Why doesn't Revenue Performance Management (RPM) include Sales?

Dave Kurlan

Logical Steps

This a a great discussion.

So far, the discussion has been largely rhetorical though. Let's make it a little more tangible.

As a sales development expert, I would help a client develop a staged, criteria-based visual pipeline to determine exactly how many opportunities must be in each salesperson's pipeline and what they must be worth in order to achieve the revenue targets, while considering average sales and closing percentages for each salesperson. In many cases, this information comes from the marketing people. Next, I would develop the KPI's to fill the first stage of the pipeline - the measurables that sales management must hold their salespeople accountable for. Both the pipeline and the KPI's should be integrated into CRM. Ideally, the next step would be to identify the marketing KPI's necessary to help the salespeople achieve their KPI's. This is not being done enough because the people in my space, the sales experts, gurus, consultants, trainers and strategists tend to focus on what they know and do best, rather than integrate a holistic solution.

You're right. It's time.

Laura Patterson

RPM

Bob, thank you for a stimulating post and an engaging discussion. Many parts of the organization impact revenue- customer service (especially for repeat biz), the product teams, etc. Of course marketing and sales are the key partners in driving profitable revenue but everyone in the company has this focus so what marketing must do is contribute and demonstrate its impact on revenue, and more importantly on customer acquisition and retention since we don't market to buckets of revenue but rather customer and market segments. And typically in B2B, marketers don't have the opportunity to negotiate the deal so they don't control the actual "revenue." What we do need to do is to connect, engage with and add qualified contributions to the pipeline that will convert quickly to sales opportunities that have a high likelihood to close. Marketing automation is about connection, conversation, engagement and consideration. Marketers have a hard enough time with measuring their contribution to the business as it is, the last thing we need to do is to confuse the issue with another category.

Dave Kurlan

More on the Subject

Back to the practical...

At one of my clients, inside sales reports to marketing, not sales. Their role is to schedule appointments for outside sales and they are doing that quite well (number of appointments is what they are measured on) and being compensated accordingly. However, they have an ungodly number of opportunities that have not achieved pipeline velocity because the appointments are not qualified. Clearly (to me), if the inside salespeople were to be compensated on appointment quality rather than quantity, there would be fewer new appointments scheduled, but most of them would be of a high quality and salespeople would feel more confident about following up and following through. Of course, a measurable definition of what constitutes a quality appointment must be developed.

In my opinion, this challenge falls under ROM, but based on the definitions of RPM above, this work would be consistent with Eloqua's definition (they use Eloqua and are slaves to the data but are clearly missing the bigger picture) but not with Andy's, where he adds, "identifying what creates and stifles value exchanged between trading partners".

If inside sales reported to sales rather than marketing, we would have fixed this for them a year ago, it wouldn't be an issue, and marketing would be back to marketing. But since inside sales reports to marketing, and sales, not marketing, chose to engage us, the territorial barriers are in place and these two groups of campers are not playing well together. Looking at this another way and bringing it back to Bob's original article, why isn't sales in on the fun? It's like the boys telling their parents that "girls are icky". Sales is icky.

So in this particular case, the remedy is for the CEO to do what CEO's don't usually choose to do and that is to call a family meeting and lay the law down. But CEO's don't do that because they expect their leaders to resolve things like this on their own. And when the leaders can't play in the same sandbox, they develop silos, play solitary games, and don't learn from each other.

Sales isn't in on the fun because Marketing doesn't want them to be in on the fun!

Dave Kurlan

It Would Help But Would it be Practical

I like the idea - in concept.

On the other hand, I'm afraid that it adds another layer of management - which no organization needs, and the CRO may not have the respect of either sales or marketing, depending upon which path he/she took to reach that position. Other than that, I love it!