Sales process – the missing ingredient for marketing ROI

Most marketers in B2B enterprises have never been trained on sales process. If I were running your marketing or sales organization this would be the first thing on my agenda. Why? Because without understanding sales process, marketing is essentially set up to fail. How can anyone improve or contribute effectively to something if they don’t know how it works. It’s like setting up your manufacturing to produce blue widgets but not telling your suppliers what parts you need for your particular widgets. So they ship you tons of blue stuff and hope that somehow it all works out. That’s the position, to one degree or another that most enterprise marketing organizations are in even at some of the most advanced process-centric companies in the world. Largely because they have chopped up the customer creation process into a collection of departmentally independent activities. 

In a large enterprise with many products lines, business units and segments, there are likely to be a number of different sales processes. Marketing and sales resources should be aligned against these processes horizontally. This is the key to making the shift from a siloed command and control organization to a responsive, integrated customer focused one. Not only is it important to design around sales process, which should be designed around the buyer’s journey, but it is important to design for change. Markets are dynamic and sales processes change.
Marketing automation systems, especially those that are integrated with the sales force automation or customer relationship management system, have begun to provide marketing with some clues to sales process. At least they can see what happens or does not happen when they deliver something to sales. But the data does not always explain why, and that’s the critical part. Marketing needs to understand very specifically how Sales operates in order to optimize around customer outcomes. The alternative is for marketing to optimize around departmentally focused KPIs like the number of MQLs (ugh), or SALs, or worse vanity metrics like hits, sentiment, likes, etc. These metrics are useful indicators for some marketing activities, but not as business drivers for marketing investment.
Aligning marketing and sales around sales process is the first step to formulating an enterprise customer creation process that extends across all customer touch points, including: billing, fulfillment, service and support. At each stage of maturity, marketing, as well as all the other customer facing departments, gain much greater visibility and accountability to the whole process and its connection to corporate objectives for growth, market share, and margin. This is all necessary for a true picture of marketing ROI.
Your action items:
  • Marketers: lobby your top executives to make regular sales process training for marketing a priority. 
  • Sales executives: demand that marketing know how the different parts of your sales force work so they can more effectively develop prospects and serve customers. 
  • CEOs: get smart about your customer supply chain by applying the same level of due diligence and process discipline to it that you have to your product and services units. As a result, you will make much more effective use of marketing investment and be able to hold your whole customer facing team accountable for its contribution to your strategic objectives.

Connectedness – The Missing Metric for Sales Enablement

Enablement programs for B2B sales and channel resources tend to focus on activities – trainings, certifications, portal visits, most popular assets, most posts per person, ratings, etc. These are all indicators suggesting enablement resources may have been consumed. But they don’t do a very good job of measuring one of the most important objectives of enablement – changing behavior. New platforms that integrate publishing, process, and social capabilities are making it possible to track behavior patterns in the context of specific business processes. Hidden in this data are the daily habits that differentiate our best direct and indirect sales resources. Sales enablement professionals need to find this data and share it with the rest of their sales audience.
This is a particularly crucial for the on-boarding process. Regardless of whether you’re training a new/replacement sales rep or bringing on a new partner and their employees, connectedness is a key metric that you need to capture and track. It is the only way to continually optimize behavior. You can capture financial and operational data with most of the content management, CRM, and marketing automation technology out there. But these systems are not explicitly designed to capture patterns of behavior. Even those with social networking capabilities are not being used effectively in this regard.

Sales enablement professionals need to use social networking as a basis for propagating best practices. The measurement should span not only person to person networking, but also track community membership, links to all manner of resources from internal portals, as well as communication with subject matter experts, peers and mentors. To be most effective, this capability should be deployed within a process driven platform for sales enablement, as opposed to an old school portal based on a publishing model. These new platforms go beyond simply providing access to content. They are process driven and deliver content, sales plays, transactional capabilities, and more all in the context of the company’s go to market strategy. In addition they have or are easily integrated with enterprise social networking capabilities which are crucial to facilitating and capturing how people interact with all the great resources they contain. 

