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ECT News Community   »   CRM Buyer Talkback   »   Re: The 3 Pillars of Revenue Performance Management

Re: The 3 Pillars of Revenue Performance Management
Posted by: Denis Pombriant 2011-06-08 12:33:08
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A couple of weeks ago, Marketo announced its research-based belief that its form of revenue performance management could help grow global GDP by $2.5 trillion by 2015. I love it when emerging companies talk about big plans this way. It reminds me of the young plumber who upon seeing Niagara Falls for the first time says, "I think I can fix it!" But there's something to this proposal that ought to be taken seriously, and when you talk about trillions of dollars, you are presumably talking seriously.

RPM or Profit?
Posted by: JonathanHornby 2011-06-08 13:30:02 In reply to: Denis Pombriant
Sounds plausible, but I am more interested in profitable revenue growth than merely "revenue growth".

We all tend to get fixated over revenue or sales numbers, but revenue does not equal profit.

I wonder how many companies question their profit margins/ assumptions at a customer or transaction level?

If they are using standard cost accounting techniques, they could be way off the mark. It then becomes garbage in, garbage out when you think about segmentation, treatment strategies and optimization.

In our experience, 20% of a firms customers could be destroying 400% of the profit quoted in their P&L. Sad part is that few know who those 20% are. What if they are in your premium segement? What if they are spending lots of money with you? Would you know they are unprofitable?

And that's before we even think about the value of influence and collaboration, which could be many times the value of an individuals transactional profit.

It's messy, but at least people are now starting to consider it. We (SAS) asked the EIU to explore this in "Re-envisioning customer value" - people are starting to ask the right questions, but we have a long way to go - even though the technology exists to help.

For RPM to truly deliver, I believe customer value needs to be re-defined - get it right, and you can leverage the various analytics referenced to make a positive impact on GDP - probably more than the Marketo report claims.
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