marketing is not only showing an ROI, but can also forecast its impact on revenue.  It’s sweet music to the CFO’s spreadsheet to see marketing calculate what another dollar invested in marketing will mean to revenue.  This relatively new phenomenon begins with marketing taking on revenue accountability.  In this new role, the CMO works closely with the CFO on ROI calculations and business impact of marketing.

Big Challenges

For a company focused on traditional marketing and not revenue marketing, the issues between the CFO and CMO will always be financial ones.  This is of particular importance when the company is not doing well and budget trimming begins.  Marketing is typically one of the first items to go.  A second issue is that the CFO and the CMO speak two different languages, as a traditional marketer is not focused on ROI or revenue.   The CFO speaks the language of business – costs, revenues, bookings, and forecasts.  A traditional marketer is speaking the language of creative, impressions and traffic.  Classic collision.  When a marketing organization is focused on Revenue Marketing, you will find the CMO and the CFO speaking the same language.

Relationship Advice

First, make sure that Revenue Marketing is right for you.  If this is a journey you need to take (meaning you are ready to assume revenue and ROI accountability), work with your CFO to help you.  Once the initial shock is over that you actually want to talk and gain financial help and guidance, the CFO should be an invaluable source of help in transforming marketing from a cost center to a revenue center.  You might even find him/her to be flattered and happy you are asking for help.

Second, speak the language of leadership and business – and make sure you understand your business!  No one cares, especially the C suite, about the colors of the website.  As a peer, work with your CFO to make better business decisions and to enable marketing to make a true business impact on the company.  Come into meetings prepared to discuss the role that marketing can play on revenue, with clear suggestions of where and how it can be done.

Third, run marketing based on the numbers, just like every other division in your company.  Begin every presentation to senior management with metrics:  # of MQLs, % conversion to opportunity and close, % and $$ contribution to pipeline from marketing sourced leads, and % and $$ contribution to closed business.  Setting up this review cadence will help you maintain a financial focus and the senior management team will be forced to view you in a different light.  As a Revenue Marketer, you must not only deliver the results, but also educate the executives along the way.  No one will be happier about this than the CFO.

For Revenue Marketers, strategy to execution is the process of moving from  “Wow, this Revenue Marketing stuff is what we need and where we need to be!”, to “How in the heck am I going to make this happen?”, and then to “Wow, we’re Revenue Marketers!”  Some marketing executives refer to this as operationalizing the strategy; others refer to it as making and executing Playbooks.  Whatever language you use, the process is the same and requires a careful balance of vision, change management, and outstanding execution skills.

On October 17^th, we ran a Revenue Marketing University session entitled “Strategy to Execution” and explored this topic more thoroughly.  In that session, I identified what I called an “Accidental Revenue Marketer”, meaning someone who does not have a medium-to-long-term plan on how to take this journey.  Reflecting on that led me to the “Intentional Revenue Marketer”, meaning someone who has an identified place to be and a detailed plan on how to get there.  The “Intentional” marketers  are the ones who are excelling at Strategy to Execution.

Here are three secrets to success that are common to all Intentional Marketers:

Strategy to Execution begins with a ROADMAP

In the webinar, I called marketers beginning the Revenue Marketing Journey and not having a plan “Accidental Revenue Marketers”.  They don’t typically get where they need to go because they have no roadmap.  Choosing to become a Revenue Marketing organization requires a multi-year plan and uses quarterly milestones that are reportable to senior management.  There is a fast and easy way to approach building the plan using the RM6 as a model, and there is the more holistic and transformative way to build the roadmap that encompasses:

• Executive re-education on the revenue value that marketing can drive
• Gap assessment of the required Revenue Marketing capabilities, structure, and compensation models
• Financial model of what this costs and what and when the returns will be delivered
• A multi-year Revenue Marketing Roadmap

 Strategy to Execution is characterized by QUICK WINS

Just because it takes time (more than one year) to be fully realized as a Revenue Marketer does not mean you cannot have quick wins along the way.  In building any Revenue Marketing Roadmap, you need to have a Quick Wins focus.  Quick Wins do several things:

1. Provide visible, tangible financial returns
2. Help cross-functions gain first hand experience in the power of Revenue Marketing
3. Set expectations that this is a Journey, not a sprint, and that simply buying software is not the answer

Strategy to Execution must be VISIBLE

So often when marketing begins something new, it is viewed as a project.  Transforming from a cost center to a revenue center (Revenue Marketing) is more than a project, it is also a strategic initiative that takes time.  Compare it to transforming a sales organization from a group of order takers to a group of solution providers – the change is massive.  In this context, visibility and constant communication around KPIs to senior management is critical.  One company I know began a journey of transformation about a year ago.   In every North American senior management quarterly committee meeting, the marketing journey is a topic.  This visibility into how the journey is going helps the company understand that marketing is transforming, delivering value and meeting the pre-established KPI’s.  Without this level of visibility and interaction among senior executives, your Revenue Marketing journey can easily lose steam and that all-important advocacy.

