Is martech in a revenue bubble and how soon will it burst?
Fasten your seatbelts. This article will be hotly debated.
The martech industry is actually in a revenue bubble, like the dot-com bubble of 1995 and the housing bubble of 2008. And there’s no telling how soon it will burst.
The revenue bubble happens when go-to-market teams, and the technologies they use, organize as one central group with one goal: Sales. The role of the chief revenue officer and the function of revenue operations emerged from this.
The problem? What started as a rallying cry for marketers to drive more impact has sadly devolved into a sea of sameness, with business brands that are eerily identical in how they look, sound, and engage customers.
Before you get too upset, hear me out.
As a career B2B marketer, I’ve always been a champion of revenue. One of my favorite books is “Revenue Disruption” by Phil Fernandez, co-founder of Marketo. Every activity should lead to a sale! That was the motto.
But the more I worked in marketing, the more I started to see that some of the best companies didn’t focus on revenue alone. There was more to their success, which we’ll explore in this article.
Without revenue, what’s the point?
Here’s why the revenue movement became popular. Marketers were tired of being treated like sales assistants. They were sometimes referred to as the arts and crafts department. I’ll admit, the revenue movement did a fine job in changing this perception.
The problem? The focus on revenue is short-term.
And I may be biased, working for a company that obsesses over customer experience at the expense of short-term profits, but let’s look at both sides.
Three powerful, durable spears pierce the revenue bubble. They are community, product-led growth and brand.
Community is not, and never should be, about revenue. And while you can tie some attribution to community-led efforts, trying to extract money out of a community is inauthentic. Customers can smell inauthenticity. We’ve often seen members abandon communities that try to milk them for every last cent. We’ve also seen communities help skyrocket companies to become market leaders. Marketo and Salesforce are great examples, but there are many others. There are different skills and competencies required to grow a community, which revenue-focused operators may lack.
2. Product-led growth
Product-led growth refers to creating such a good product experience that users refer others, which becomes the primary method of adding new customers. The focus here is obsessing over user behavior and feedback, and implementing quick changes. A short-term focus on revenue (closing big deals) can be counterproductive to this effort.
You’ve probably seen this first-hand in your organization. A team has dozens of planning and negotiation meetings with a vendor, only to discover that employees have already started using a different platform they paid for with their credit card.
That’s not to say that enterprise sales and field marketing are irrelevant. Both can drive tremendous growth and awareness. However, product-led growth is tangible proof that there is more to the story than mere revenue.
Branding is the most obvious contradiction to the revenue movement. It’s incredibly difficult to attribute deals to branding. You can track branded search terms or ask, “how did you hear about us?” but much of the influence that brand has occurred without our knowledge. Branding is what happens when a buyer needs something at the moment, and your company is top of mind. Brand transpires when a buyer doesn’t make a rational decision based on facts but emotion.
For example, I selected my car insurance provider solely because I liked the jingle “Nationwide is on your side.” Such a good tune! As a final example, take 10 seconds and think of your top three favorite companies. Got them? Now the question: Do you think they got to where they are today by aligning around revenue?
The problem with every employee having the goal of revenue
The problem with everyone having a revenue goal is that other critical aspects, such as customer experience, can fall to the wayside. Not to mention the historical examples of immoral company leaders who focused on revenue above the customer and drove the company’s reputation and stock price into the ground.
But let’s take a practical B2B approach. Should graphic designers be given a revenue goal? What about corporate communications? What about legal and those who protect the security of customer data? And to take it a step further, if those roles do not have revenue goals, does that mean that those roles are unimportant?
Here is where the revenue bubble begins to burst because if everything should be about revenue, nothing else matters.
But other aspects of business do matter. And successful brands know that very well.
How to stop the revenue bubble from growing and bursting
The solution to the revenue bubble is tension. Healthy tension, healthy debate and a natural, productive conflict that forces one side back into balance when it gets out of line. Should there be a revenue goal? Yes. But there should be a customer experience goal set in parallel. Customer experience can be measured by satisfaction, NPS, engagement, opt-out, and other indicators that show customers like (or dislike) your brand.
Should there be a new sales goal? Of course. But in parallel, there should be a community-growth goal, a branding goal and a product goal not tied to sales.
Balance your revenue goals with the customer experience and balance sales with your brand.
To sum up, while companies have benefited from the alignment that the revenue movement has created, they need to be careful not to lose sight of the less measurable aspects of the business that can differentiate a brand in the long term. And while many operators are looking to revenue as the single answer to solve their business problems, the reality is that business, like life, rarely boils down to a single thing.
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