Ventana Research recently announced its 2022 Market Agenda for the Office of Revenue, continuing the guidance we have offered for nearly two decades to help organizations realize optimal value from applying technology to improve business outcomes. Chief sales and revenue officers and their associated operations teams are experts in their respective fields but may not have the guidance needed to employ technology effectively. As we look to 2022, we are focusing on the entire selling and buying life cycle and the applications that simplify and improve interactions throughout the customer experience.
We craft our market agenda using our firm’s expertise on business requirements and our knowledge of technology vendors and products. Through our continuous market research, we offer insights and best practices to both the lines of business and IT as well as across industry verticals to help every organization reach its maximum potential.
For 2022, we have added a focus on the broader context of revenue management and the best practices and technology to help revenue-focused organizations address strategy, planning and operations. But the unique requirements for commercial, legal, revenue and sales operations teams must be addressed by the specific selling and buying processes of the organization. With the rise of digital commerce and subscription models, the primary focus on new business is shifting. Considering the cost of customer acquisition and the importance of customer retention and expansion, the entire customer experience is of vital importance in building and sustaining a business. These processes require specific technologies - a 360-degree view of customer and revenue channels, digital buying technology, pricing optimization for managing business-to-consumer models, and configure-price-quote software to adjust contract terms based on the configuration of products, as is often found in business-to-business organizations. We will also focus on the subscription management experience - a critical part of the customer journey in many industries.
Improving outcomes are key to revenue effectiveness, and emerging applications and tools provide the path to achieve that goal. New applications and tools designed for salespeople and revenue teams not only help manage revenue-focused organizations but also help selling channels to sell more effectively. Reflecting this, our Office of Revenue practice addresses six focus areas: Digital Commerce; Revenue Management; Sales Engagement; Revenue Performance Management; Subscription Management and Partner Management.
In the world of digital commerce, customer and product experiences are top differentiators. Digital commerce technology enables organizations to engage customers through any digital channel - the web, mobile apps, text, voice-activated “agents,” video and social channels - and deliver an optimal experience. Conversational computing and hyper-personalization are transforming customer engagement, and a digital platform renovation may be necessary to optimize customer and product experiences or risk lagging behind competitors. We assert that by the end of 2024, two-thirds of organizations using digital commerce systems will conclude they need to abandon existing technology deemed ineffective in supporting engage customer and product experiences. Moving beyond consumer purchase, we will also look at how B2B selling and buying are increasingly using similar B2C digital approaches to mirror the digital commerce experience. We will conduct new Benchmark Research and Value Index research in 2022 to identify best practices and assess and rate technology vendors’ potential to help meet evolving digital commerce needs.
With the rise of subscription and usage business models as well as digital commerce, organizations are increasingly recognizing that the typical focus on the primacy of new-customer- business needs to change. Given high customer-acquisition costs, both customer retention and existing customer expansion are of equal importance. And with the exponential growth of data - not just generated internally through customer-relationship management systems, order management and back-office systems, but also third-party location and firmographics - technology can be used to help identify, navigate and execute new paths to revenue. In addition, sales, marketing, and customer service will need to plan and operate together to ensure all departments are aligned on revenue goals. We assert that through 2023, the revenue management software category will evolve into the essential suite of applications and platform designed for a CRO and supporting organizations to effectively optimize revenue across all channels. We will conduct new Benchmark Research and Value Index research this year to identify best practices and assess and rate technology vendors’ potential to help meet emerging revenue management needs for operations and performance teams across all aspects of the buyer and customer life cycle.
With a recognized decline in quota attainment, a shift in balance to buyers through internet-based research capabilities, and changes wrought by the pandemic, vendors have been focusing more on how to help sell and not just on managing sales. Sales engagement facilitates intelligent interactions and execution by sales professionals to achieve optimal revenue outcomes. We assert that by 2024, the category of sales engagement technology will evolve from sales enablement and focus on digital selling effectiveness to optimize revenue potential. After a hesitant initial adoption, systems that use artificial intelligence (AI) and knowledge management technology are starting to provide prioritized insights that increase sales effectiveness. Organizations should invest in sales enablement systems designed to focus on salespeople and not just technology that manages sales organizations. We will conduct new Dynamic Insights research in 2022 on the challenges and potential of sales engagement.
Revenue Performance Management
Revenue performance management (RPM) is the natural successor to sales performance management (SPM). RPM enables revenue and sales leaders to align strategy and planning to optimally engage all types of accounts and territories. Whether supported by direct, partners’ or self-service digital commerce channels, the management and optimized use of quotas and compensation should be used to achieve the best possible outcomes. In addition, we will reflect the changing focus from solely new business to include those involved in customer retention and expansion. Managing revenue performance requires that organizations effectively plan revenue processes and resources; it is critical that planning be collaborative to optimize engagement and boost revenue performance. Mobile devices can provide instantaneous updates and give sales professionals and managers a straightforward view of performance to enable more effective management. We recommend that organizations adopt RPM. We will have our Revenue Performance Management Value Index in the first part of 2022 and have started new Benchmark Research.
Subscription management involves processes and applications designed to manage the subscriber experience - from the first digital touch to subscriber engagement and onto billing. Organizations can more effectively engage subscribers through technology that enhances the subscriber experience, automating subscriber operations and financial processes. In addition, many B2B companies are shifting to a subscription business model to remain competitive. We assert that by 2024, the division of the market for subscription management software between digitally native and mixed business models will converge to platforms that can provide for both. For these companies, multiple customer engagement models, including usage-based pricing and billing makes more sense, imposing new needs on vendors to support pricing models that address individually negotiated contracts. We will conduct new Benchmark Research and Value Index research in 2022 to identify best practices and assess and rate technology vendors’ potential to help meet emerging subscription management needs.
Partner management involves processes and applications designed to support businesses that bundle or resell other providers’ services and products. Although not new, this is a growing model where an ecosystem of vendors supplies customers with products and services of their own or from others. This necessitates new onboarding processes, revenue allocation and service-level agreement monitoring and reporting. Through 2025, a new generation of partner-management applications for onboarding, SLA management and origination and partner payments will replace existing ones that only focus on indirect channel selling. We will conduct new Benchmark Research in 2022 to identify best practices and assess and rate technology vendors’ potential to help meet emerging partner management needs.
Every revenue-focused organization, no matter how many employees or the size of its revenue, has an opportunity to significantly improve the selling experience. Enhancements to underlying revenue processes and technology can have an immediate impact on top- and bottom-line results. Determining your path forward in 2022 requires an effective strategy and knowledge of the technology you need to improve or add to your existing portfolio of investments.
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