In a survey of nearly 200 CMOs taken last year, the following question was asked – in what area of business leadership would you most like your influence to grow? Overwhelmingly, the most common answer was in the area of business strategy and development. It turns out that many Marketing leaders don’t feel that their ideas in this area are as highly valued as they should be. But why?
As a Marketing leader, you head up numerous functions that are critically important to the business, but which don’t always tie directly to your company’s revenue plan. While your Marketing Strategy should include essential functions such as Corporate Communications, Investor Relations, and Brand Strategy, world-class Marketing leaders also generate and maintain a strategy specific to revenue generation.
What better way to grow your influence in business strategy and development than to develop and own the plan that sits at the intersection of all revenue-generating areas of the business?
What Is a Revenue Marketing Strategy?
The term ‘Revenue Marketing’ was coined specifically to differentiate those Marketing activities that directly impact revenue from those that don’t. A Revenue Marketing Strategy is a tangible document, or set of documents, that taken together aim to align people, processes, and technology within marketing to the revenue goals of the business.
Download the Revenue Marketing Strategy Tool as a framework to translate your multi-year big bets into annual, quarterly, and monthly milestones.
More broadly, Marketing must ensure that it is supporting the revenue needs of ALL relevant stakeholders across Sales, Customer Success, Channel & Product Management. A Revenue Marketing Strategy underpins the entire business case for marketing and provides a clear roadmap for how to align marketing outcomes with sales outcomes. Put simply, it connects Marketing directly to revenue and omits all Marketing functions that do not directly support the revenue plan of the business.
Optimizing the Marketing Spend
While a Revenue Marketing Strategy will be largely focused on how specific activities will generate revenue, it should also address how your Marketing dollars should be allocated. A Revenue Marketing Strategy covers Marketing spend from 3 perspectives:
- How much to invest in each marketing category
- How that investment grows revenue
- How to measure the success of marketing’s commitment to that area.
SBI’s Revenue Growth Platform provides an excellent framework when considering the various areas that you can invest your marketing dollars. The different phases within the Marketing Strategy section of the RGM represent the categories that you might invest in. Think about how much might you spend on:
- Account Based Marketing
- Lead Generation
- Customer Marketing
- Partner Marketing
- Product Marketing
- Field Marketing
While you may have preconceived notions about how your spend should be allocated, you must consider how spending in each of these categories maps to your company’s revenue plan.
Your Marketing Spend by Category Must Map to Your Annual Revenue Plan and to Your Firm’s Long-Term Revenue Objectives
As part of the annual planning process, every company should have an annual revenue plan (typically owned by Sales) that breaks down revenue anticipated from different sources.
The Annual Revenue Plan should address questions such as:
- How much revenue will be retained from existing customers?
- How much will come from new logo customers?
- How much will come from cross-sell/upsell?
- How much revenue and/or revenue growth will come from the enterprise segment?
- How much from the mid-market or SMB?
- How is revenue anticipated to break out by vertical?
Your Revenue Marketing Strategy links the spend by category directly to this revenue plan. If the revenue plan calls for heavy incremental growth from cross-sell/upsell, are you investing heavily enough in Customer Marketing to support this growth? Are you investing enough in Account Based Marketing to support the change that is anticipated from the enterprise segment?
The Revenue Marketing Strategy should call out precisely how each investment that you’re making will drive revenue growth and should ignore those investments that will NOT drive revenue growth. It should ensure that your spend allocation not only supports this year’s revenue plan but also supports your company’s revenue strategy over the next 2-3 years as well.
Measuring and Tracking the Success of Your Marketing Investments Allows You to Adjust on the Fly
Your Revenue Marketing Strategy will be credible only as far as it can be measured. It’s essential then that the strategy prescribes how you will measure the success of Marketing’s commitment to that area. This is less about attribution than it is about alignment with your colleagues in Sales, Product, etc. If everyone is hitting their number and if Marketing’s activities are supporting that success, then everyone is happy.
It is critical then that you gain alignment around your Revenue Marketing Strategy and how your spending in each category will support the goals of other stakeholders, and to gain alignment around how success will be measured. For example, if $X in new logo sales is planned, how many new logo leads must be generated by Marketing, and specifically which investments is Marketing making to generate those leads? A single dashboard that allows for monitoring of the success of these investments is the key to maintaining alignment AND to making tactical adjustments when necessary.
Making the Business Case
Revenue Marketing Strategy begins with a business case to invest in Marketing. We baseline marketing, identify the best revenue opportunities, plan how to execute and measure the results, then iterate on the strategy as we get results.
Marketing leaders often want more budget, but struggle to build the business case that is going to resonate with their CEO. A robust Revenue Marketing Strategy can be the foundation that allows you to justify more resources this year and beyond. Download the Revenue Marketing Strategy Tool to help guide your thinking around how a Revenue Marketing Strategy can help you make your business case.
To go deeper on how you can best construct your Revenue Marketing Strategy, contact an SBI Marketing expert here and ask about the possibility of a virtual workshop.