There are two key dimensions the connectedness metrics should include – the number of connections to the right resources and the cadence of communication. For example:
  •          Which internal portals/systems do they log into – how often?
  •          Which SMEs do they interact with – how often?
  •          Which internal communities have they joined – how often do they visit and contribute?
This data can be invaluable in helping new reps and partners become more effective faster. What behaviors do our “A” reps and best partner reps exhibit? The intention is not to gratuitously boost hits and visits to marketing collateral, but to find the right level of connectedness for different types of reps. Being able to show other reps and partners that they can boost performance by making simple behavioral changes like subscribing to certain resources, joining communities they didn’t know existed, or increasing the frequency of communication is the path of least resistance to effectiveness.

Today many large high tech companies report it takes a year to get a sales rep fully up to speed with the pipeline needed to meet quota in the following year. Clearly there can be a lot of process, product, market, customer, competitive, etc. knowledge that needs to be transferred. But don’t neglect to transfer the behaviors that will help them  best utilize the resources the organization has offer.

For more information on IDC’s sales enablement research, please contact me: gmurray (at) idc (dot) com.

How bright is the silver lining of Salesforce.com’s Marketing Cloud?

At their annual Dreamforce shindig last week Salesforce.com announced the formalization of their marketing capabilities as the Marketing Cloud. Essentially it is a coupling of four key pillars of Salesforce.com’s front end:
  1. Customer intelligence: Data.com enriches contact and account information with fresh feeds from sources such as LinkedIn and many others. Enables both sales and marketing to create detailed contact profiles for segmentation, targeting and campaign management.
  2. Social advertising and content management: The recent Buddy Media acquisition provides support for a wide range of social channels (social, web, mobile) and formats including contests, videos, and photos. Users can coordinate their publishing and advertising activity and measure impact throughout the social sphere.
  3. Social listening and analytical tools: Radian 6 monitors popular social services such as Twitter, Facebook, LinkedIn, YouTube, as well as blogs, forums, communities and more. Supports 17 languages and mobile access.
  4. Core CRM functionality: Salesforce.com consolidates resources to provide sales reps with a single source that can connect them with other applications, contacts, colleagues and workflows. Pulls data together into account/opportunity context. Delivers reporting data to sales and sales managers and can provide opportunity and pipeline performance data into other systems such as marketing and order management.

Salesforce.com is taking its “Social Business” mantra to heart by building its marketing functionality with a “social first” philosophy. The question is: will this be enough to satisfy Salesforce.com customers (and the company itself)? The answer is probably not. The functionality you won’t find in Marketing Cloud is significant – the core campaign management tools, workflows, analytics and more offered by marketing automation vendors (e.g. Eloqua, Marketo, Neolane, Pardot, etc.) Even though there are fewer seats to be sold to marketers as opposed to sales, these two worlds are rapidly converging. The systems needed to automate them will need to do likewise, as evidenced by the tight integration of most marketing automation systems with Salesforce.com and the recent announcement of Chatter for Eloqua.
But Marketing Cloud is undoubtedly only the first step, in fact it’s well beyond the first step for Salesforce.com and the only issue going forward is how do they continue to expand functionality in this area?  The build or buy equation for Salesforce.com currently favors the build approach as valuations for marketing automation vendors are sky high, at least in terms of an acquisition. Salesforce.com has plenty of time to creep into the marketing automation arena, establish itself as a more serious threat and then re-evaluate its strategic decision around marketing functionality.
In the meantime, marketing automation vendors have their work cut out for them. They must stay well ahead of where Salesforce.com’s Marketing Cloud may go. They must continue to grow rapidly, prove their staying power and market value. Customers, however, should have no illusions that Marketing Cloud is an enterprise marketing automation platform in its current state. There is much more to marketing than social engagement especially for B2B models. Waiting for Marketing Cloud to evolve or for social to mature is simply not a choice, there is way too high a price to be paid in terms of market share, growth, and profitability. So if you’re considering marketing automation don’t delay or change course because of Marketing Cloud. Charge ahead full steam and should the social engagement of Marketing Cloud pop your ROI, by all means add it to your arsenal. 

