In this article, we’ll show you what revenue marketing is, and why you should be using it. You’ll discover why more and more marketers are taking a revenue-first approach and ignoring vanity metrics that don’t move the needle.
Marketers are always under pressure to deliver the best ROI and avoid being seen as a cost centre.
Luckily, there are proven models that will allow you to identify your best-performing channels and help you accurately measure campaign performance.
The key is to avoid looking at vanity metrics and focus on the number that matters: revenue.
Marketers need to justify why they’re spending money on various channels, and the revenue marketing approach can help.
What is Revenue Marketing?
Revenue Marketing is the process of identifying the marketing channels that lead to revenue growth and optimising resources to maximise their ROI from marketing activities.
Once you understand how to identify the opportunities that directly drive ROI, your marketing function can become more accountable and transition into a high-powered revenue machine.
Rather than focusing on metrics such as CPC or CPL, marketers need to look at revenue-focused metrics such as CPA (Cost Per Acquisition) and ROAS (Return on Ad Spend).
Revenue marketing has continued to grow in popularity because marketers who embrace the model have a more significant impact on their organisations and have the skills to leverage the latest marketing technology and use it to drive bottom-line growth, predictably.
Using the revenue model, I’ve been able to track +68.84% revenue generated through various marketing activity. Something I found difficult to prove before joining the Ruler Analytics marketing team.
Putting together an effective revenue marketing strategy is a must-have for many marketers, but many find it a struggle to execute a solid process.
Most marketers report on the success of their marketing based on leads and conversions in Google Analytics. This is good, but leads and conversions don’t always prove that marketing campaigns are impacting the bottom line.
On that note, I’m going quickly to demonstrate the revenue marketing model I’m using to measure the success of my campaigns.
Let’s dive in.
First things first, leads submitted by either form or phone call are captured using visitor level analytics. The software captures the lead’s contact details and marketing touchpoints. This includes the source campaign, channel, keyword used on a first or last click basis.
Ruler Analytics Conversion Report
The lead information is then sent from analytics into our CRM for the sales team to process. Each deal in our CRM has the marketing information sent from analytics passed along with it. This helps me create a better alignment with sales.
When a lead converts into revenue, we integrate the customer’s information, such as the revenue amount and marketing data, to a database. This data is then synced with our subscription and revenue system, Chartmogul.
In Chartmogul, we’ve set up custom attributes to capture the marketing data. It also connects directly with our payment processor. So, every month the revenue we’ve generated from each customer gets attributed back to its initial touchpoints. Allowing me to track and report on any subsequent sales.
The bottom line here is that I no longer need to assume how much revenue my content and advertising efforts are generating for the business as I’m able to connect the dots across the entire visitor journey.
The process above is inspired by the Closed-Loop Framework. We have a handbook dedicated to the Closed-Loop Framework. So, if you want to maximise the ROI from your marketing activities then I recommend you give it a read!
You can download that here.
Stop Looking at Vanity Metrics and Focus on Revenue
Just to prove just how vital revenue marketing is, I ran an experiment to show why the number of leads generated is usually the wrong number to look at.
I took a sample of 20 phone calls from a PPC campaign to track what the outcome of the calls was.
Of the 20 calls, 12 were poor quality, not qualified or unsolicited.
However, 8 of the calls went on to the demo stage.
3 of the leads that sat a demo were relatively low value and didn’t close into revenue. However, the remaining 5 calls were worth over £250 in MRR.
If we were to look through a traditional marketing lens and judge success based on the number of calls generated or conversion rate, there would have been nothing particularly special about this campaign.
But, if we look at it from a revenue marketing perspective, the campaign was a success.
As a bonus, with the Ruler Analytics keyword report, we were able to determine which keywords are generating the most opportunity for revenue growth.
Benefits of Revenue Marketing
A clear picture of your marketing efforts isn’t the only benefit to using a revenue marketing model. There are multiple other benefits, including:
Build Buy-In Across the Company
One of the main constraints many marketing teams have is that they are viewed as a cost centre and not a profit centre.
Once you use closed-loop attribution to prove that your marketing efforts have a direct (positive) impact on company revenue, it will be easy to build buy-in for new projects and experiments you want to run.
You’ll also be able to prove why company revenue should be spent on marketing and not elsewhere due to the value your activities provide and the real impact marketing has on the company bottom-line.
Make Decisions Based on Real Data
By focusing on revenue, you’ll know what works and what doesn’t. If a channel seems expensive (LinkedIn Ads have a notoriously high CPC), you can look past vanity metrics such as the number of leads generated and judge success on whether it brings in revenue or not.
For example, in the screenshot below, you can see that Facebook Ads generated more leads than Google Ads.
Ruler Analytics Last-Click Source Report
On first impressions, you’d want to start spending more on Facebook. However, if we focus on revenue, we can see that the Google Ads campaign led to higher revenue, therefore making it a better channel to focus on.
This means you can make decisions using reliable data, rather than letting metrics that don’t matter to you affect your choices.
It’s always tempting to get caught up in vanity metrics like goals or the sheet number of leads that a campaign generates.
But, as we’ve seen, they don’t always tell the real story.
As a marketer, you should always be proving why your work matters to your company, and using the revenue marketing approach is the perfect way to do that.