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Revenue Disruption: Game-Changing Sales and Marketing Strategies to Accelerate Growth by Phil Fernandez

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Go with the Flow: Measuring the Revenue Cycle

The typical sales executive does not lack for metrics reflecting the health of the sales cycle. Every CEO knows and understands KPIs like average selling price and win rate. But RPM is all about transforming the ways marketing and sales work, and work together. So it requires a new set of metrics that focus not on how well marketing or sales are doing on their own, but on the overall effectiveness and efficiency of the end-to-end revenue machine. This, in turn, requires a different and broader set of KPIs to monitor and optimize the health of the revenue funnel.

Strategic KPIs for revenue evaluate the overall performance and efficiency of the complete revenue cycle. They are the primary criteria by which companies measure continuous process improvement, and they can warn executives early on about potential problems or opportunities regarding future revenue. Some of these include:

  • Customer Acquisition Cost. The best way to measure the overall effectiveness of your revenue process is to measure total revenue (or bookings, or gross margin) generated, divided by the total amount spent on marketing and sales. The details of how to calculate this metric will vary widely for different kinds of businesses. But its high level objective is to net out investments in revenue across the entire marketing and sales cycle, and to match those investments against revenue earned in order to come up with a single overall measure of revenue productivity. ...

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