2012 Tech Marketing Budgets, Trends

We are now publishing the results of our major annual Tech Marketing Benchmarks survey. Our tenth year of doing so!

My thoughts today:

1) Most importantly: The Marketing Transformation effort is accelerating. Many vendors have been at this for a few years but as we now do some accounting for  results,  we see as many false-starts as we do successes. And so there are renewed and bigger efforts underway to Transform.  The best evidence of this is in recent, aggressive marketing budget overhauls and  larger, more sweeping re-organizations of the marketing function. 

The good news is that top marketing  execs and C-Level execs DO understand that “future” Marketing can and should be the game-changer function, and so they are going to keep at the Transformation efforts until they see results. 

Here are three major outcomes to watch for and benchmark, on your own Transformation journey: Shorter purchase cycles; reduced overall cost of (combined) Marketing + Sales; and vastly improved customer analytics as a result of integrated marketing plus sales automation efforts.

2) Budgets remain under pressure: we see the average large Tech Vendor getting a 1.7% budget increase this year. That is 1/2 the increase of last year…and we were even “closer” to the 2008-2009 recession at that point.  The main culprit is the economy: management teams not willing to spend until better signs of demand pick up. The second factor is media shift: going-to-market with digital ve traditional media.

3) Tech vendors still spend 3-5 times as much on selling as they do on marketing. Heavy salesmanship has deep deep roots in IT vending. My belief is that the future holds a more even application of monies and activities between selling and marketing.

Rich Vancil

Lead Distribution Scoring – a key differentiator for B2B marketers

Lead scoring is a well established technique for marketers to translate digital responses into levels of qualification for next stage outreach. For companies with no direct sales or sales cycles of 30 days or less lead scoring methodologies can be rapidly optimized around purchase behavior. For long cycle B2B sales processes, the optimization process goes only as fast as opportunity development which for many high tech companies can be 18 months or more. This is a crucial time for B2B marketers and they need to be just as exacting in how they manage the post-lead qualification journey as they are in getting prospects to the starting line.

B2B marketers need to segment, message, time, and target their communications with their direct sales reps just like they do with external prospects and customers. In my previous blog post Six Key Table Stakes for B2B Sales and Marketing Alignment marketers were tasked with three things:

  1. Treat the sales force like a market segment
  2. Market collateral (and leads) like solutions
  3. Take an account-centric approach to lead generation 

Lead distribution scoring touches on all three. Lead distribution scoring is a second stage scoring process for marketing qualified leads that enables marketers to “get the right information to the right sales rep in the right format at the right time to move an opportunity forward.” This is IDC’s definition of Sales Enablement and is a fundamental concept that should govern how marketing markets all of its output to direct sales (leads, campaigns, collateral, etc.) The days of posting to a portal or flowing and forgetting MQLs into the CRM are over. Lead distribution scoring incorporates dimensions such as:

  • What type of rep is this contact going to? 
    • By segment 
    • By tenure
    • By region
    • By product line, etc.
  • Does the rep need many leads or a very limited number of leads? 
  • What account is the lead associated with?
  • Is the sales rep meeting with this account in the next four weeks, next two weeks?
  • How is this contact connected to others in the account? 
  • Is this contact interested in the same solution as other contacts in the account?

Using a lead distribution scoring methodology will bring sales and marketing into much more direct alignment on a one to one basis. It can be applied not only to leads but to collateral, campaign training, and more. Marketing output can be “made to order” for sales reps so that it is not only highly qualified, it is also has high immediacy and relevancy to the reps’ call sheets. If the relationship between marketing and sales so bad that accessing call sheets is a non-starter, then look for friendly reps who might be willing to give a little more to get a little more from marketing.

Most Important Lead Management Practice: Align on Standards

Of all the lead management best practices a company can invest in, the one that stands out as most important is defining standards.  Recently, IDC interviewed technology marketing executives to learn what’s working and what’s not in 21st Century lead management. When asked for a description of their greatest success, many more companies stated consistent global standards (including a common language) than gave any other answer. 

