“Today’s business environment means that there’s greater crossover between departmental responsibilities, and more need for collaboration, than ever before”. For marketers, the need to break down silos with sales has long been the case, but the rise of digital technology, stretching growth targets and fierce competition means that shift is more important than ever before as revenue responsibility between teams shifts away from being solely a sales responsibility to a collective endeavour between sales, marketing and customer service.
But this trend affects the whole business. To remain competitive, all departments need to start working cross functionally, communicating more effectively and providing the best possible experience to customers.
This blog will explore what’s driven that shift, and it will take you through Ledger Bennett’s Revenue Responsibility Model. The model outlines the changing life cycle of a modern customer and the digitisation that needs to happen for sales, marketing and customer success teams to work together successfully and how the responsibility for accelerating revenue and growth sits with everyone.
What has driven the shift in revenue responsibility?
Organisational change is complicated. Changes in working culture; political influences; globalisation; changing business strategy; customer demand. All these variables have an impact on how we’ve got to this position.
We’ve outlined what we believe are some of the most critical changes that have led to the shift in revenue responsibility.
The competitive, tech driven and globalised nature of so many businesses mean that growth targets simply can’t be hit fast enough if sales, marketing and customer success operate independently of each other. Of course there’s always been some crossover, but the waters were muddy.
Reliance on technology
Utilisation of technology to scale quickly has been a critical part of this shift. As we’ll illustrate in the revenue responsibility model, marketing has largely been responsible for top of the funnel activity, which has become increasingly digitally driven, with sales and customer success teams having more focus on human touch interactions. Businesses have realised that too many human led touch-points drain resources and limit the speed of growth. Digitising as much of that process as possible is imperative to remain competitive, and that’s where marketing’s digital experience now becomes a critical part of digitising as much of the user journey from top of funnel through to sales processes and then on-boarding and building lifetime customer value.
Subscription based businesses
The increasing trend of subscription based businesses (largely in the technology sector) has also shifted the responsibility for revenue. Where customer value was defined by the size of the contract at closed won, in the case of subscription businesses, the LTV (lifetime customer value) is at its lowest at the point of closed/won. It’s then that the real work starts. Repeat purchases, continually delighting those customers and building their loyalty so they maintain their subscription for as long as possible then becomes the goal. And achieving that at scale requires, you guessed it, a sophisticated digital approach to customer service. And once again, marketing’s experience becomes paramount.
Chief Revenue Officers
The relatively new development of the Chief Revenue Officer role is gathering pace. That role centres largely around breaking down silos between teams, analysing and identifying new revenue opportunities and mobilising all teams to work cross functionally towards the same overarching KPIs. It’s a new way of working, especially for marketing and sales whose silo mentalities are widely documented, but it’s one that will fast become commonplace over the next few years.
There’s a growing expectation from millennial talent that teams and businesses operate cross functionally. It’s proven to improve employee retention and staff satisfaction, as well as an intrinsic belief in the culture. The real danger for businesses who aren’t ready for change is they’ll get left behind in the dirt, and at the pace of change we all now operate in there’s a very real risk that could happen quickly.
It can’t be ignored that although this shift was happening, the COVID-19 pandemic has certainly sped up how quickly businesses have embraced technology. Some have commented the pandemic has ‘levelled the playing field’ in marketing. That’s not entirely true as those businesses that had already embraced tech driven, non-siloed and flexible working cultures were arguably better prepared for the agility that the pandemic demanded. But it is probably a true statement for businesses who hadn’t. Of those, only the most agile and flexible will have the opportunity to thrive in the ‘new normal’.
The Ledger Bennett Revenue Responsibility Model
As it stands, the customer journey blends digital and human touches. Digital is largely delivered at scale at the top of the funnel, which is historically where marketing’s responsibility lay. Personal human touches were sales and customer service led.
The significant shift is digitisation of as many of those personal human touches as possible to make the customer journey consistent at every stage and easily scalable.
Revenue is grown from the entire digital experience being great – not just a campaign. You don’t stay with Uber on the back of an email, you stay because the end to end experience is seamless. From entering the funnel, through to purchase then the ongoing customer experience. The reality is end to end digital experiences, not tactical campaign execution.
The diagram above illustrates the journey as it stands currently in most businesses. Digital touches sit in the marketing remit at varying levels of responsibility split between the buyers journey and the customer experience. Digital activity is top heavy at the top of the funnel, human touches sit with sales and customer success.
Below you’ll see the new model of revenue responsibility. The buyer journey and customer experience are amalgamated into one complete user journey. Human touch points are still really important, but significantly reduced in the digitised model, streamlining and automating the whole experience meaning easier scaling and better customer experience.
Collaboration, joint KPIs and a customer centric focus will be key to making this model work. Businesses who successfully implement this approach to their customer journey will have a greater chance of success and high yields on long term customer value.