Lead [leed] noun
1. Prospect who has had at least three interactions with the company or has requested a demo: Marketing finally gave us some decent leads.
Establishing that definition last year at PGi—an audio, video, and Web conferencing business with a sales force of more than 500 account executives in the United States—fundamentally altered the working relationship between sales and marketing. “What marketing at PGi had been doing was purchasing lists, loading them into Salesforce.com, and sending them over to sales as leads. Then [salespeople] were disappointed with results,” says Liz McClellan, PGi’s new VP of field marketing. “The word on the street from marketing was, ‘Sales can’t close leads.’ Sales was saying, ‘We wouldn’t even call these leads.’”
PGi brought in McClellan at the beginning of 2013 to jumpstart change in the way sales and marketing operate, and that’s just what she did. “At the sales kickoff in January I got on stage and said, ‘I’m going to stop sending you shitty leads. I’m here to make you more money,’” she says.
Those are gutsy words to utter in front of a sales force. Revolutionary words. The revolution that McClellan incited at PGi is one that’s taking root in a growing number of B2B companies that have dug in and decided that new processes and technologies could help them cull a bigger percentage of wins from customers who research via the Internet, read white papers, and visit chat rooms before engaging with the suppliers that would eventually sell them their new telecommunications systems, heavy machinery, or consulting services.
Since the dawn of the corporation, marketing and sales have been like rival siblings, often attempting to ride bicycles built for two in opposite directions. Now market forces are providing a compelling reason for sales and marketing to pedal in tandem to the finish line. Call it field marketing, revenue marketing, or “smarketing” if you want to be cute, but the undercurrent is this: Most business purchasers are more than halfway through the buying process before they ever engage with suppliers, according to the Corporate Executive Board, so marketers have to work deeper into the sales funnel with better equipment if they’re going to send truly sales-ready leads to the sales organization.
That technology need not come from Adobe or Eloqua or Marketo, though their tools could be of help. What B2B marketing departments most need to be equipped with is a new game plan, say the movement’s pioneers. McClellan’s first move was to get marketing to “create a ton of content,” she says. “Get prospects into the top of the funnel and show them how services like ours could help. If they stayed with us, we showed them case studies and white papers, and then we started sending engaged folks to sales.” Far fewer than sales was accustomed to. “We used to send them 5,000 leads; now we send them handfuls.”
Such drastic culture change can hit sales with a “be careful what you ask for” smack in the face. McClellan says one sales executive asked if marketing would buy just one more list until things got going. McClellan balked. The dynamic of getting that tandem bike rolling produces fewer but better-qualified leads that will free sales professionals to make better use of their time and skills to close more business. “Trying to get from quantity to quality is what’s evolving B2B marketing,” says Greg Ott, CMO of Demandbase, which helps B2B companies focus on target accounts. “Stop marketing to companies that will never buy what you’re selling. It wastes too much of the sales organization’s time and resources if you’re marketing against prospects that will never become revenue.”
The revenue marketers
And, more and more, revenue is marketing’s focus. One afternoon in 2005 Debbie Qaqish was sitting in her office when her CEO walked in and asked her what she was doing about creating revenue. The question stunned the VP of marketing, so she did a little research and found out about marketing automation software sold by Eloqua. She bought a program, but soon found that there was no process or benchmarking in place for revenue creation or measurement. She called Eloqua and got in touch with its VP of professional service, Jeff Pedowitz, who helped her build a strategy. The next year Qaqish delivered a 20:1 marketing ROI. She had become a revenue marketer, as she called it. Today she is chief revenue officer of The Pedowitz Group, formed by her revenue-generation mentor to help other B2B marketers get some skin in the game. The game’s still a new one, but it’s fast gaining participants.
Qaqish spends a great deal of time on the road speaking at conferences; she asks every group of marketers she addresses if they have any revenue responsibility or expect to soon. “In 2008 maybe 10% raised their hands,” she says. “In 2010 it was 25%, and then in 2011 it was 50%.” Today 70% of the marketers she meets with say they’re being asked to create revenue by senior management. The reason: Technology can now track customers’ interactions with marketing’s campaigns deep into the funnel. “Automation used to be a competitive differentiator. Now it’s table stakes,” Qaqish says. “We can measure anything. We can absolutely show marketing’s relationship to revenue. We can even track competitive advantage—and senior management is looking.”
Perhaps, but most of them are still disappointed with what they’re seeing. A survey of some 230 senior corporate marketers released by the CMO Council in November indicated that B2B sales and marketing organizations were failing across the board at improving their pipelines through better customer intelligence. Those surveyed gave F’s (fewer than 20% saying yes) to their companies for real-time delivery of sales intelligence, customer data accuracy and depth, and frontline access to the right level of customer intelligence. Only 12% of executives said they had a well-integrated view of all customer interactions across the organization.
Perhaps that’s one of the reasons why, according to Accenture, 37% to 47% of sales representatives have failed to reach their quotas in the past three years.
In her recently released book, Rise of the Revenue Marketer, Qaqish observes that in the majority of B2B enterprises today highly paid salespeople are generating almost half of their own leads. Meanwhile, at companies that are in the early stages of establishing revenue-responsible marketing departments, salespeople are on the hook for only a quarter of their leads. The rest are coming in via the marketing department, leaving account executives to spend their valuable time working the pipeline.
