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What is Revenue Performance Management?

2012 June 22
by Tom Watson

You may have begun seeing this new acronym being used in marketing blogs, articles and websites in the last year or so: “RPM”, or “revenue performance management”. Simply put, it is a way of maximizing your company’s revenue. Currently there are about as many variations of the definition as there are pundits.

In May, Marketo published their definition of RPM in an infographic. It states: “RPM is a strategy to optimize interactions with buyers across the revenue cycle and accelerate predictable revenue growth.” The infographic expounds on that further in fanciful but fairly accurate terms, illustrating the frustrations with the hard-to-quantify results of traditional marketing vs the highly quantifiable sales results. It rightly points out that when RPM principles are applied, marketing results become far more quantifiable, and bring better quality leads to sales. This not only reduces inter-departmental finger-pointing, but increases sales efficiency and sales results.This is a good description of RPM, but in my view skips over an important aspect: strategy and planning.

Their newest infographic provides a new spin on the definition of RPM: “…a revolutionary way of setting up your business to achieve maximum revenue. It involves your marketing and sales team calling a truce and coming together to create new processes with the same goal in mind: generating revenue.” Rather than providing a new definition, this statement expands on the first, focusing on the relationship of marketing and sales as a key factor in achieving the goal of successful RPM implementation: generating revenue.

The graphic goes on to point out that this is only the beginning. In implementing processes and techniques to generate revenue, companies can execute changes to varying levels. The best part about this graphic, is it uses the results of their recent benchmark survey of 411 companies. The survey was focused on learning “how top performers were maximizing revenue coming directly from their marketing initiatives. The survey¬†examined revenue performance maturity and performance metrics for each company across three categories: growing number and quality of leads and opportunities, improving sales effectiveness, and optimizing sales and marketing ROI (return on investment).”

The graphic clearly illustrates the results companies experience as they implement the strategies, processes and technologies to varying degrees. The more complete their implementation, the closer they came to achieving their revenue generation goals. With complete RPM implementation companies exceeded their goals.

These graphics together go a long way to helping viewers understand not only the definition of RPM, but the benefits of implementation. The graphics make it clear that teamwork between Marketing and Sales is essential, process improvements are needed, measurements must be introduced, and special technology is required. It rightly points out in the initial definition of RPM that it is a strategy. Two of the most important aspects of achieving RPM goals, however, is only hinted at, but not directly addressed: The Buyer’s Journey, and Content. With a clear understanding of the changes in the Buyer’s Journey today vs. past buyer behavior, combined with robust and valuable content providing what that audience needs and helps them along their journey, you can be highly effective in the crucial inbound and outbound marketing activities that are designed to generate demand. Integrated with the right processes, this will generate more demand, higher quality leads, and bring you to optimum revenue generation results.

 

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