Revenue Performance Management (RPM) – The Next Great Enterprise Acronym?
In the enterprise software world, we just love acronyms. For most of 2010, #SCRM was the reason I got up in the morning. This year, I’m hearing more and more about Revenue Performance Management (RPM) – a strategy (and emerging application category) that elevates the marketing automation value prop to address a C-level priority: revenue.
RPM looks and sounds a lot like marketing automation: align sales and marketing; understand known and unknown prospects; manage the entire funnel; and, measure the effectiveness of marketing investments. But Eloqua and Marketo, the marketing automation leaders evangelizing RPM, are aiming to make RPM a much bigger deal – way bigger than marketing automation.
Why? I see three primary motivations behind RPM:
- Present the increasingly differentiated analytical capabilities in Eloqua and Marketo, and get above the noise of a crowded marketing automation market;
- Empower marketers – these software companies’ primary buyers and users – to earn a more strategic role in the enterprise; and,
- Gain the attention of C-level executives (i.e. CEOs, COOs, CFOs) who can champion more strategic projects and write bigger checks.
This makes sense to me, but the strategy isn’t without its risk. A quick look at relative Google searches shows that there’s a long way to go before RPM wins the mindshare of CRM or marketing automation. These market leaders need to be careful not to shed their marketing automation mindshare and over invest in RPM evangelizing.
What’s the Difference Between Marketing Automation and RPM?
The marketing automation space has been growing rapidly in recent years. Both Eloqua and Marketo are putting big growth numbers on the board. A solid pack of contenders are also still in the hunt. Meanwhile, new players enter the market regularly. Most leading products are approaching functional parity in the core campaign management and lead nurturing modules.
With growing R&D budgets and large enterprise customers pushing them forward, Eloqua and Marketo are now building out more sophisticated functionality in the area of analytics and data integration. Three broader, more sophisticated RPM solutions provide insight into what’s working and what’s not. By pulling data from traditional CRM systems, RPM solutions allow users to gain a more holistic view of the revenue cycle from the earliest stages of marketing through to sales execution. The more traditional marketing components allow marketers to take action on that insight.
Helping Marketers Help Themselves
Of course, RPM is a strategy even more than it’s a set of functional capabilities. And regardless of what technology is available, execution is as important (or arguably more important) than strategy. Therefore, RPM project sponsors need the internal clout to implement a vision that spans marketing and sales. Traditional marketers, unfortunately, often lack the sway to execute such a cross-functional implementation. Eloqua and Maketo are investing to support brave marketers willing to take on the challenge.
The traditional perception of marketers is that they are creative types, great at producing snazzy copy, compelling collateral, and big ideas. Right-brained, not left. RPM, meanwhile, requires a highly analytical competency. Both Eloqua and Marketo are investing a lot in helping marketers adopt more quantitative measures of their efforts. With this measurement comes accountability, and with this accountability comes greater respect from the C-level executives and a bigger budget.
The RPM Elevator Goes to the Executive Floor
Speaking of C-level executives, RPM hits three words those guys love: revenue, performance, and management. What executive wouldn’t want an extra serving of all three? “Extra revenue, please…”
Take the CFO. She’s not particularly interested in automating the tasks of the marketing team. Marketing can deal with that. What she is interested in is growing the top line. When the CFO sees a request for a new marketing automation system, she’s likely to say, “Sure. Just so long as it fits in your marketing budget.” RPM, however, sounds like a bigger deal. If the investment can really move the needle on revenue, the CFO wants in, and she’ll find extra budget when she buys into the vision.
Eloqua and Marketo both have grand ambitions. I don’t get the sense that they want to sell out to one of the CRM leaders. They want to go public and grow to be billion-dollar companies. RPM is a story with ten-figure potential. Marketing automation is not.
That Being Said…
It will be interesting to see how RPM develops and influences the market. In a worst-case scenario, it could meet the same end as Advanced Planning & Scheduling (APS), which tried to one-up ERP with more sophisticated supply chain analytics. ERP vendors now own that market. In an optimistic scenario, RPM could grow into a large, healthy, independent category, like CRM. While ERP vendors own a big part of the CRM market, there is still a huge opportunity for best-of-breed leader Salesforce.com.
I’ll be watching Google search trends and #RPM on Twitter, as well as if other marketing automation players adopt the term. We should get a good sense of RPM’s momentum this year.
There’s bound to be a range of opinions on RPM. I’d love to see your comments below.