During uncertain economic times when companies have to “do more with less”, it’s critical for each team to demonstrate how they contribute to the bottom line. Revenue reporting enables marketing operations to show value to the business.
Connecting to the Bottom Line
In the context of marketing operations, revenue reporting looks at the company’s revenue – dollars – that can be traced directly to leads that were sourced by marketing and/or that marketing influenced along the buyer’s journey.
The Business Case for Marketing Operations
Marketing is often seen as a cost center, and it’s an unfortunate truth that during downturns the marketing team may be the first to be trimmed. Marketing can help change the story by having hard data to show the impact they have on the bottom line – revenue.
There may already be some marketing goals or performance metrics in place, such as a simple lead generation quota – how many new names they must get per period. This is a pretty standard report type within marketing automation platforms (MAPs). However, this is pretty distant from revenue. Leads can be fake data, clearly ineligible for purchasing, or otherwise never will turn into paying customers. Revenue reporting is a more mature and useful approach that will prove the value that marketing brings.
Prepare for Critical Conversations
As budget conversations roll around, teams are often called to defend their current spend, let alone request additional budget or headcount to address growing needs. It’s best for marketing operations to prepare in advance and have the data readily at hand before the discussion even starts. Coming into the conversation with key revenue reporting data points is more likely to result in positive results and give the team more credibility for having the business’s big picture in mind.
How to Set Up Revenue Reporting
A key prerequisite for lead-to-revenue reporting is having a marketing funnel or lifecycle processing program in the MAP, ideally with timestamps to track when leads transition through the stages. Lead qualification quotas would be a step in the right direction. Leverage the marketing funnel stages to filter out the obvious junk to count only records that have shown some engagement and are likely to have a positive conversation with sales. However, not every lead qualified by marketing will be accepted by sales, and not every accepted lead will turn into a customer. So it’s still difficult to directly connect this metric to the end goal of revenue.
Lead conversion quotas get even closer – how many of those qualified leads become paying customers, as identified in the marketing funnel. But revenue per customer can vary widely; you could have 50 customers at $10,000 each or one customer at $500,000 for the same revenue. A metric based on total revenue based on the sum of closed-won opportunity amounts rather than deal count is going to be more accurate in terms of business impact. When traced back to marketing efforts, this is true revenue reporting. To take it a step further, you could also look at the anticipated or real lifetime value of each customer. If those same 50 customers returned five times, they’d bring in a total of $2,500,000 over the duration.
At a more granular level, many MAPs offer a way to track campaign costs within the tool. This can show return on investment (ROI) for specific marketing initiatives, and the platform may feature reports and dashboards allowing you to slice-and-dice the ROI for campaigns and channels by new leads, opportunities and closed-won business.
Self-Advocacy for Marketing Operations
Thankfully marketing operations is, for the most part, empowered to pursue revenue reporting for themselves. They are responsible for setting up the lifecycle processing program or marketing funnel in the MAP. This should be done in conjunction with sales, however, so there is alignment on the definition of a qualified lead, customer and all the stages between, and there’s a feedback loop to further refine the model. The MOPs team can leverage MAP-specific reporting and dashboarding to utilize closed-won opportunity dollars and tie them back to marketing initiatives.
For specific views not available out-of-the-box in the MAP, marketing operations may want to partner with the business analytics team for any necessary reports and dashboards to be able to analyze the numbers to further show marketing’s impact.
Marketing operations teams should frame their work within the context of revenue reporting. This demonstrates their understanding of and commitment to the company’s success, and highlights their contribution to the bottom line.