Three Keys To Leveraging Advances in Digital Media and Channels To Generate Revenue Outcomes
Marketers need to rethink their role in the modern commercial model as revenue growth evolves into a digital and data-driven team sport where resources are allocated to maximizing customer lifetime value at every stage of the revenue cycle. This is particularly true in businesses moving to digital, DTC, retail, product-led, and subscription revenue models where the emphasis is on driving omnichannel transactions, increased consumption, cross sell and upsell.
The budgets that marketers have traditionally managed have changed and shifted. Some – like traditional media and promotion – are a much smaller part of the growth equation. Others like owned and earned digital channels – and the content, systems, data and teams that make them run – have grown to command the lion’s share of both operating and capital budgets. Many of these growth budgets and assets are being shifted downstream to support value selling, digital commerce, loyalty, account development, and expansion activities. These activities are generally owned and managed by different functions. As a result over 90% of businesses are reorganizing their approach to managing the teams, channels, systems and data that support the revenue cycle according to the book Revenue Operations.
These dynamics have blurred the lines between marketing and their peers in sales, success, and service functions in the growth equation. Unless CMOs actively redefine their role to fit this modern go to market landscape, they risk being increasingly marginalized as curator of the brand, communications and media at the very front end of the revenue cycle.
How can CMOs redefine their role to contribute more value in the modern commercial model?
Look at the glass as half full. The shift to “4D” and omnichannel selling may have taken some budgets and responsibilities away from marketers. But it has also armed them with capabilities, media, technologies and channels that allow them to control the brand positioning, value story and revenue outcomes across every channel at every stage of the customer journey. “Marketers have an arsenal of social, phygital (physical plus digital), shopping, retail media, orchestrated customer experiences, AI and database tools and strategies that allow them to execute and extend their omnichannel business strategies to generate even greater revenue impact,” according to Randolph Browning, who leads Night Market, a division of Horizon Media that specializes in omnichannel and digital selling. Marketers need to take advantage of this to make themselves relevant. They need to play a bigger role aligning revenue teams, content, and processes around the customer. Those are areas where CMOs can add value and have credibility. That’s a big part of what Revenue Operations is all about.
To do that. they’ll have to overcome some entrenched perceptions about their role and financial contribution to the business. The CMOs and marketers I speak to are concerned that media has always been relegated to demand generation at the very, very front of the funnel. They continue to struggle to communicate and prove the value of their marketing investments to the board in terms of firm value and financial performance. There’s plenty of science to prove the financial value and contribution of their investments in the brand, media, sponsorships, ABM, AI and analytics. But the only scorecard that matters to the CEO, CFO and their C-suite peers is business outcomes. And the outcome that matters most to them is consistent, profitable and scalable revenue growth.
The reality is that connecting media and marketing actions to revenue is far less of a challenge in a modern commercial model. Today, every CMO has the opportunity to extend their impact through the entire revenue cycle – from awareness, through consideration, demand, transaction and beyond (into loyalty and expansion).
The media, channels, and technology are now there to do it. For example, progressive marketers are taking advantage of advanced paid, owned, and earned media channels to extend their impact at the consideration, demand and transaction stage of the customer journey.
Owned ecommerce and omnichannel sales have grown to dominate many product categories – from consumer packaged goods, apparel, electronics and hard goods – and increasingly business to business goods, services, subscriptions and SaaS solutions. Today, over 20% of retail sales now happen in digital channels through ecommerce – driving $6 Trillion in DTC sales globally, and even more omnichannel, upsell and cross sell transactions downstream.
Retail media and social commerce are among the fastest growing parts of the media mix because they allow marketers to extend their impact deeper into the revenue cycle by enhancing product packaging, placement, positioning and promotion and driving more sales transactions. Retail media will grow in North America to over 25% of total digital media spending ($100 Billion) in the next three years as almost every US retailer grows their investment in retail ad platforms like Amazon and Walmart. Social commerce – the process of selling products and services directly through social media – will drive $2 Trillion in sales globally in the next two years. Leading brands are shifting from traditional advertising to deliver engaging content, leverage influencer validation, convey benefits, simplify value propositions using platforms such as TikTok and YouTube Shopping.
