Marketo have pioneered an innovative “revenue cycle management” approach to integrating B2B sales and marketing that is enabling their customers to build better pipelines, shorten sales cycles and increase win rates. Phil Fernandez, Marketo’s CEO, recently shared his thoughts about how successful businesses the world over are coming to recognise the need for speed...
Phil has given permission for us to republish his article in full. As you'll read below, Marketo are a stand-out example of a high-velocity business themselves, having recently added their 1000th customer. Today they announced the opening of their EMEA Headquarters in Dublin with the appointment of ex-Salesforce SVP Fergus Gloster as Managing Director Europe.
Rapid Pace of Change Driving Business Velocity, Revenue Growth
By Phil Fernandez on April 12, 2011
"From the beginning, a founding principle of Marketo was to build a “high velocity business”. We booked our first real revenue just 3 months after starting the company. We built a product that customers could quickly adopt and achieve real ROI within a few days of starting use. And as more than anything, we have built a new generation “high velocity” customer acquisition process that has allowed Marketo to cross the 1000 customer milestone less than three years after we launched our flagship product (read the announcement about our 1000th customer).
Examples of high velocity business are all around us. Whether it’s the real-time supply chain that now gets my new iPad from Shenzhen China to Palo Alto in just four days, or the remarkably rapid growth of the web sensation Groupon (ranked by Forbes, CNBC and just about every other media organization as the fastest growing company ever), velocity is now the sine qua non of competitive, winning business.
With growth being the number one imperative for corporations the world over, the need for speed has finally started to accelerate the critical business functions that are responsible for creating and growing revenue. And while I applaud this much-needed velocity shift, in my view, it’s still not happening fast enough. Too frequently, the sales and marketing process still works at Mad Men-era speeds.
The slow-moving and frequently very inefficient sales function has long been a drag on the ability of companies to materially improve their revenue performance. According to research firm IDC, approximately 25% of sales’ time is spent on unproductive prospecting. A CSO Insights study found that 52% of sales reps never even achieve their sales goals. Even when sales and marketing collaborate to create and close leads, it too often occurs at a pace that feels glacial compared to the speed at which most other aspects of business are now operating.
Creating a High Velocity Revenue Pipeline
Against this backdrop, companies are asking themselves what they need to do to turbo-charge their sales and marketing processes to achieve velocity in their revenue pipeline. They are bringing a sense of urgency to this question because nothing is more important today than driving profitable revenue growth.
Companies are starting to leverage powerful new technologies to accelerate and strengthen the sales and marketing processes. These solutions dramatically increase transparency and enable businesses to feed the top of their sales funnel faster, and nurture prospects more effectively, at a fraction of the time it took in the not so distant past.
As I have said many times in this blog, all buying these days starts on the web and in social media. Often a prospect’s first “buying signal” comes from a web activity, like filling out a web form on a landing page. Yet more often than not, companies take days, or even weeks, to respond to a buying inquiry like this. (I make this claim based on a pretty deep data set from our own revenue operation at Marketo. Our sales reps will often register on a prospect’s site, and see how long it takes to hear back. Sometimes weeks!) Considering today’s hard charging and fiercely competitive business environment, it shouldn’t take a week to touch a new prospect, or a day to get back to her/him. How about reaching out to the prospect in five minutes?
Those sales prospects are moving faster, and are more demanding, than ever before. Having already done their research online – searching social networks and seeking out friends, colleagues, and other trusted sources – they are well armed with the information they need to get the answers they want. If you cannot respond quickly and with the requested information, your competitor’s site is just a click away.
When buyers are well-prepared, it changes their expectations about sales interactions. Buyers expect sales people to be immediately responsive. They expect less back-and-forth chit chat. They want facts, they want prices, and they want proposals in hand tomorrow. Relationship still matters in selling, but if relationship-building starts to slow down the information flow, buyers’ will lose patience very quickly.
And in this high-velocity world, buyers hate to repeat themselves. If they told you about themselves on a web form, or if they attended a recent webinar, or participated in an online discussion forum, they expect their sales rep to know this, and move on with the process. As a result, companies have finally realized that they need to manage their prospect interactions and touch-points much faster and in a completely coordinated way. They are now starting to look at sales and marketing as an interconnected process or cycle – one that needs to be managed in a holistic, systematic way that would have been unheard of just a decade ago. As you can imagine, these historic shifts makes the traditional and siloed sales and marketing paradigm look old-school by comparison.
This is nothing short of a revenue revolution, and it is taking hold with growing speed. With business change and innovation now occurring at an increasingly fast and furious pace, it has never been a more exciting time to be in sales and marketing. I believe the moment is exactly right to seize this opportunity to build a high velocity revenue growth engine at your company."
Is Your Business a High-Velocity Business?
I hope that some of Phil's ideas resonated with you. If you're committed to building a high-velocity business, you might like to assess your own organisation against the 10 key factors in our Business Scalability Matrix - and judge whether you’ve fully addressed all the key points in our Business Model Framework.