Fasten your seat belts. This article will be hotly debated.
The martech industry is actually in a revenue bubble, like the 1995 dot-com bubble and the 2008 real estate bubble. And it’s unclear when it will burst.
The revenue bubble occurs when go-to-market teams and the technologies they use organize into a central group with one goal: sales. The role of the revenue manager and the function of revenue operations emerged from this.
The problem? What started as a rallying cry for marketers to have more impact has sadly turned into a sea of similarity, with corporate brands that are eerily identical in look, sound and feel. customer engagement.
Before you get too upset, listen to me.
As a B2B marketer, I’ve always been a revenue champion. One of my favorite books is “Revenue Disruption” by Phil Fernandez, co-founder of Marketo. Every activity must result in a sale! It was the motto.
But the longer I worked in marketing, the more I began to see that some of the best companies weren’t just focused on revenue. There was more to their success, which we will explore in this article.
Without income, what’s the point?
Here’s why the income movement has become popular. Marketers were tired of being treated like salespeople. They were sometimes called the Department of Arts and Crafts. I admit it, the income movement has done a great job of changing that perception.
The problem? The focus on revenue is short term.
And I may be biased, working for a company that’s obsessed with customer experience at the expense of short-term profit, but let’s look at both sides.
Three powerful and long-lasting spears pierce the revenue bubble. These are community, product and brand driven growth.
Community is not, and should never be, about income. And while you can tie some attribution to community-driven efforts, trying to extract money from a community is inauthentic. Customers can smell the inauthenticity. We have often seen members drop out of communities that tried to milk them down to the last penny. We’ve also seen communities help growing businesses become market leaders. Marketo and Salesforce are great examples, but there are many more. There are different skills and competencies required to grow a community, which revenue-oriented operators may lack.
2. Product-led growth
Product-driven growth is about creating a product experience so good that users recommend others, which becomes the primary method for adding new customers. The focus here is on user behavior and feedback, and implementing rapid changes. A short-term focus on revenue (closing large contracts) can be counterproductive to this effort.
You’ve probably seen it first hand in your organization. A team has dozens of planning and negotiation meetings with a vendor, only to find that employees have already started using a different platform that they paid for with their credit card.
That’s not to say enterprise sales and field marketing aren’t relevant. Both can generate tremendous growth and awareness. However, the revenue-led growth is tangible proof that there is more to the story than just revenue.
Branding is the most obvious contradiction to revenue movement. It’s incredibly difficult to attribute offers to branding. You can follow branded search terms or ask “how did you hear about us?” but much of this brand’s influence has happened without our knowledge. Branding is what happens when a buyer needs something in the moment and your business is at the top of the list. The brand appears when a buyer does not make a rational decision based on facts but on emotion.
For example, I chose my car insurance provider purely because I liked the “Nationwide is on your side” jingle. Such a good melody! As a final example, take 10 seconds and think of your three favorite companies. I have them? Now the question: do you think they got to where they are today by matching revenue?
The problem with every employee aiming to generate revenue
The problem with everyone having a revenue goal is that other critical aspects, such as customer experience, can be left out. Not to mention the historical examples of unethical business leaders who focused on revenue above the customer and caused the company’s reputation and share price to plummet.
But let’s take a practical B2B approach. Should graphic designers have an income goal? What about business communication? What about legal departments and those who protect the security of customer data? And going further, if those roles don’t have revenue targets, does that mean those roles aren’t important?
This is where the income bubble starts to burst, because if it’s all about income, nothing else matters.
But other aspects of the business matter. And successful brands know this very well.
How to prevent the income bubble from growing and bursting
The solution to the income bubble is tension. Healthy tension, healthy debate, and natural, productive conflict that forces one party to find balance when they step out of line. Should there be a revenue goal? Yes. But there should be a customer experience goal defined alongside it. Customer experience can be measured by satisfaction, NPS, engagement, opt-out, and other metrics that show customers like (or dislike) your brand.
Should there be a new sales target? Sure. But alongside it should be a community growth goal, a brand goal, and a non-sales related product goal.
Balance your revenue goals with customer experience and balance sales with your brand.
In summary, while companies have benefited from the alignment created by revenue movement, they need to be careful not to lose sight of the less measurable aspects of the business that can differentiate a brand in the long run. And while many operators see revenue as the only answer to solving their business problems, the reality is that business, like life, is rarely about one thing.