Will Scully-Power

Why tie marketing compensation to revenue?

I thought this piece from Christine Crandell was great, and is shaping how we as marketers will be measured in the very near future.

Today, most Marketing compensation plans are comprised of a base salary and a performance bonus. However, in well-aligned companies performance bonuses are comprised of two elements; a quantified marketing-generated revenue objective and a longer-term qualitative marketing goal.

Marketing team members need to recognise that directly producing revenue is a central part of their job, though not their only responsibilities.

The Marketing roles which have the greatest direct impact on revenue are product marketing, sales/channel enablement, demand generation programs, field marketing and channel marketing and their compensation plans should reflect those responsibilities.

As a result, performance plans should include metrics specific to that role and to each individual team members’ function in it. The metrics I use in developing performance plans are:

Marketing Role Alignment Metrics
Qtr/Qtr and Yr/Yr
Product marketing
  • Pipeline and close rate by product line
  • Revenue booked
  • Margin by product line
Field marketing
  • New lead follow-up days outstanding by AE and territory
  • Field-produced pipeline production
  • Associated close rate by region
Marketing programs
  • Demand generation conversion ratios
  • Marketing-produced pipeline production
Sales training
  • Percent of sales force current on training
  • Role-based proficiency scores on key soft skills (i.e., discovery, negotiation, etc.)
Sales/field enablement
  • Response time to field requests
  • Sales force satisfaction and effectiveness scores
Customer Advocacy
  • Renewal rates
  • Customer satisfaction scores
  • Percentage of customers serving as references and evangelists

Marketing’s contribution to revenue goals, as reflected in performance bonuses, should be both measurable and time bound.

For example: “produce leads that result in $20M in Marketing-generated pipeline each quarter,” or “deliver sales training that shortens the new hire productivity ramp so they close their first sales opportunity within 90 days of hire date”.

Full Story: http://cli.gs/rd8AXj


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