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Leaving Trillions on the Table

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I hope I have made at least one point abundantly clear in Part I of this book: In order to continue to prosper in today's radically altered buying environment, corporations need to make equally radical changes in their marketing and sales strategies. This is truly a change-or-die scenario for senior corporate executives wondering how to spur revenue growth and profitability (and I can't think of any who are not).

To achieve breakout revenue growth, businesses need to transform every aspect of how they create revenue. They must rethink the roles, responsibilities, metrics, and processes that are used by their departments on the front line of revenue creation, specifically marketing and sales. In the same way that Six Sigma became the shorthand name for the transformation of manufacturing excellence and quality, I call the strategies needed for revenue transformation Revenue Performance Management, or RPM.

I've tried to explain over the past eight chapters why companies must transform their revenue generating structures to thrive in this newly interconnected world. The remainder of this book will explain how all companies, no matter their size, can actually achieve breakout growth.

Before we embark on the rest of our journey, let me make clear the stakes that are on the table. I recently led a global study to quantify the bottom-line impact of transforming a company's marketing and sales activities through RPM. The study, conducted in 2011 by Marketo's in-house research team, calculated that by adopting RPM, businesses worldwide have the potential to bring in a total of $2.5 trillion — that's trillion with a “t” — more in aggregate revenues by 2017 than they had at the time of the study. These findings confirm the virtually unlimited opportunity that RPM can offer for revenue acceleration; some customers even reported 40 percent or more in revenue growth after they adopted a comprehensive Revenue Performance Management strategy.

Revenue Revolutionaries

Zuora

Zuora is the global leader in subscription commerce and billing, a company that helps organizations in every industry transition to the Subscription Economy. Clients use Zuora's multi-tenant cloud-based platform to launch, scale, and monetize their subscription services. Zuora's applications work where traditional Enterprise Resource Planning (ERP) applications fail, particularly in subscription pricing, quoting, orders, billing, payments, and renewals. Zuora was an early adopter of RPM as a primary driver of its business growth and market leadership.

Challenges

While planning to launch Zuora back in late 2007, the company's founders realized that the market into which they wanted to sell was both huge and complex. It included a variety of verticals that had varying needs and business practices. It also involved different target customer roles that they needed to address appropriately; one-size-fits-all marketing simply wouldn't work. At the same time, their sales process had to include multiple touch-points that they would organize, time, and optimize in order to achieve maximum results.

The Zuora marketing and sales team wanted to establish their company's visibility in the sales funnel from the front end, to the marketing-qualified lead phase, and then onto the sales-qualified lead level. Their challenge was to use this process and the entire revenue cycle to focus their sales professionals on the highest probability leads; at the same time, they had to ensure that they responded in a timely and intelligent manner. The company also realized that they needed a marketing platform specifically built to handle the complex sales and marketing tasks they needed to perform. In Zuora's view, other marketing automation offerings on the market were designed as single-purpose platforms, and were therefore insufficient for the company's ambitious revenue management and scalability needs.

Solution

To meet its full range of sales and marketing needs, Zuora worked with Marketo to implement a complete RPM solution that would synch with the company's established salesforce.com infrastructure. This allowed Zuora to effectively manage its total revenue cycle, from high-volume automated demand generation campaigns all the way down to closing sales.

During every step of the RPM process, Zuora relied on Marketo software and expert support to track contacts, rate prospects, and measure the return on investment (ROI) for every marketing campaign. Doing so involved simultaneously managing 15 to 20 marketing outreach campaigns, scoring leads in the revenue cycle, and nurturing prospects until they were ready to hand over to the sales team for closing.

Benefits

Zuora now manages massive amounts of data, drives multiple campaigns simultaneously, and measures each marketing effort's ROI. In the process, they can supervise every stage of its revenue cycle funnel and focus on prospects and opportunities that deliver the greatest revenue. Marketo's RPM solutions have also enabled Zuora to strengthen the integration of its marketing and sales activities in order to optimize the entire revenue generating process.

The ultimate proof is in Zuora's sales results after implementing Revenue Performance Management. By using RPM to build a higher-powered revenue engine, Zuora has continued to grow sales and revenues by 400 percent year over year. In the past 18 months alone, Zuora closed 10 deals worth more than $1 million each. At the same time, the company has also doubled in size to nearly 200 employees.

Jeff Yoshimura, Zuora's VP of Marketing, says, “Just as Zuora is enabling the transformative Subscription Economy, Revenue Performance Management is empowering companies to transform their sales and marketing processes and achieve truly breakout revenue results.”

The study we conducted at Marketo also found that the accelerated revenue growth that companies achieve by using RPM is not the result of any single factor. Instead, measurable improvements in business performance result from a systematic approach to transforming a company's marketing and sales processes across the full buying cycle. When taken in combination, they produce such eye-popping results as the 40 percent revenue growth statistic cited above. Examples of key quantitative improvements in revenue processes identified by the study include:

46 percent increase in the number of real buying opportunities available to the sales team.

12 percent improvement in average contract value.

17 percent improvement in sales win rate.

15 percent reduction in total customer acquisition costs, allowing more resources to be invested in growth.

There is indeed “real money” available for companies deploying RPM. It is an approach to reengineering the marketing and sales demand chain that can transform the entire revenue process in a major way. In the coming chapters, I will lay out a roadmap and action plan you can use to capitalize on this trillion-dollar revenue growth opportunity.


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