Why is standardization so important?  Variation is a main culprit in erratic and unreliable processes. No two leads are the same. No two geographies are the same. No two campaign tactics perform the same. Nothing in lead management is really the same. Though companies can’t hope to eliminate all variation in their lead management, the best practice companies get rid of much of as much unnecessary complexity and redundancy as possible. By reducing variation, companies gain better control and achieve more predictable performance.
Important areas of lead management standardization include:
  • Definitions: “All marketing groups and geographies use the same stages, taxonomies, and definitions of what it means to be sourced, what it means to touch a lead.”
  • Data: “We strive for a single version of the truth.” “Instead of a 60-minute meeting on why my data is better than your data, we now talk about results – why is Hong Kong doing better?”
  • Procedures: “We consolidated 40 lead queues into six. We standardized BANT criteria, implemented standard SLA’s, standardized everything.” “Even though we are a decentralized company, we run a single process.”
  • Systems:  “Everyone uses the same common business intelligence system so we pull data from the same source.” “Using the same marketing automation system enforces our processes. It has accelerated best practice sharing.”
How to Increase Standardization

Marketing leaders acknowledge the difficulty in getting alignment on standards and offer tips from their experiences:

  • Cross-functional groups: “Bring together a core cross-functional group (regions, field marketing sales), people who are passionate and have a direct stake in the outcome.”
  • High-level sponsorship: “The sponsor was responsible for both sales and marketing. She publically gave me power.”
  • Appropriate specificity: “At first we standardized at too high a level – defining one stage as an “opportunity” for example, and things were too confusing. By getting more granular, putting in more stages, making routing rules more specific, we’ve gotten better results.”
  • Persistence: “The secret is to keep revisiting the model and the results. We’ve needed to revise it multiple times to accommodate changes in sales and marketing capability.”
  • Transparency: “Collect the data and let everyone see how bad it is. Then pick your battle.”
  • Training: “We conducted initial roll-out training as well as ongoing training to maintain momentum.”

Recognize the Limits of Standards and Allow for Some Flexibility

 Although aligning around standards is the most important best practice, it’s important to recognize that exceptions are occasionally needed. Companies should start with a goal of full standardization but then be alert for where variation is reasonably required.  For example, an emerging region with fast growth, such as China, may have genuinely different requirements than a more developed North America for what percentage of leads gets handed to sales.  However, demand a strong business case for any variation, especially in early days when people aren’t used to standards. Then be sure and treat the variation as an exception.
IDC’s report, IDC CMO Advisory Service Best Practice Series: Realizing the Vision of 21st Century Lead Management, will be available soon. IDC also offers taxonomy to assist companies to standardization. (See IDC’s Worldwide Sales and Marketing Taxonomy 2012 #231252)

Six Key Table Stakes for B2B Sales and Marketing Alignment

The IDC CMO and Sales advisory services held their most recent client leadership meeting in Santa Clara on June 5th. One of the key topics of the day was sales enablement. The ensuing dialog between the sales and marketing execs in the room was as impassioned as it was ineffective. Many of the usual themes were expressed (in the nicest possible way): “marketing leads are crap”, “sales doesn’t follow up”, etc. etc.

Whenever I hear this conversation it always sounds like the two sides are talking past one another. Neither really understands how to express their frustration in a way that has any meaning to the other. What’s missing are some basic table stakes:

Sales 

1. Train marketing on sales process. It is impossible to effectively contribute to, much less consistently improve, an unknown process. No marketing team should be expected to deliver effective collateral or leads to a sales organization until they have been fully trained on sales process and methodology. In a large organization with multiple business units and product lines there will be many sales processes and the marketing teams charged with supported them must receive the same depth and cadence of training that the sales reps get.

Marketing 

2. Treat the sales force like a market segment. There are great variations in the needs of different kinds of reps in your organization and you must understand them on a rep by rep basis no less urgently than you do for your external marketing targets. The needs of an enterprise rep with two accounts are radically different than an SMB rep with 400 accounts or a territory where they may not know all the potential customers. Don’t throw 10,000 leads a month at both of them. You get the idea. Nurture your sales reps like any other targets and tune the metrics accordingly.

