Three key areas where marketing operations and sales operations need to agree on

Before we talk about the three alignment areas, lets ensure we agree on the general scope of marketing operations and sales operations. 

Marketing Operations is the function of the marketing organization (including people, process, technology, and data) that enables Marketing to operate efficiently and to scale with quality and consistency. Marketing Operations function typically owns the marketing technology infrastructure including marketing automation systems; customer marketing database; creation and execution of campaigns through the marketing automation system; marketing lead flow process; and marketing analytics and reporting.  

Sales operations, on the other hand own processes, technology, and resources to support, enable, and drive front-line sales teams to sell better, faster, and more efficiently.  These include sales forecasting; sales incentives; enablement including right messaging, product knowledge and sales methodology adoption; CRM system including its ownership, adoption and usage; sales territory planning/assignment; and sales reporting/analytics/dashboards.

While these two are distinct functions within most organizations, there are three areas where they need to work together and be aligned.  When the two organizations are not in sync, the result can be seen in poor pipeline. As a marketing consultant to the CMO in the last 15 years, this is where I used to spend a lot of my time to drive alignment and ensure pipeline issues get addressed.

• Process: The two organizations must agree on the end to end process for the lead life-cycle – MQL (Marketing Qualified Lead) to SQL (Sales Qualified Lead) to SAL (Sales Accepted lead) to an opportunity.  They should also clearly define the re-qualification/re-nurture process, as well as SLAs (for how long sales should try to qualify a lead before it is returned back to marketing for nurture).  So much finger pointing happens when a lead crosses from marketing ownership to sales ownership and this SLA is not clearly defined – whether it is at SQL or SAL level – depending on your specific process. Marketing complains that sales is not acting on the leads it sends, while sales cherry picks the leads and the rest stay in the processing queue forever.  Finally, they should agree on how marketing is going to ensure they are building awareness and pipeline in the specific target accounts that the sales organization is going after in their go-to-market.  I have seen this to be an area of big disconnect – where sales is targeting specific accounts and marketing takes a geographic approach to marketing.

• Technology: The two organizations own their respective systems – the marketing automation system and the CRM system.  However, these systems are wired to stay in sync, so it is important that the two teams agree on a governance process for the data between the two systems. For example, how do you manage the process around sales reps wanting to upload lists of contacts in their target accounts that, then get synced to marketing system and potentially may violate GDPR rules?  How do you ensure sales does not email a contact without permission from them., if they have opted out of marketing emails?  Which system is the owner of the golden record about the contact and what is the process to protect its integrity? Finally, it is important that the sales and marketing analytics agree on the metrics and their results, so the two organizations don’t have a different version of the truth.

• Pipeline: How often do you hear marketing state that they met their pipeline generation targets, while sales complains of not enough pipeline. Challenge is often three-fold – a) the two organizations have a different definition of “pipeline” which needs to be resolved or b) they may be looking at different analytics that provide completely different answers and c) while marketing may be looking at aggregate numbers – but at the sales rep level there may be feast or famine.  The marketing organization needs to look at pipeline at the sales rep level and ensure each has at least 2.5X pipe at the beginning of the quarter in order to hit their individual numbers.  The actual multiplier needed may vary from company to company, based on the nature of the business.

These are the three key areas you need alignment at the operations level within the sales and marketing organizations to ensure good marketing ROI (in terms of business generated by the sales organization).  In the next blog posts, I will talk about some of broader areas of alignment needed between sales and marketing – not just at operations/systems level.

Marketing Analytics Revisited

There are many articles and even books written on the topic of marketing operations and analytics.  I will share my perspective on marketing analytics from having worked with several clients, as well as having been a CMO for multiple public and private enterprise software/cloud companies.  The information I share below is equally valid for large and small companies.

I put the marketing analytics in three broad buckets:

• Basic analytics:  This helps me understand the big picture – how many MQLs, SQLs, SALs, as well as $$ value of pipeline generated this month/quarter at aggregate level and by sales region and trend charts.  I also want to understand nurture volume (i.e. what is on the stove and will be ready soon) and trend charts (how long does it take historically for leads to exit nurture and become SQLs) etc. Finally, I want to understand the top 10 campaigns running this month/quarter, planned spend and expected output from them. To keep things simple I recommend using marketing created leads as a criteria – otherwise marketing wastes too many hours arguing with sales operations and partner operations over attribution to make their contribution numbers look better.