Despite the 70% of Qaqish’s marketer audiences who say they’re beginning to move—or being launched—further into the sales funnel, the reality is that actual practitioners for now are few. If it’s not the expense and mastering of new technologies that’s impeding their progress, it’s internal politics or simply the painstaking process of disassembling and reassembling an organization.
“This technology is still so new. Adoption is still only in the 4 to 6% range,” says Adam Blitzer, VP and GM of Pardot, the marketing automation provider acquired by Salesforce.com this past June. “This has only been quasi-mainstream for a few years. People are learning it for the first time.”
Even more challenging than adopting new technology can be stitching together new contact points between the sales and marketing organizations and uniting them in a single revenue-generation mission. Prior to joining Adobe Analytics as its director of product marketing, Jeff Allen ran the marketing departments at two different enterprise software companies and experienced that battle firsthand. He says it’s one that is well worth enjoining for marketers.
“The marketing team lives between the assembly line and the sales force. They’re on the hook for not performing if sales doesn’t hit its goals. I spent three years listening to the VP of sales complain that he didn’t have a white paper, when half of the time he did have the white paper,” Allen recalls. “But when, as a marketer, I’m engaged with prospects digitally, I have ways to measure their activities. When you say I’m not doing my job, it’s hard to argue with my numbers.”
In fact, everything from email campaigns and display ad clicks, to webinar attendance and trade show engagements, to white paper downloads all become matters of record. “Marketing automation systems live in the middle of all that,” Allen says. “You come and interact on my site and I put a cookie on you, but I don’t know who you are. What’s cool is I can be writing that story until you fill out a form and then I can backtrack all that activity. That’s a powerful thing for marketers.”
The question is: How do these new pieces of intelligence transfer to sales? Along with new processes and technology, people are crucial ingredients in the new revenue marketing formula. “Buying tech is always easy; figuring out the people behind the technology is much more difficult,” Blitzer says. “It’s only as valuable as the people running it. You have a marketing automation manager and a lead generation manager. This spans both departments, so you need to have a scientific marketer who can understand both sides.”
This role may best be filled by someone outside of the marketing department. It can be someone from an inside sales team, Blitzer says. It can be someone from IT, or the CRM manager. The right candidate need only understand what marketing does in theory.
This is the point at which having a mutually agreed upon definition of a lead becomes crucial to ensuring that the right leads get from marketing to sales. “There are all kinds of challenges between these handoffs,” Allen says. For example, in between that handoff from marketing to sales in many B2B operations lie account development managers who qualify leads before sending them on. If marketing has no purview over the ADM’s activities, handoffs can easily be fumbled.
“I lose control if I don’t have control of the ADM. An ADM can be nonqualified or a rep who has to make a number,” Allen adds, noting that there is a way to track an ADM’s performance and make improvements where necessary. “There are metrics that can measure these things, such as cost per dollar of closed bookings.”
A single source of the truth shall set marketing free
The grease that can help sales and marketing pedal forward smoothly in tandem is transparency. “In the past the picture here was centralized marketing, separate from the sales organization. The transition of a lead or prospect to sales was a hard handoff,” says Aubrey Chambers, senior manager of Oracle Solutions Sales at Hitachi Consulting. “What we’re seeing with the sales and marketing cloud is the ability of our sales and marketing organizations to see the same data…and have the same view of the customer. We’ve gone from looking at our customers in single-variable snapshots to viewing them as a three-dimensional cube.”
In her book Qaqish identifies two stages in a marketing organization’s evolution from a demand generator nurturing leads to a revenue marketing team capable of filling the pipeline repeatedly and with predictable results. What distinguishes one level from the next is synergy and transparent processes. Chambers’ unit—which helps companies implement their newly purchased Oracle cloud analytics system—is transitioning to that higher level and finding that the going gets easier as each function become more productive.
For example, one of the greatest gains of marketing and sales collaborating through the cloud has come in the area of territory modeling and forecasting, Chambers notes. Based on marketing’s growing engagement with prospects deeper in the funnel, her analytics software this year projected a resulting savings of 1,500 sales team hours that could be reinvested in selling activities. “That’s 1,500 hours of analyzing spreadsheets given back to spending time with customers,” she says. “We’re using technology to facilitate better face-to-face relationships.”
Another important benefit of the technology, Chambers observes, is that it’s serving to improve relationships between sales and marketing. The shared view of the customer and the pipeline gives marketers ready access to the intelligence owned by salespeople, who are now responsible for feeding customer input back into the system. “We now have a single source of the truth,” she says. “We’ve opened our sales pipeline and customer relationship data so that it’s internally accessible by the whole team. One thing we found is that the thing about 60% of the buying process being completed before the first supplier engagement is not always true. It varies by vertical.”
New technology may make it easier to accomplish this unified view of truth, but it’s not a sine qua non. McClellan of PGi also uses more conventional technology tools to get the job done, sending an Excel report every Monday morning to sales, marketing, and finance of what marketing spent and what revenue it generated. In the first month after PGi’s new lead generation engine fully operational—an effort that took most of the year—her data showed that marketing-sourced leads produced $200,000 in revenue. “We’re transparent about what we do,” she says. “That enabled us to win trust at an early stage.”
And “early stage” is where nearly every marketing department sits in assimilating to the new era of revenue accountability. The learning may come quickly, even if the victories come slowly. But, like Liz McClellan, you have to start somewhere. She’ll find out how far she and her field marketers have traveled with sales on that tandem bicycle when she steps back on the podium at her company’s next annual sales meeting in January.