« | Main | »

Revenue Performance Management: An interview with Jon Miller, VP Marketing and Co-founder of Marketo

This is one of a series of occasional interviews with top practitioners on topics of interest to B2B lead generation, marketing and new business development professionals.

Jon MillerJon Miller is VP marketing and co-founder of Marketo, one of the marketing automation solutions supported by AcquireB2B, our B2B agency specializing in driving more leads and sales with B2B marketing automation.

Jon, named a Top 10 CMO for companies under $250 million revenue by The CMO Institute, graduated magna cum laude in physics from Harvard College and has an MBA from the Stanford Graduate School of Business.

I had a conversation with Jon about Revenue Performance Management and the current state of Sales and Marketing:

Jon, what is Revenue Performance Management?

Revenue Performance Management, or RPM, is a strategy to optimize interactions with buyers across the revenue cycle in order to accelerate predictable revenue growth. RPM is a systematic approach to identifying the drivers and impediments to revenue, measuring them, and then optimizing them for top line growth.

Marketo provides the tools, thought leadership, and best practices to change how Marketing and Sales work, and how they work together, to help companies adopt RPM and accelerate predictable revenue growth.

What’s your take on the current state of Marketing and Sales? 

The fact is the current sales and marketing model is at best obsolete, and at worst, totally dysfunctional. The following two data points help to tell the story:

  • 52% of Sales reps do not achieve their Sales goals (CSO Insights 2010)
  • 94% of Marketing qualified leads will never close (SiriusDecisions 2009)

The dysfunctional state of the revenue creation process is partly a result of the longstanding inability of Sales and Marketing to work effectively together. And it’s also due to the volatile and increasingly complex business environment in which digital media, and especially social networks, have caused a sea change in buying behavior. This has given even more control to customers and prospects, enabling them to actively search online and collect information from trusted sources before making their buying decisions.

In the new model, companies transform the way their Marketing and Sales teams work by:

  • Managing the Marketing department as a true revenue-generating organization;
  • Implementing a systematic process of nurturing prospective buyers through the revenue cycle, and measuring buyer engagement at every step of the process;
  • Providing Sales teams with the information and tools they need to prioritize their time so they can engage with the most qualified prospects, at the right moment;
  • Measuring the effectiveness and ROI of spending on people and programs at every step of the Revenue Cycle across Marketing and Sales; and
  • Allocating investments to accelerate results and revenue performance.

Jon, you mentioned the “Revenue Cycle.” How about giving us your definition?

The Revenue Cycle starts from the first contact with a prospect and continues through the sale and beyond to the customer relationship. This is important since when Marketing and Sales coordinate their activities as part of a unified Revenue Cycle, companies get better at properly identifying and prioritizing opportunities… and better quality leads result in more sales wins and ultimately more revenue.

The Revenue Cycle requires coordinating Marketing and Sales activities throughout the entire cycle to generate maximum impact. The old model of a linear handoff from Marketing to Sales must give way to an intertwined model where both organizations jointly own prospect relationships and coordinate their activities.

The Revenue Cycle requires collaboration between Marketing and Sales activities, but this is easier said than done. The key challenge is that each function works differently, thinks differently, and is measured differently.

In the past we discussed the idea of applying the Six Sigma process to the Revenue Cycle. Could you please share some of your thoughts about that?

In the past 30-plus years there has been a significant transformation in supply chain operations. Businesses have been able to make them quicker, cheaper and more predictable, mainly due to advances in technology. Six Sigma and other quality improvement programs strip inefficiencies out of the system. As a result, lean businesses have increased productivity and saved trillions of dollars through just-in-time inventories, speed-to-market processes, etc.

In contrast, progress to improve productivity in the demand chain has been almost glacier-like. The reason is many Sales, Marketing and Service operations continue to use antiquated processes in a marketplace that has changed dramatically due to the Internet. So why not apply the Six Sigma process to demand chain operations?

To do this, best practice companies are measuring performance indicators in order to continuously improve their revenue-producing processes in the same ways they did on the cost side. To continuously improve revenue performance, organizations must measure and analyze the operational and financial impact of each Sales and Marketing activity across the revenue cycle.

For instance, with lead generation campaigns, measurements include the speed and volume of leads gained, nurtured and converted via multi-marketing platforms with varying calls-to-action… as well as calculating the costs and revenue impact of each activity. By understanding the results of these disparate activities by channel, product and buyer, organizations can identify and remove defects, and improve on those efforts that have the greatest positive revenue impacts.

So how do we get there from here?

The last frontier of productivity is how companies choose to manage and generate revenue. In today’s budget constrained environment, this commitment to measurement and operational excellence is more needed than ever.

By measuring and installing processes to continuously improve the demand chain, companies can significantly increase Sales and Marketing effectiveness (revenue capture) and efficiency (cost reductions) quickly, cheaply and more predictably.

Jon, thanks for taking the time to share your thoughts on Revenue Performance Management and the current state of Sales and Marketing.

Readers, what are your thoughts on the subject?

Please add your comments by clicking on the word “comments” in the line below the Share button.

Post a comment

(Not displayed with comment.)

Need help with B2B lead generation, marketing and sales?
For more information, please call Mac McIntosh at +1-401-294-7730, send him email at or visit www.sales-lead-experts.com