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Marketing invariably gets the blame if the product launch doesn't hit prescribed revenue targets. How should we in product marketing set our launch revenue targets and validate our sales team's forecasts?

3 Answers
Rowan Noronha
Rowan Noronha
Showpad VP Product, Partner & Content MarketingOctober 13

1/3 of new product launches do not meet their revenue targets. Why? Combination of poor co-planning by sales and marketing, aggressive competition, changing buyer trends, in addition to being overly optimistic. Listen, I'm not saying to be pessimistic or conservative, but be realistic with your launch aspirations against your resources, budget, capabilities, as well as your market, competition and buyer dynamics.  


One way to improve your launch revenue target forecasts is to incorporate independent reviews from outside sources to ensure an objective, rigorous and unbiased market perspective.


Your product marketing and product management teams (along with your market and competitive intelligence teams in larger companies) should collectively come to the table with quantitative assumptions. These include the number of prospects in the target market, the number of prospects your sales resources can engage with, the average length of a sales cycle, and their sales team's ability to convert prospects or existing customers, and average deal size. Within my company, channel partner sales, upsell conversion rates (esp for products with free trials), limited-time price discounts, existing revenue cannibalization and other contributing factors need to be analyzed alongside your sales leaders. 


However, despite all this analysis, teams struggle to take a realistic outside-in view on their forecasting process. The TAM/ SAM might be too large if you failed to segment down to the target buyers broken down by company size, industry, geo, job role or persona. Your estimated conversion rate is always too high, or your sales cycle length too low (esp if the product is perceived as complex by your prospects). 


As such, build in time to validate your forecasts and assumptions with objective 3rd party analysts, influencers, customer advisory boards, channel partners, and your peers.

These folks regularly speak with your buyers and potentially use your competitor's products, as such, allowing them to provide you with a complete picture of the market. Further, analysts are trained to develop forecasts, provide forecast assumptions, analyze hypotheses, and probe for flaws.

1597 Views
Jack Wei
Jack Wei
Sendbird Head of MarketingMarch 10

This depends if you're a B2C or B2B company. 

For B2C, you're likely embarking on a product-led growth strategy (if not already). And in this case you should be on the hook for hitting prescribed revenue targets... because you have direct control over the purchase experience.

For B2B, instead of hitting the revenue target set the right pipeline target 30, 45, or 60 days post-launch (depending on your sales cycle). This will force you to think of an integrated campaigns plan at launch, across paid, social, ABM, press, webinars, events, etc. and mobilize all relevant marketing channels in order to drive pipe. Work with your demandgen colleagues to set the right targets here, and work with your sales leaders for proper enablement. In a B2B setting, PMM is not going to have direct impact on sales but you can set the right process & plan to impact.

568 Views
Ashley Faus
Ashley Faus
Atlassian Head of Lifecycle Marketing, PortfolioMay 24

Two fundamental issues with this blame game:

1) A product or feature launch and a revenue target are two different things, with different time horizons!

2) Marketing should have a seat at the table when the revenue forecasts are created. They shouldn't be "receiving" "prescribed" revenue targets and forecasts from sales.

Let's dive into each issue:

A launch is generally for a new product or feature, which means that there's less precedent for adoption and revenue. Yes, we can look at historical benchmarks, adoption rates for current features and products, and the predictions made prior to launch. But ultimately, those are predictions about signups, upgrades, cross-selling, etc. That's different than an overall revenue target. You might see that signups are strong, but it takes longer than expected for an account to upgrade to paid seats. A launch might have different goals around attracting net-new customers or retaining existing customers. Both result in revenue, but the time horizons differ. And revenue builds over time for SaaS companies (the mix of net-new customers, account expansion, upsell or cross-sell, and churn), so the revenue "at launch" is not indicative of the revenue over time. Set time horizons and track the trends to make changes to the strategy and tactics, but you need to see how it performs over time.

The sales forecast is usually tied to existing pipeline, with the likelihood of closing the deals in the pipeline. While most of these forecasts turn over at the end of the quarter and/or fiscal year, realistically, it's a moving target. If a deal doesn't close in Q4, it's still possible for it to close in Q1, so the "forecast" in Q1 might start higher because of lagging deals from Q4. This has little to do with launching a new product or feature. And if that deal falls through, the team would miss the forecast, but potentially make up for the revenue with a new deal. Marketing should have a seat at the table for these discussions, and leaders should set reasonable targets for quarterly quotas and long-term revenue. The revenue is a mix of factors over a longer period of time, and a single launch shouldn't "miss" in a short time period after the launch. Sales leaders should not be telling marketing about revenue targets. Leaders from across the business should come together to set the targets based on growth trends, investments in key areas, market insights, etc.

1866 Views
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