Marketing is an ever-evolving aspect of a business. Marketing firms, teams, and researchers constantly develop trends and refine strategies to execute campaigns that drive better results at lower costs. As a business, you need to familiarize yourself with these marketing trends and innovations to get ahead of the competition. One of the strategies gaining popularity among marketers and business leaders is revenue marketing.
What is revenue marketing? Revenue marketing is a holistic approach to marketing that focuses on one goal: drive and grow revenue. It aims to break down the traditional marketing and sales silos; instead, align their efforts, strategies, and initiatives to work towards achieving a projected revenue and maximize return on investment (ROI). There are four stages involved in revenue marketing. These are:
- Identifying SMART revenue goals
- Crafting sales strategies that will meet revenue goals
- Establishing and aligning marketing initiatives with sales strategies
- Improving and iterating marketing initiatives to get better results
Although many businesses currently adopt revenue marketing, it’s good to know its pros and cons. This way, you can gauge if implementing this technique will be beneficial for your business.
Pros
The merits of revenue marketing are:
Provides A Measure Of Performance
When implementing any strategy in your business, marketing or not, you need to establish performance standards or key performance indicators (KPI). KPIs will help you gauge how well your new strategy is working towards realizing the singular goal.
Revenue marketing provides the perfect measure of performance standards. How? Since revenue is all about numbers, you’ll have quantifiable data, which will allow you to measure performance accurately compared to when using qualitative data. From this, you can see if you’ve attained your revenue goals or not.
Increases Chances Of Success
The alignment of sales and marketing strategies with your projected revenues gives your team concrete goals to achieve. It’s said that goals make a given venture or investment worth the work. You’ll perform with a purpose rather than blindly implementing initiatives that may be sub-par. Blind working will reduce the success rate and lead to waste of resources.
Instead, revenue-oriented goals will be a guideline for your team’s activities; they’ll devise ways to ensure they attain the set revenue within the given time frame. This increases the chances of you achieving your desired gains.
Is Customer-Oriented
Marketing operations revolve around your customers. However, some marketing strategies are more customer-focused than others. Some will be keen on following leads where the main focus is on driving traffic; others will focus on the customer’s needs, such as revenue marketing.
With revenue marketing, the strategy lies within generating revenue for your business. The only way to generate income is to increase sales, which is tied to customer satisfaction. Due to this, you’ll be necessitated to understand your clients better and work towards improving your products and services to meet their needs and preferences.
Allows For Collaboration
Teamwork is what drives a business to achieve success. Although your business segments involve different operations, collaboration is key.
Revenue marketing involves marketing and sales departments working together rather than in silos. Although each of these teams may have different tasks, tools, and channels, they will work towards the attainment of the same goal.
Cons
These are the cons of revenue marketing:
Not Fully Dependable
When projecting revenues that guide your revenue marketing strategy, you utilize data based on past operations and results. Although this data is dependable and credible today, it doesn’t mean that you can depend on it tomorrow. The undependability arises because various factors might affect your current operations, making the previous projection unusable and misleading if followed.
For instance, if your business is suddenly slow and you’re losing customers by the day, the possibility of you achieving your target is minimal. This means that you have to make new projections every time there’s a change and if things aren’t improving. Re-strategizing often wastes valuable time that your team could’ve spent on operations bringing in returns.
Tendency of Setting Unrealistic Revenue Goals
Aiming for the highest amount is natural when forecasting revenues. Although it is a good thing, you might also end up setting unrealistic goals.
Once you set goals too high, your sales and marketing team might find it impossible to accomplish them and may be demotivated. Remember that employees who are demotivated have low productivity. Besides your workers feeling the pressure, you won’t achieve the targets you’ve put in place, making your revenue marketing strategy a failure.
Source Of Conflicts
As previously stated, revenue marketing requires the sales and marketing teams to work together for the strategy to be effective. Such collaboration might be a source of conflict where either of the managing parties isn’t willing to work with the other. For example, one team leader might undermine the other and end up sidelining when sharing data and ideas.
Besides not being willing to work with each other, you might not have brought all parties involved onboard when implementing the system. This might lead to inefficiencies in your revenue marketing since you’ll speak a different language, where some don’t appreciate the systems and others readily adopt it. This often leads to conflicts in the future.
Conclusion
As is with any other strategy, this article has shown the advantages and disadvantages of revenue marketing. With this information, you can weigh different options and decide if revenue marketing is suitable for your business or not. Whichever decision you make, ensure it’s the right one, and you won’t regret it a few years down the line.
