The 'What,' 'How,' & 'Why' of Revenue Performance Management

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Jay Fuchs
Jay Fuchs


No business is perfect. There's always something you could be doing better — some hitch or hiccup in your sales or marketing efforts that could use some smoothing over. And while those gaps are more obvious and pressing for some companies, every organization stands to gain from consistent, incremental improvement.

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Something called revenue performance management (RPM) can provide the basis for that kind of progress — so no matter where your sales and marketing efforts stand, it's worth taking some time to learn about the concept.

Here, we'll take a closer look at revenue performance, explore the process of revenue performance management, explore its key components, and see how to measure revenue performance.

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Your organization's revenue performance sheds light on the effectiveness of your sales strategy, your marketing strategy, and the interplay between the two. It's supposed to show you what specific aspects of those elements are working well and where you might have room for improvement.

Let's take a closer look at how you can apply the concept through revenue performance management.

Revenue Performance Management

Revenue performance management is the process of optimizing revenue performance — a data-centric approach to refining how a company's sales and marketing departments connect and interact with prospects throughout a revenue cycle.

When done correctly, RPM allows organizations to leverage effective, consistent sales and marketing processes to lock in on target personas and market segments. Ultimately, it revolves around identifying higher-level revenue generators, measuring their performance, and ultimately tailoring marketing and sales strategies to get the most out of them.

RPM is often lead-oriented — conducted to find flaws in lead generation, identify issues that might be stunting lead quality, and smooth out how leads proceed through the sales cycle.

The Value of Revenue Performance Management

Every business has room for improvement — and if your company has the resources and ability to analyze a bank of buyer and prospect data, you can act on it through revenue performance management.

RPM lets you understand the specific touchpoints that are doing the most for you and areas where you're running into trouble — informing decisions that can help you double down on what you're doing well and remedy what you're doing wrong.

The Keys to Revenue Performance Management

1. Synchronicity and Communication Between Sales and Marketing

Revenue performance management is a process that touches both sales and marketing. It's a matter of identifying cracks and strengths in both processes, so if you want to get the most out of your RPM, the departments can't be siloed.

You need to have solid visibility into how each department contributes to revenue generation. Whether you use a sales funnel or flywheel to shape your approach to customer acquisition and retention, make sure your sales and marketing departments know both how your model works and their place within it.

As I mentioned earlier, revenue performance management is data-centric, and gathering that data isn't specific to either department. If you want to conduct your RPM efforts effectively, make sure communication and access to information between departments are open and accessible.

2. Relevant Technology

Your RPM's success is a function of how well you can gather and analyze relevant data — and neither of those processes can be done manually. You need to back your efforts with solid marketing and sales technology.

Resources that let you gather insight from your website, social media, and email touchpoints will be invaluable when you look to improve your revenue performance.

The same goes for sales analytics software and any other tools that can give you a closer look at the "how" and "why" of your overall performance and customer tendencies.

3. Consistent Improvement Through Competitive Benchmarking

RPM is a process rooted in incremental progress — finding areas for improvement and acting on them. But in some cases, those "areas for improvement" might not be particularly obvious.

You might see an aspect of your sales or marketing efforts that looks impressive without context but might actually be lagging — relative to your competitors' performance. You need to know how you stack up with your industry peers if you're going to get the most out of your RPM.

That's why conducting consistent competitive benchmarking — the process of using relevant metrics to compare your company against its competitors and broader market — is central to providing reference points that can inform effective RPM.

How to Measure Revenue Performance

1. Accrue and analyze data.

As I touched on earlier, RPM is a data-centric process — if you can't effectively gather and thoughtfully analyze your data, your revenue performance management efforts won't go anywhere.

Gather as much data as you can — whether that be through form submissions, email insights, website interactions, behavioral trends, or any other information you can pull from your touchpoints with prospects and customers.

Once you have a solid bank of data to comb through, start to thoroughly analyze it — looking closely for historical trends, hiccups between stages of your sales process, and any other indications of past or future underperformance.

2. Take a close look at lead generation and lead quality.

Once you have your data accrued, pay careful attention to how your leads are generated, your marketing materials' conversion rates, how your leads are being processed, and any noticeable gaps that might indicate whether any of those elements are inefficient.

Revenue performance management is about trimming fat and locking in on the right prospects — segmenting to ensure that you're getting optimal ROI from your sales and marketing efforts.

You're trying to find potential customers whose needs align with your solution, determining whether you're actually getting there starts with seeing how your leads are paying off.

3. Identify areas for improvement with relevant metrics.

With your data and lead insights behind you, you can start to identify where your sales and marketing efforts are running into trouble. KPIs like MQL-to-customer conversion rate, sales win rate, and other metrics that shed light on how efficiently you're able to move prospects through your sales process can provide a solid basis for overall improvement in your sales and marketing.

For instance, your RPM efforts might reveal that your discovery calls are disproportionately unsuccessful — relative to those of other companies in your space. With that insight in mind, you can take a closer look at your sales messaging, lead generation tactics, or follow-up strategy.

It's worth noting that RPM is an ongoing process. You need to keep accruing and analyzing your data to make sure you're taking the proper strides and addressing your most relevant shortcomings to constantly improve.

Consider giving RPM a shot.

Leveraging revenue performance management can seem like a tall order. It's a complicated process with a lot of moving parts that takes work and careful analysis — but if you have the resources to implement it, you should at least consider making the effort.

Your business can always be better, and RPM is one of the more effective ways to help you realize your full potential.

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