Use Your Revenue Funnel to Select the Right Metrics
Your revenue funnel dictates which metrics are best to use and a range of factors including size and scale, complexity, volumes, revenue per client, account-based vs. lead based focus will suggest different ways to measure your revenue impact.
Your Revenue Architecture – and revenue funnel – should dictate the metrics you use.
Marketers often seek to understand ‘campaign attribution’ to prioritize investments – yet, in complex multi-stage, multi-touch customer journeys, the impact of any one campaign or touch is difficult to define precisely. Should you attribute to the first campaign touch….to the last touch? The truth is that multiple influences and touches combine to contribute to the sale. As an example, if you are using an account-based marketing approach, you will focus more on account-level metrics like account awareness and penetration instead of just lead volume.
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Revenue growth requires focus.
Today, there are almost unlimited sources of data and opportunities to invest time in complex analysis. For most businesses, analysis can suck in time but have little business impact. Is an hour spent by a business owner exploring Google Analytics to uncover that she has a customer in Russia useful? Does using a social analytics package to discover that 60% of users are female (based on an algorithm that analyses names) drive a business forward. Probably not.
The Bugatti Veyron is a $2.4 million piece of technology. It can reach 253 miles per hour. There is no shortage of data that could be presented to the driver. There is only one thing that matters given that the objective is to accelerate as fast as possible. Engine revs – because this metric is the leading indicator for speed and also communicates engine damage risk potential. The rev counter is the center gauge on the console. In an environment where time and attention is limited, this is the driver’s main focus.
Businesses need to have the same laser focus on leading indicators. Social media may not directly create leads but it shows an ability to create community around an idea. The essence of a brand. Web traffic means nothing unless it converts but generally increasing traffic will lead to good things.
The big lesson – metrics are about communication not analysis. Communication makes people accountable, gives direction and motivates. The rev counter in the Bugatti makes the driver accountable for engine damage, tells her when to change gear and gives her a clear target range. This focus means 0 to 210 miles per hour in 27 seconds.
Are you focused on a few leading indicators that matter and motivate?