In the book Revenue Operations, we push CMOs to go even further and assert more control over the conversations and communications that happen at every stage of the customer cycle. Value selling. Positioning against competitors. Addressing pain points. What’s lost on most CMOs over the age of forty is they can and should control every word that comes out of people’s lips, every RFP, every communication. “The most ambitious marketers are driving even deeper into the revenue cycle by weaving a “green thread” through every customer touchpoint, interaction and conversation along the customer journey,” says Chris Hummel, Co Author of Revenue Operations and a three time CMO. “We see marketers taking advantage of advances in sales enablement, engagement, readiness technologies and the ability of AI to proscriptively deliver, monitor and control in both human (e.g. customer support) and digital (e.g. chatbot) conversations.” For example, smart CMOs are using strategic response management platforms to govern every word in responses to RFPs, RFIS or email customer inquiries using AI, to ensure customer engagement is compliant, current, compelling, relevant and on brand.
Taking greater control of this “green thread” will help marketing leaders adjust to the realities of a more digital and data-driven growth model by aligning all stakeholders and connecting all company commercial assets, data, and business processes. It also creates enormous value. It yields a better customer experience, with consistent messaging at every interaction, and value being affirmed at every step. It eliminates margin leakage by reinforcing value at every stage of the customer journey. It generates higher returns on commercial assets by improving the utilization of expensive selling methods, training, validation content, and thought leadership. It extends and enforces value selling deep into the expansion phase of the revenue cycle – which is the primary driver of growth and engagement at most B2B companies.
How Can Marketers Take Action?
Weaving a “green thread” that generates revenue as the primary outcome of marketing and media programs is a matter of connecting the dots across marketing and sales and demonstrating the art of the possible to all of the stakeholders involved in the customer experience. Unfortunately, connecting the dots across the teams, processes, systems, channels and data sets that are required to execute revenue generating campaigns is not easy. “Organizational barriers can hinder many companies in maximizing the return on their revenue generating investments,” according to Peter Howard, who leads the Questrom Digital Business Institute at Boston University. “Marketing leaders can drive a shared core of expertise, tools, analytics and processes that support all revenue generating functions, including: sales, product development, pricing, customer service, and demand forecasting.” There are three practical ways marketing leaders can keys to leveraging advances in digital media and channels to better connect the dots across their go-to-market to generate more measurable and consistent revenue outcomes.
1.Take a “bottoms up” approach to connecting the dots by making an omnichannel campaign the focus rather than waiting for “top down” commercial transformation to happen. The most commonly used weapons for connecting these dots are “top down” commercial transformation and change management – organizational redesign, putting a “CXO” in charge of marketing, sales, product and customer success, reengineering commercial processes. Unfortunately, all of these require a significant amount of change management, leadership alignment, and time according to interviews we conducted with over 50 RevOps leaders. The fastest path to connecting the dots across the entire revenue cycle is to take a “bottoms up” approach that makes an omnichannel campaign the focus. Everyone in the organization can rally around a campaign because it is immediate, measurable, and provides customer feedback loops and learning data. Omnichannel campaigns get many stakeholders and functions involved – but with an urgency and actionability that strategy initiatives lack. Most importantly campaigns generate business outcomes today that can spark and sustain a process of continuous improvement in returns in the future. Plus, results beat business plans when it comes to justifying the investment for more aggressive change to the commercial model.
2. Start with revenue goals and work backwards to define, allocate and deploy the media and channels needed to achieve those goals. “Marketers get the unit of analysis and approach wrong when they plan, deploy and optimize their investments,” says Randolph Browning. “Rather than focus on how to optimally allocate and deploy their media to deliver downstream impact, they need to start by asking ‘how much revenue do we need to deliver” and work upstream. “Owned digital channels, Ecommerce platforms, retail media and social commerce allow marketers to control and own the revenue outcome, and use sophisticated marketing mix models, AI and integrated data sets to optimize the way they generate those revenues at every stage of the customer journey – from awareness, consideration, demand, activation and transaction – through to loyalty and cross sell.”
3. Rethink the capabilities you need from your teams and agency partners. Marketers need to invest in internal capabilities needed to support campaigns that drive revenue as a primary outcome. In particular, they need to build more muscle in integrating marketing and sales data, orchestrating omnichannel campaigns, and enabling more dynamic models for allocating marketing resources along the revenue cycle. They must also have people who can master the retailer, social media, e-commerce, and marketplace platforms that extend their programs into the transaction stage. CMOs must choose to either build these capabilities internally, borrow them from best in class partners, or reconfigure their RFPs to ensure their agency partners bring these capabilities to the table.
To help marketers understand these capabilities and rethink their approach, Night Market is applying the practice of a “Media Up front” to the emerging discipline of ecommerce to help brands get ahead of the trends in retailer, social media, e-commerce, and marketplace platforms, media inventory and customer dynamics shaping the modern marketing model. Marketing and media leaders are welcome to join the forum at Horizon Media Headquarters at 75 Varick Street in New York City on November 2 and 3. To learn more and request an invitation to this exclusive forum reach out to us or click below.