• Optimization analytics: This helps me understand how the various channels and campaigns are performing, so I can continue to optimize my allocation of program dollars. I want to understand the performance of campaigns by early indicators (MQLs, SQLs, SALs) – especially for campaigns driving top-of-funnel, as well as by lagging indicators (e.g. pipeline generated, by forecasted deals, by deals closed).  The performance should compare planned vs actual performance, so even the performance of campaigns that you are ‘trying out’ and are allocating ‘risk dollars’ to are measured in context of expected results.  Without this level of visibility, it is challenging to shift money between channels and programs to maximize your performance, or to try new but risky programs.

• Alignment analytics:  This is a very important bucket that most marketing operations teams miss.  It helps me understand how well marketing and sales is aligned and where are the opportunities to improve this alignment.  For example, most sales organizations have target accounts for their sales reps.  What is the penetration of marketing database in those accounts (i.e. coverage in each of those target accounts by desired personas)?  I call it the Swiss Cheese analysis to assess coverage and holes. What is the pipeline breakdown by sales rep in each region – aggregate pipeline analytics may look good, but some sales reps may be starving, putting them at the risk of attrition. How well is the re-nurture program working (to wake up stale opportunities).  Segment analysis of the marketing pipeline generated to ensure targeting of marketing programs is aligned with go-to-market – i.e. is the mix of SQLs different than GTM in terms of products/segments/industries (where SQLs are coming from vs. your strategy).

If we can get marketing analytics right, we can build the right foundation for improving marketing planning and execution, as well as ensuring marketing spend is optimized for best results.

Seven steps for a great ROI Model

If you are selling a business software solution, a good ROI model has always been an important part of the sales process.  It allows your customer to build a business case for buying your software. It is even more important now than ever before, when the budgets are tight and fewer projects are getting funded.  I have built several ROI tools for my clients in my 15+ years as a marketing consultant to software companies.  Here are some important tips:

1. Design your ROI model for use by pre-sales engineers in sales cycles.  This allows you to build a business case in nearly every deal, using the data they have gathered during the discovery process. 
2. Ensure the model can be driven with inputs that are not too difficult for customers to provide. For many customers, their current process may be manual and hence they may not have too many metrics around their process.  If you ask for a lot of details, you may not be able to get enough information from them to calculate ROI.  On the other hand, if your model is driven by very basic information, it may look too trivial or generic, and your customer may not take it's output seriously.  It is very important to have the right balance – I typically analyze several pre-sales discovery notes, speak to a couple of pre-sales engineers and post-sales consultants and interview 4 to 5 customers to understand the right balance before creating a ROI model for my clients.
3. When you are asking the user to enter current metrics in the ROI model, have the field default to industry best practices data (i.e. what you have seen at your other customers), which can be overridden by customer.   This ensures that if the customer cannot provide the right metric you are looking for in their current manual process or the improvement they expect to make by implementing your technology in their environment, you have a valid default number to plug in (that will be acceptable to the customer).
4. I have always seen less push back from customers, when you use a range (a high number and a low number) for either current metrics or for capturing future improvements from your technology, rather than a single number.  
5. The end goal is to quantify the inefficiencies from manual process, as well as capture the value of the benefits (revenue increase or cost reductions) from automated process, and the investments required, so you can use this data to show Net Present Value of savings from your technology.
6. Since the ROI model is in Excel, what I have seen works is the first tab contains all inputs, the next set of tabs contain costs and savings (or revenue increase opportunities), one tab for each process improvement opportunity area.  The last tab of the model contains a chart showing $$ value of savings over a 3-year period, as well as NPV.  Such a layout is easy to understand and also at a glance highlights the various benefits from your software.
7. Never send the ROI model to your customer to fill in the data – have your sales engineer work with the customer to create the ROI for their environment

A good ROI model can accelerate your sales cycles and help you improve your win rates.  Don't short change the creation process, but at the same time, don't make it too complex.

Three questions to help you sharpen your messaging

Having a differentiated message for your solution is critical to your success. It allows you to win your share of the deals, assuming your sales organization is choosing the right battles.  Having your message further sharpened to reflect why the customer needs to buy your product now is even more important in these times, when the budgets are tight.

A message house (collection of key positioning messages for your solution) is the starting point for all your marketing activities.  Once constructed, it helps your corporate marketing, field marketing and sales position the solutions consistently and correctly in all they do - their PR activities, customer conversations, sales pitches, industry presentations and collateral.  So much is written about the frameworks to create a message house, but they all go something like this:

• Who: who are the key personas you are targeting?
• What: For each persona, what are the key problems you are trying to address (in context of your solution)?
• How: For each problem defined above, how does your product address the issue and what are your key proof points.
• Unlike: How do point solutions, legacy solutions and other competitors try to solve the problem and the limitations in their approach

The important thing to remember is that messaging framework should allow you to answer two important questions – Why buy and Why buy mine?  But do not forget to answer the third question as you build your messaging framework – it has always been important, but is even more important now when customer budgets are shrinking – Why buy now?

