Revving Up Revenue

The long recession and the rise of social CRM were not simply coincidental. I believe they happened together. That’s not to say that social CRM happened for some cosmic reason; I neither subscribe to the belief that all things happen for a reason nor do I believe I am qualified to hold forth beyond what I’ve just written.

I think social CRM — the roots of which precede the recession — became important during the recession because it represents a good and inexpensive way to keep tabs on existing customers and possibly capture some new ones at low cost.

That’s Recession 101 in my book. Manage the installed base, capture the business that’s available, keep the maintenance stream coming in and, whatever you do, don’t give a customer a reason to leave you. In the process, you can promote your thought leadership, and that’s valuable too. Social is perfect for that and a good deal more. But now that the recession is giving way and job growth — a frustratingly lagging indicator — is making tentative gains, many companies that I speak with are turning their attention to revenue and how to accelerate it.

On Toward Recover

Just as managing the customer base is Recession 101, accelerating revenue is Recovery 101. Some of us may not have made the psychic switch yet, but that’s coming. Lots of people I speak with, especially vendors and VCs, have the revenue idea firmly in place, and just as social predates the recession, revenue performance management (RPM) predates the recovery.

VCs like Bruce Cleveland, a former high-ranking executive at Siebel, have been writing about RPM for a couple of years, and today I can speak with him and people like Phil Fernandez, founder and CEO of Marketo, or Swayne Hill, CEO of Cloud9 Analytics, and many others about RPM and have good discussions. The talks aren’t simply about revenue and how nice it is, but more substantively, they’re about accurately identifying opportunities and bringing them to fruition — not just in a reasonable time, but like clockwork.

Unlike other trends that we’ve seen over the years, RPM is unique in that it focuses on end-to-end business processes and quite possibly the overlap of responsibilities and systems to manage those processes. One of my favorite examples of a sales manager and a company that “gets it” is Dave Fitzgerald, an EVP at Brainshark who has a constellation of SaaS applications covering the end-to-end spectrum. From lead-nurturing to forecasting to compensation, Fitzgerald has RPM covered, and he could be its poster child.

Out With the Old

Every recession has an end, and there’s always an idea or technology that leads us out. Often what leads us is a tacit agreement to do things better and at less cost than we did prior to the meltdown. The idea makes sense, and it spreads virally, and no one wants to be left behind with a business practice that is outdated and relatively expensive. On-demand computing was one of those drivers from the last recession; so was the online meeting. Companies like and WebEx became big players in the process. You might say that those companies were too small to have a concrete effect on the economy at large. But keep in mind that they weren’t alone, and in any case, no trend has to carry the economy on its back; the trend need only be leveragable and contribute to the growth rate, which is a more doable thing.

Revenue performance management fits the current need. It is a blanket term that can easily apply to managing anything in your SG&A line as it can apply to revenue generation. Its orientation is growth, not simply maintaining a hunkered-down pose waiting for things to get better. The economy is shifting; everywhere I look experts are showing us how to do more with a little less.

Anneke Seley of Sales 2.0 fame is telling us to look at hybrid Web-phone-and-field selling. Analytics vendors are showing us how to mine our social data to find the customers and prospects and customers who really need our attention. And experts like Thor Johnson are telling marketers to get more quantitative in discussions with the C-level, both to justify their budgets and to have greater impact on a company’s direction.

The Rise of the CRO

When you boil that ocean down, one of the surprising things you are left with is that the distance between sales and marketing is shrinking, and that might be the biggest thing to come out of this recession. Sales and marketing each have their jobs to do, and each is different from the other. But what’s clear is that if there was ever an either/or discussion about sales vs. marketing, the conjunction is changing from “or” to “and.”

As that change takes place, we are already seeing the emergence of a new job title, the Chief Revenue Officer or CRO. I’ll admit CRO doesn’t exactly roll off the tongue, but I am old enough to remember when CIO didn’t roll off the tongue either. I am also seasoned enough to recall other gems like “vice president of first impressions,” proof that some trends are fads. But CRO looks to have some staying power, most importantly because of that “R” word. Who doesn’t love “R”?

The CRO is the person who will need to understand both sales and marketing and most importantly also know that the two need to be mutually reinforcing. It does no good for one to be the servant of the other. CRO is a status to which both the VPs of sales and marketing can aspire. Does this mean that CMO and CSO go away? I don’t know. Does the CFO report to the CEO? The Board? Or work with the CEO? It matters.

What’s certain, as I look at the landscape, is that marketing and sales are a lot different today. Customers are in control, and many people recognize that the sales process is rapidly giving way to the buying process, and that sets the stage for some interesting realignments.

Denis Pombriant is the managing principal of the Beagle Research Group, a CRM market research firm and consultancy. Pombriant’s research concentrates on evolving product ideas and emerging companies in the sales, marketing and call center disciplines. His research is freely distributed through a blog and Web site. He is the author of Hello, Ladies! Dispatches from the Social CRM Frontier and can be reached at [email protected].

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