3. Market sales collateral like solutions. Marketing tends to market its wares to the sales force like products whose benefits are self evident. Assets are often “published” or “distributed” generically with tags to help reps “find” them. Imagine what would happen to the funnel if that was the extent of external marketing efforts! Sales support assets should be marketed through targeted nurture campaigns. Once you get going on #2 above, you can start to address the needs of each rep and market your leads, collateral and other assets as solutions to the right sales problem at the right time!

4. Take an account centric approach to lead generation. Marketing is generally great at understanding the world in terms of segments and contacts. These are fundamental concepts for planning, budgeting, and executing marketing activity. However, sales reps think of the world in terms of accounts. Marketing needs to make leads more relevant to reps by delivering them in an account context.

Sales and Marketing

5. Define customer creation as an enterprise process. This is the most effective way to change the corporate culture and gain executive support for addressing the many alignment issues across all customer facing functions in the enterprise. The analogy here is supply chain. Before it was defined as an enterprise process the people, processes, technology, data, and budgets within it were managed on a purely departmental basis. Defining it as an enterprise process made it possible to optimize and continually improve the supply chain based on overall business performance. The customer creation process – from prospecting to closing to upselling – needs to be owned and measured in the same way.

6. Implement customer data as an enterprise service. Once customer creation is established as an enterprise process, it requires an enterprise approach to customer data management in order for the optimization and continuous improvement to take place based on core business metrics and not on a collection of disassociated departmental KPIs.

These six table stakes should be treated as urgent action items for all high tech Sales Operations and Marketing Operations personnel. Some organizations are doing some of these things, but no one has implemented all of them as organizational norms.

Keep the Language of Marketing a Secret?

Tech marketing leaders constantly search for better ways to align with sales and IT as well as gain greater influence at the executive table. To improve this capability, Marketo’s newest board member, Sue Bostrom, offers an intriguing suggestion – keep the language of marketing a secret.

Sue Bostrom is one of the Silicon Valley’s most accomplished marketers. A former executive vice president and CMO at Cisco, she serves on the boards of Marketo, Varian Medical Systems, Cadence Design Systems, Stanford Hospital & Clinics, and Georgetown University in Washington, D.C.; and advises several prestigious organizations.  At the recent Marketo User Summit, Sue shared with the enthusiastic fan-base practices that contributed to her success.

One piece of advice – consider the language of marketing a “secret language”, one that we use when only when we talk to other practitioners.  When we talk to others, use ordinary language.

Since I speak the language of marketing every day, it had not occurred to me that what seems like normal conversation to us may seem like gibberish to colleagues.  Then I thought about the terms we throw around so easily. How about brand DNA, fan ratios, A/B testing, creating customer value, psychographics, listening platforms, CPM, leave behinds, personas, net promoter scores, positioning, referral premiums, authenticity, or network analysis? Maybe the language of marketing has become too technical, too insider.

As the audience left the packed ballroom following the keynote, I heard a few attendees complaining. They interpreted Sue’s suggestion as a directive to make marketing a second-class profession in the corporate world. I disagree with this interpretation. All sophisticated professions develop specific terminology. Spoken inside the community, it achieves precision and clarity. But to those outside the profession, it sounds confusing, irritating, and possibly elitist. Think how annoyed people get when attorneys use legal jargon. Here’s an example I pulled from a website appropriately called the Plain English Campaign:

“Any reference to a specific statute include any statutory extension or modification amendment or re-enactment of such statute and any regulations or orders made under such statute and any general reference to “statute” or “statutes” include any regulations or orders made under such statute or statutes”

Huh?

Using plain language when we speak to non-marketers is not “dumbing things down”.  It does not diminish our worth to use ordinary language.  It increases the chances that we will be understood. It shows respect for our colleagues’ experience in other areas.

What are some ways we can communicate more clearly with colleagues in other business functions?

