Why Revenue-Oriented Processes Matter (And How to Get Started)

Research suggests that when an average performing company moves to the top-quartile of performance, profits increase by 3-4 percent of revenue. Process is one of the four pillars of high performing organizations. All functions within your organization run on process and Marketing is no exception. Processes capture the sequence of interdependent and linked procedures used to convert some type of input (typically Marketing inputs take the form of data) into an output.  We categorize Marketing processes into two groups: processes designed to drive revenue by acquiring, keeping and growing the value of customers (externally oriented) and processes designed to improve profit and margin by reducing costs and increasing efficiencies (internally oriented).

These process categories are not two sides of the same coin. They are distinct and impact performance differently. Which processes should you address first? Research conducted by Roland T. Rust, Christine Moorman, & Peter R. Dickson found that improving revenue-oriented processes was statistically significant in positively impacting both financial and customer relationship performance.  Addressing cost processes, or trying to do both, had insignificant impact on financial and customer relationship performance. In fact, companies that address revenue-oriented processes demonstrated a one-year-ahead positive impact on ROA (return on assets) and stock returns.  Other research conducted by Deshpandé, Farley, and Webster, found that customer-centric organizations are the most profitable and that cultures that reflect a cost emphasis oriented toward efficiency were the least profitable.

Are You Focused on Processes that Affect Customer Behavior?

Revenue generating processes designed to affect your customer’s buying behavior are especially important to Marketing.  It is essential that these are quality processes. Easier said than done. The increasing complexity of the customer-buying process and the demand for the rate of product/service innovation is challenging Marketing and other parts of the organization to develop, implement, and consistently follow processes. Who should own your Marketing processes? Marketing Processes are the domain of Marketing Operations (Marketing Ops) within best-in-class Marketing organizations.

In many organizations, Marketing Ops has become synonymous with Marketing Automation.  But these are not the same thing.  Marketing automation is a type of Marketing Technology.  Marketing Technology encompasses applying methods, techniques, systems and tools for the purpose of running and doing the work of Marketing. Marketing automation platforms are technologies designed to reduce or eliminate human labor.   Email marketing is a prime example of Marketing automation.

Remember, process is the series of ordered activities to help you get something done.  Therefore, ALL work is process. You may not need technology to complete the process.  But you will ALWAYS need a process before you employ technology. There’s no value in automating a bad process, therefore, it is crucial to have quality processes. Trying to address and improve quality across all your Marketing processes all at once may not be feasible, so focus on the processes that affect customer behavior.

How to Design Quality Marketing Processes

Creating quality Marketing processes is a science.  These 6 steps come from the well-defined quality process management discipline.

  • Select the process. If you can only select a few processes to begin with, start with processes associated with customer acquisition, customer satisfaction, customer retention and loyalty. Save processes focused on reducing costs and increasing efficiency for later.
  • Identify and document the current steps associated with the process and any exceptions. All processes consist of actual tasks that must be completed for the process to work properly. These tasks are called process steps.
  • Map the process and define targets. We recommend taking a big-picture view of the process and focusing your mapping efforts on the first and second level tasks. It’s not essential at this stage to identify the systems/technology that support the processes and steps. It is helpful to include the roles involved in each task on your map.
  • Determine areas for improvement.
  • Communicate and deploy the process.
  • Manage the process. Develop and implement procedures to insure your people execute critical activities according to the process. It will be hard to realize the full potential of a process if it’s not consistently followed. Therefore, change management, and communication and process review plans are essential.

If your Marketing team is lean, or there is no one on the team with best practice process development expertise, or if you need a catalyst for change, or an objective point of view, consider bringing in a third party to help develop/re-engineer processes, ultimately speeding achievement of the revenue-oriented benefits. Choose a company that has:

  1. Deep expertise developing and mapping Marketing processes
  2. Pre-developed tools/templates/frameworks
  3. Experience working with other companies in your industry
  4. Knowledge transfer methodologies so that your team can implement best-practices for process development, change management, and communication going forward
  5. Relevant, satisfied customers as references