When it comes to the crunch, each team within an organization is measured by one key metric: revenue.
Like it or loathe it, revenue figures spell out in black and white the level of influence a team has had on sales figures and the business bottom line. Product marketing plays an equally fundamental role in generating this revenue as other teams like sales and marketing.
Yet, it seems, the best efforts of PMMs are still escaping the attention of some C-Suite executives. When we asked about the value of product marketing as part of our recent C-Suite report, just 5.8% of respondents identified generation of revenue from both new and retained customers as a key responsibility of product marketers.
Sales enablement assets offer invaluable support for sales teams in their efforts to convert leads to customers. Competitive intelligence supplements the development of new and existing products. Those are two examples of how product marketing plays a vital role in bringing revenue into a company.
PMMs are vital cogs in a finely tuned economic machine and it’s about time we were recognized for it.
To drive our point home, we're gonna focus on a couple of key areas:
- How to tie PMM to revenue
- Tips from the experts
Methods for tying product marketing to revenue
While the task of tying product marketing to revenue is by no means impossible, it’s become tougher to consolidate the relationship between product marketing and quantifiable KPIs.
Why? An increasing number of firms are shifting their emphasis away from vanity metrics such as number volume of leads or Marketing Qualified Leads (MQLs), instead of switching their focus to marketing-led sales opportunities and marketing-attributed revenue.
That said, there are a number of quantitative measures that can tie product marketing to revenue, including:
- Form fills/enquiries
- PMM led content production
- Upsell and cross-sell
- Customer retention and renewals.
We surveyed over 500 product marketers to identify which quantitative measure is given the most attention when attributing product marketing to revenue. From the four options above, there was a resounding favorite.
Almost half (44%) said they look at customer retention and renewals as their go-to-measure. One-quarter of respondents (24%) pay attention to upsell and cross-sell, while a further 18% check out form fills and enquiries that’ve derived from product marketing activities.
Only 14% said they measure PMM-led content creation against the generation of revenue.
A word (or two) from the experts…
In this instance, customer retention and renewals emerged as the most popular quantitative measure used when tying product marketing to revenue. But as we’ve alluded to previously, this doesn’t necessarily apply across the board; what works for one product marketing team may not work for another.
Check out what a collection of PMMs had to say about their chosen methods when it comes to tying product marketing efforts to revenue. 👇
“SQO win rate (segmentation, differentiation, enablement), market differentiation awareness (unaided & aided recurring market research study), product launch success KPIs, and adoption rate of critical “sticky” features.”
Chris Walker, CEO at Refine Labs
“If you have better product-market fit than competitors and you can communicate that effectively in sales and marketing your win rate should increase. These are core product marketing initiatives.”
Trenton Romph, Director of Marketing at Clozd
“Content production is just an activity measure. Form fills - demand gen will fight you for that and you could generate leads but not convert them (either due to poor quality or internal issues).
“In SaaS, I'd say activation and adoption metrics for new products, expansion revenue or retention for the install base (especially within a specific time frame post-launch 90-days after launch, for example). If you have message-market and product-market fit the metrics oriented toward those to indicators are more likely to help you attribute to product marketing, in my opinion.”
Ashir Badami, Director of Product Marketing at Criteria Corp
“Product marketing’s focus should be 'Positioning'.
“Here are some questions product marketers can ask themselves:
1) How are you working with demand teams to test solution/product positioning?
2) Are you testing persona-based messaging in your campaigns?
“This route can help product marketers tie their efforts to revenue and ROI ultimately.”
Rahil Anand, Audience and Marketing Personalization at VMware
“It depends on your own strategic goals. I own most of the website so demo requests (that then turn into revenue) are a consistent metric.
“Expansion/retention is also a biggie; I think this is a great metric especially for anyone focused on product growth. But ultimately I’m looking at closed revenue as my north star as everything levels up to that.
“You can also look at content that’s influenced revenue if you have a CMS like Seismic or HighSpot!”
Kerry Wheeler, Product Marketing Manager at Quorum
“I think you have to tie at least one of your KPIs to the outcome of a sale - I like SQO.
“Upsell and retention involves many more people, in my opinion. Form fills can be skewed and lead to fluffy metrics your sales leader will scoff at.
“I would rather the VP Sales and I be on the same page when it's time to report numbers; I also think the diversity of opinions on what’s considered to be the right approach might come from how teams are structured.”
Damian Aguirrechu, Fractional VP of Marketing and Strategy at Direct Drive Consulting Ltd.
“My team is segmented by ICP and each person is measured on two things:
1. Overall revenue growth within their segment (and for me, growth within all ICPs, ignoring any growth that happens outside of those segments), and
2. Pipeline generated for 1-2 top new products targeted for their ICP each year.
“To be clear, we have way more than 1-2 products to launch each year for each segment, but I want them spending the majority of their time on the ones that should make the absolute most impact to their buyers.”
Caroline Sutton, Senior Director of Product Marketing at Bandwidth, Inc.
“Product marketing's goal is to drive awareness and demonstrate 'reason to try'. Ultimately, it’s activation and monetization that matters. Assuming the product proves useful, the next goal is to retain, cross/upsell and refer new business, demonstrating 'reason to stay' and 'reason to share'. These actions should tie revenue with marketing too.
“Any of these metrics, driven by marketing effort, that translates into monetary value indicates impact. Monitoring cohort behavior and A/B testing helps separate organic from marketing influenced behavior.”
Sheldon De Sousa, Product Marketing Professional
“Have PMMs work directly with AEs and CSMs on ICP accounts. Each team is responsible for the initial sale, retention, upsell/cross-sell, expansion into new divisions, referrals to new business, etc.”
John McTigue, B2B Customer Journey Architect at The Customer Journey Mastro
PMMs will understand more than anyone: the function isn’t limited to product marketing itself - it’s cross-functional and spans the breadth of the organization.
The key? Embrace proactivity and shelve reactive practice in your bid to understand and measure how your team’s output is directly contributing to the revenue at your company. The more measures you put in place and the more attention you devote to the process, the easier it’ll become in the long run.
You can quote us on that. 😉
Want to learn more?
Needing to measure your product marketing success is a huge part of the role. After all, how are you going to identify what works and what doesn’t without metrics and data to back it up?
Our Metrics Certified: Masters course will give you the knowledge and confidence you need to measure the impact of your work and continue driving, not just your product and department, but the entire company towards success.
By the end of this course, you’ll be able to:
🎆 Use formulas to correctly measure key metrics.
💪 Identify which metrics you should track for each deliverable.
👀 Understand how your work can positively influence these metrics.
🔦 Relate your KPIs to your OKRs and confidently report on the impact your function has on the business.
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