  • Substitute ordinary language and analogies for buzzwords: when eCommerce was just beginning, Sue told her fellow executives that the website would “sell while they slept”
  • Explain with data: for many business concepts, numbers can be more objective and clear than wordy explanations (but avoid mind-numbing, execution-level detail!)
  • Use visuals: the old maxim that “a picture is worth a thousand words” is true because pictures allow someone to grasp many aspects of a situation simultaneously –  especially good for communicating complex concepts

Sue Bostrom is a marketer who earned a seat at the highest leadership table. And let’s face it, not many technology marketers have. I think we should heed her advice.

(P.S. Congratulations to Marketo on the launch of their new social marketing release and to CEO Phil Fernandez on the publication of his new book, Revenue Disruption).

8 Essential KPI’s for the Intersection of Marketing and Sales

Conversations between sales and marketing improve when marketing generates data on the state of joint processes such as lead management.  But companies who are serious about orchestrating sales and marketing in a modern go-to-marketing model need more than these execution-level metrics. At the intersection of sales and marketing, senior executives need operational-level investment, resource allocation, and performance metrics.

Tech marketers have done a great job of growing the range of measurement dashboards within their management tool box.  These reports provide data about process execution and are primarily driven from automation such as CRM, email marketing, and web analytics. The data in these reports can answer important questions such as how many leads were produced and what really happened to them? This data can be extremely useful when talking to sales.  Replacing hearsay, gut feelings, and assumptions with accurate data results in a much more credible and actionable conversation.

Operational Insight Drives Strategy
 

While this kind of data is valuable at an execution level, it isn’t the kind that drives strategic decisions. Senior management needs to know how to invest their most powerful resources – money and people – to get the best results. For this task, they need operational key performance indicators (KPIs) that answer questions such as what are my people really doing and where is my money deployed. Just as important, they need context around this data in order to understand its meaning and highlight what to change.

Comparison benchmarks serve as excellent insight into the meaning of operational-level KPIs. IDC has produced such operational-level scorecards for many years for each function separately – for marketing (IDC’s Marketing Performance Scorecard) and for sales (IDC’s Sales Productivity Scorecard). These scorecards are based on detailed investment data from over 100 tech companies. IDC parses leaders from laggards, mines for best practice nuggets, and combines this information with insights drawn from scores of interviews, interactions, surveys and the IDC teams’ deep practitioner experience.

Introducing the Customer Creation Scorecard: Operational KPI’s for the Intersection of Sales and Marketing
 

However, operational benchmarks have been lacking for companies who are serious about orchestrating the collaboration between sales and marketing within a more modern go-to-market model.  For this initiative, senior executives need to look at the joint investments in sales and marketing.

Recently, IDC introduced the Customer Creation Scorecard – eight operational KPI’s leading companies should add to their dashboard. The eight are organized into three categories: investment, staff efficiency, and productivity levers.

Here are the aggregate level benchmarks for your 2012-2013 planning processes:

  1. Investment: Sales + marketing budget ratio = 10.6% of revenue is spent on sales and marketing combined
  2. Investment: Sales to marketing ratio = 4:1
  3. Investment: Marketing investment per total sales headcount = $40K to $70K
  4. Staff efficiency: Quota bearing headcount to field marketing ratio = 32:1
  5. Staff efficiency: Program to people KPI = 27% of all sales and marketing investment is spent on programs and the remainder on people
  6. Productivity levers: Operations staff percentage = 4.7% of all sales and marketing staff are in sales operations or marketing operations roles
  7. Productivity levers:  Sales enablement score = 47 out of 100 is the index that IDC has developed for the technology industry based upon detailed quantitative and qualitative research
  8. Productivity levers:  Lead management score = 52 out of 100 is the index that IDC has developed for the technology industry based upon detailed quantitative and qualitative research

IDC finds that these benchmarks vary significantly depending on attributes such as go-to-market model, company size, and industry sector.   IDC’s also provides guidance around these KPI’s.  For example, IDC recommends that companies measure sales and marketing costs jointly to better control overall expenses (this includes “shadow” marketing investments where sales teams use their own funds to conduct marketing activities).

For more information on the Customer Creation Scorecard, IDC insight on what your KPI ranges should be and what to do about it contact me or anyone on IDC’s Executive Advisory Group team.