Over the last few years, we’ve seen the initial reactions of marketing leaders as Revenue Marketing has emerged as a requirement of marketing.  What we are seeing now is just how challenging it can be to take a good idea, a necessary idea,

and execute it while keeping the company on-board throughout the process.  It can be done, and in fact, we see companies of all different sizes and across all industries doing it well.  They are what I would call Intentional Revenue Marketers.

Which are you – an Accidental or Intentional Revenue Marketer?

One of the consistent themes I heard from the 22 executives I interviewed for Rise of the Revenue Marketer was the idea of marketing and organizational readiness for revenue marketing, meaning that not every company is ready to begin this journey. At first blush, the idea of Revenue Marketing makes sense for a lot of marketing executives.  Given the continuous pressure to show ROI and to demonstrate revenue accountability, I find that most marketing leaders range from “interested” to “let’s get this party started” when I talk about Revenue Marketing.  At the same time, I also see too many situations where a senior manager or the VP of marketing buys marketing automation and then runs into the “no change here” buzz saw of the organization.  In this case, taking the Revenue Marketing Journey is like swimming through peanut butter.

So, I’ve been thinking – what are the organizational predictors of success for revenue marketing?  What are the organizational conditions that can help predict if the journey will take place and, if so, how fast and how successfully?  How can we identify these conditions and how can we change these conditions?

My first answer came as part of a research project I was doing in my PhD program.  My dissertation topic is the influence of marketing automation systems on ROI and the role of the CMO in B2B companies.  A piece of research from Trainor, Rapp, Beitelspacher, and Schillewaert (2008) researched the drivers and outcomes of an e-Marketing capability.  In this case, e-Marketing was defined as the “integration of complementary technology, business and human resources that when combined, positively impact firm performance” (p. 1). The researchers constructed a model with two capabilities that indicate readiness to begin and be successful at e-Marketing and one major moderating influence.  Let’s look at this model and we’ll adapt it to create a revenue marketing readiness model.

Capability #1:  The company has a market orientation.

Market orientation refers to a firm’s capability to sense and respond to customer requirements.  Successful firms have the ability to diagnose current capabilities, anticipate new capabilities, and redesign processes to support new ones.  In this model, resources are continuously reconfigured and bundled together to create new capabilities.

Implications for Revenue Marketing Readiness

Revenue Marketing requires new capabilities and new process design.  Here is an example of one such new capability required in Revenue Marketing and key outcomes:

• Lead Management Capability is the ability of marketing and sales to jointly engage and interact with a lead at all stages of the marketing and sales funnel, with the focus on nudging that lead along the Buyer’s Journey to closed/won.  Customers are 60-70% through the Buyer’s Journey before sales is involved.  It is up to marketing to digitally engage this customer and this is core to a Lead Management capability.
  • Outcome we see:  Marketing provides leads to sales that are marketing-qualified and at least 70% of these leads convert to opportunities in the sales pipeline.
  • Outcome we see:  Marketing nurtures leads that turn into MQLs and these leads have a higher average deal size than leads from other sources.

Other new capabilities for Revenue Marketers are measurement and analysis, business modeling and planning, funnel management, change management, content marketing, campaign ROI, technology management, and sales enablement.

Capability #2:  The company has a technology orientation.

A technology orientation represents a firm’s ability in recognizing and adapting to emerging technologies.  Companies with a technology orientation foster commitment to the application of new technology to help solve business problems.

Implications for Revenue Marketing Readiness

Revenue Marketing is only a category of marketing because of technology and how it has changed how buyers buy and how companies respond.  We live and work in a digital age and Revenue Marketing is about that digital dialogue that builds value for the customer and for the company.  The use of technology is core to Revenue Marketing success.  I can walk into a company and look at how they are currently using technology and can pretty much predict how this company’s Revenue Marketing Journey will go.  For example, if I walk into a company that does not have CRM or uses CRM at a minimal level, these are conditions that predict a long and slow Revenue Marketing Journey.  If I walk into a company that is optimizing use of CRM and other systems as well, these are conditions for success, as this is a company that understands the role of technology in improving its business.

The Moderating Influence:  Competitive Landscape

A firm’s ability to adapt to the competitive environment depends on the deployment of resources and capabilities and, depending on the market, can be something that is always in a state of flux.  Companies with a successful e-Marketing orientation are very, very good at adapting to the competitive environment.

Implications for Revenue Marketing Readiness

As little as two years ago, having a marketing automation system and engaging in Revenue Marketing by digitally interacting with prospects and sending these highly qualified leads to sales would have given a company a real competitive advantage.  We have even worked with companies who asked us not to work with their competitors for six months so they could gain a market advantage.  That day is gone.  Now, having a Revenue Marketing practice is table stakes because all of your competitors have jumped into the game and are doing the same thing.  This is especially true in business services, technology, and financial services, and is fast becoming the norm in healthcare and manufacturing.

While this was a pretty long post I hope it provided some insights to help you assess if your company is really ready for Revenue Marketing.  Not all firms are, and in this case, it can be a long, hard battle for the CMO.

Reference:

Trainor, K., Rapp, A., Beitlspacher, L., & Schillewaert (2008).  Integrating information technology and marketing: An examination of the drivers and outcomes of e-Marketing capability.  Industrial Marketing Management, 40, pp. 162-174.