There’s an old saying that sales and marketing collaboration is not a problem, but a process. I subscribe to this maxim, and I’m seeing hopeful signs that my entire team is beginning to, as well. This shift and an even larger transformation have taken hold thanks in large part to several process and people changes we’ve made within Mitel‘s marketing function in the past month.
We’ve introduced some fundamental processes that will help us measure our effectiveness and efficiency. We’ve also restructured and resized the marketing organization while adding several new, talented individuals to senior marketing positions. Finally, we’ve sought to embrace new behavioral principles.
Process transformation: from activities to outcomes
The first major process transformation we’ve embarked on is the shift from activity-based marketing to outcome-based marketing.
Many marketing organizations are activity driven. They tend to operate with the intent of looking good by being busy, without necessarily focusing these activities on driving business outcomes. For example, suppose a senior sales leader or another business partner asks marketing to conduct a seminar or participate in a trade show. Ninety percent of the time a marketing function with an activity-based mind-set will simply execute the request. The intended outcome of the activity might be treated as an afterthought. More likely, the outcome would not be discussed or analyzed at all. This misstep would be followed by an even worse mistake: the failure to have any formal review of the marketing activity to determine…
1) The extent to which it achieved its intended business outcome; and
2) The lessons of continuous improvement (e.g., opportunities for efficiency gains) that can be extracted for the purpose of strengthening similar marketing programs in the future.
Outcome-based marketing turns the activity-based approach on its head, focusing entirely on doing good (for the business) as opposed to looking good (as a marketing function). The underlying principle of outcome-based marketing is that the result of any marketing program—be it revenue growth, channel growth, or improved customer satisfaction—needs to be identified and clearly defined.
In our case we’re striving to ensure that our marketing programs support one or more of our company’s strategic objectives. We then apply a “bounding condition” to that outcome with which we can later measure and manage our marketing performance.
So, when sales comes to us with a request for a new initiative, one of our responses might be, “Let’s back up: How much revenue does marketing need to drive and how much revenue does sales need to drive?” Once we determine the ratio, we might decide that we need to produce, say, five leads per account manager each month. That decision begs another outcome-based question: How much should a marketing lead cost to produce? After doing this math, we might determine that the marketing cost per lead should be $500 or less. That’s a bounded outcome.
Once you have your bounded outcome you can then determine what mechanism is best suited to produce it, in addition to being able to work through conversion ratios to know what top-of-the-funnel numbers you need to reach your outcome.
Although we’re still in the process of shifting our thinking as we begin outcome planning for the new calendar year, we’re making progress. In the past we likely would have said yes to nine out of 10 marketing program requests. But in the past month we’ve approved only two out of roughly 12 requests. When a sales account manager (AM) recently approached us and said that we needed to go to a specific marketing event, the conversation went like this:
Marketing: “What problem are we trying to solve?”
Sales AM: “It will give us awareness.”
Marketing: “As measured by what? What is the desired outcome? What strategic objective does it support? What are the bounding conditions? What are one or two other ways we might drive similar, if not better, outcomes in a more cost-effective manner?”
I’m simplifying, but only a little. In the past month we’ve passed on 10 similar requests purely because there were no defined outcomes, no bounding conditions, and no revenue goal associated with the proposed activity.
Although the shift from activity-based marketing to outcome-based marketing may seem straightforward, it actually represents a sea change. Consequently, it requires a journey of a couple of years to fully implement and make stick. This not only applies to demand generation, but also applies across the marketing spectrum, from innovation to market segmentation.
New people, new behaviors
In tandem with process changes, we’ve made a number of people changes. These changes relate to individual positions, as well as to individual and collective behavior.
As I mentioned in last month’s diary entry, we centralized all marketing staff and budget, and then doubled down in areas like demand generation and the web. The brand work now will begin in earnest.
To strengthen our newly established centralized structure, we’ve introduced several new marketing team leaders, including the leader of our newly formed North American field marketing team; the leader of our newly formed segment marketing team; the leader of our telemarketing team; the leader of our digital marketing team; a leader of EMEA/field marketing; and a cloud technologist. Additionally, we’ve expanded and refocused the roles of our corporate communications head and our director of marketing communications.
We also reduced our staff size by roughly 25%.
A more important people-related change concerns behavior. Identifying and promoting several basic behavioral principles has been important in establishing both the new structure and the customer-centric culture we want to instill in the team. These core behavior principles include the following elements:
- Customer: The customer and market will drive everything that we do
- Continuous improvement: This will be our mantra
- Fact-Based: Facts and data will trump opinions, desires, and points of view
- Performance: Progress will be evaluated and rewarded based on measurable results
These principles provide us with a standard vocabulary and help our people push back and challenge conventional assertions while they engage in objective conversations about growth.
Growing pains
As we put together our future marketing action plans, we also conducted a thorough outcome-based review of current action plans. That exercise enabled us to free up roughly 20% more funding, which we’ve reinvested in programs that our review shows deliver results.
These outcome-based discussions and reviews can generate some fairly tense conversations. The positive side of this is that these discussions, regardless of how much tension they create, are more focused on clear requests and objective results than in the past.
Like any process or cultural shift the key to success lies in communication. Leading from the front by demonstrating desired behaviors to your direct reports (so that they will do likewise to their teams) is also important—and sometimes a bit tricky, as I can personally attest to. For instance, I recently explained to my team that we needed to dramatically increase our user group membership. Before I could finish my point, I was greeted with a very astute question: “To drive what outcome?”
I paused, smiled, and—fortunately—was able to share a metric that I had in mind, one that demonstrated I wasn’t at all suggesting that we engage in any busy work disconnected from business outcomes.
We’re in the early days of our new structure, our new behavioral principles, and our outcome-based approach to marketing, but I’m encouraged by how well the entire team is responding.
