Revenue analytics is the process of discovering where your revenue came from. It’s a granular analysis that tells you which marketing and sales channels, campaigns, and efforts are impacting the bottom line at your organization.
Of course, it’s easy to know the final touch that closed a deal (last-touch attribution), but how did the customer reach that final step? B2B sales cycles are long and revenue analytics track touchpoints through the entire funnel, from first anonymous visit to closed deal. That way, once a deal closes you know everything that influenced the customer’s decision to buy, making it easy to invest in the routes that are working and cut the areas that aren’t.
As marketers, our responsibility is no longer to just drive leads. To prove real value, you must be able to show how your efforts are driving revenue. Below, learn how to shine a spotlight on revenue to improve the ROI of marketing spend and create a positive impact at your organization.
Tracking every touchpoint allows marketers to look back to discover positive conversion trends and then optimize the buyer journey for the campaigns and channels that convert into revenue. Not only will this increase the bottom line, it also produces a better experience for customers. High conversion rates go hand-in-hand with delivering on prospect/customer wants and needs.
Revenue analytics give marketers the ability to measure success by hard facts (revenue), not speculation (clicks or leads). You can begin to ask questions like, which ebook had the most downloads from leads who eventually turned into customers or at which event did we talk to the most companies that eventually signed a deal? These questions are significantly more insightful than simply which ebooks had the most downloads or which events have the biggest attendance. Answers to the former provide business value, answers to the latter do not.
Once you know the campaigns that convert better at the bottom of the funnel, you can invest more in those areas and cut costs in the areas that aren’t working, drawing in more leads that are likely to become customers.
By doing this revenue analysis, you can continue to optimize the process and continue to attract more qualified, converting leads. You may have less traffic, a narrowing of the flood gates if you will, but the traffic you do receive will be more valuable because it has a higher chance of converting to revenue.
Sales and Marketing Alignment
Because revenue analytics highlight what is resonating with prospects and driving conversions, it helps the team provide a better customer experience moving forward. For example, if the sales team has been in conversation with a prospect who is having a hard time understanding the value of attribution, they can reach out to marketing to ask for a piece of content to pass along.
The marketing team knows they have two ebooks on the topic, Marketing Attribution 101 and Components of a Smart Attribution Solution. They can then use the data from revenue analytics to uncover that the attribution 101 ebook has a higher top-of-funnel conversion rate and drives more revenue than the smart attribution download.
Sales can now provide the prospect with, based on conversions, the content most likely to address their needs and, based on revenue, most likely to provide business value. So, not only is sales and marketing alignment good for customers, it’s good for the company as a whole.
According to the 2015 State of Pipeline Marketing Report, marketers who perceive their alignment with sales to be “tightly aligned,” report ROIs of greater than 1.5x. That could be because alignment under revenue goals means the entire organization speaks the same language and is optimizing for the bottom line.
Instead of siloed teams, you now have a unified organization with shared goals.
Without a connection to revenue, marketers are guessing at the ROI of their efforts and allocating budget based on vanity metrics like pageviews and social shares. However, attributing those efforts to revenue paints an accurate ROI picture and makes it simple to decide where to spend money.
For example, say your company spent $10,000 to sponsor a marketing conference, $600 on flights for two members of the sales team to attend, plus $100 on meals. You upload the contacts into your CRM post event and track that two of the leads that did a demo during the event eventually closed as customers. The combined event touchpoint revenue totaled $20,000. You can confidently state that the event was a success because the ROI was nearly 2x. You spent $10,700 to make $20,000.
Additionally, revenue analytics help marketers prove their value. When it comes time for the company to allocate budgets across the organization, it is a much stronger statement to say the marketing department drove X amount of dollars in revenue for the company, instead of X amount of leads.
Eliminating wasted spend and investing in the channels and campaigns that work, is a driver of success for any company.
Lastly, revenue analytics are great for looking back and seeing what’s driving the most revenue, but they’re also good for predicting future revenue. If you know how prospects historically flow through the funnel and convert, you can more accurately predict how they will in the future.
Marketers can start with an end goal and work their way backward. How many customers do you need to close to hit your revenue goal? Now, based on historical conversion rates, how many opportunities would it take to hit that customer goal? How many qualified leads does it take to hit that opportunity goal? And so on.
This gives the sales and marketing teams monthly goals that will keep them on track to hit the yearly goals. It’s not perfect, but a prediction based on facts is far more actionable than a guess.
Analyzing revenue and attributing it back to the key touchpoints in a customer’s journey shows which efforts are creating the most business impact.
No longer is the marketing team restricted to lead goals. With revenue analytics they’re now able to prove the true impact of their efforts by tying them to revenue.