So, make sure your messaging framework answers these three questions.  One test – after you have written your positioning messages, replace your company/product name with the name of your competitor/their products and see if the messaging statements still hold true.  If they are, then your message is too generic and does not capture the true value proposition of your products and solutions - you need to revise them.

If your sales team can articulate the answers to these three questions to the satisfaction of their prospects – why buy, why buy now and why buy mine, they can dramatically increase their win rate.  And, as a product marketing person, that is your challenge.  

How to improve your Customer Marketing during these times

In the Covid-19 era, it is easier to cross-sell (or up-sell) to an existing customer than trying to build an entirely new set of relationships with prospects when face-to-face meetings are still not possible, especially when you are selling into enterprises.   In this post, I will share with you the information your sales and marketing teams need  in order to execute a better customer marketing strategy, so you can build a strong pipeline within your customer base.  By the way, this exercise will also help you become more effective at marketing to prospects, who are similar to your existing customers.

What is my current customer profile?  You need to capture, within your CRM system, comprehensive information about your current customers.  This includes:

• Product information: what products they use, what versions (if not a SaaS application)
• Key contacts: List of key contacts at the customer (by personas, such as business buyer, technical buyer, influencer etc.), as well as key contacts for the account internally (account manager, customer success manager, executive sponsor etc.).  If the customer bought from you more than two years ago, your key contacts information within the CRM system may be stale and needs to be updated.  Valid and active contacts in your system are likely to be their accounts payable admin (you send invoices to) and their users (who call the support line), not the business buyers and influencers.  If your product is implemented by your partners, ensure your CRM system captures the name and contact information of the partner, and their current status (i.e. if they are still active in that account.).  Even if they are not active, they may provide valuable context about the account esp. when your old account team has moved on.
• Customer satisfaction: Capture information if the customer is referenceable and if possible, include a link within your CRM system to their recent support issues.  Your sales rep needs to know if they are currently a happy or an unhappy customer before they call them.  Their recent CSAT score and responses, if they responded to the survey, would also be a good thing to capture within your CRM system.
• Overages: If your solution is sold based on number of users or is usage based, it would be good to capture overage information within your CRM.  This information can be automatically updated in your CRM system if your solution has monitoring tools.  Overages provides sales rep an opening to call the customer and upsell, and perhaps, cross-sell other products.
• Key assets:  It is a good practice to add links for press releases, internal announcements, and case studies to the account record of your CRM system, as you publish those assets. Similarly, it is a good practice to ensure your sales rep adds the sales presentation, RFP responses, contracts, discovery notes etc. when the deal is closed and marked as won within the CRM system.  This provides a lot of context about the account when your current account manager approaches the account for an up-sell or cross-sell opportunity, months or years after the initial transaction was closed and the team that worked on that account is long gone.  For old accounts, see if you can get an intern to add these assets to deals won in the last 2 to 3 years.

This 360-degree information about your customers allows your sales rep to look for up-sell and cross-sell opportunities more easily within their territory. If most of the information is added as searchable and reportable fields within your CRM system, the process becomes a lot easier.  Today, account teams waste a lot of time profiling their target accounts within the installed base, and hence, may end up targeting only a small % of the possible accounts.  Similarly, in absence of such specific information, marketing teams run generic campaigns into the customer base rather than a targeted ABM (Account Based Marketing) approach, leading to very low conversion rates.

But more important, this treasure-trove also allows you your sales reps to more quickly understand why customers purchased your solution and use this information to quickly create customized and relevant pitches for similar customers in similar segments (industry, geography and size) – accommodating for changes to your products over time, evolution of your messages and changes in your competitive situation.  

So, an investment in customer profiling not only makes it easier to upsell/cross-sell into the installed base, but it can also help you open more doors within your target prospects.  And that is a huge advantage in these times.

Account Based Marketing during Covid Times

Account-Based Marketing (ABM) has always been a great idea.  It allows your sales and marketing to be aligned.  Your sales organization typically has a target set of accounts (typically 20 to 30 per salesperson) that they are going after.  If your marketing does not have specific programs to target those ‘named accounts’, then there is a clear mis-alignment between go-to-market among your sales and marketing organizations.

ABM does not just mean that your marketing database includes these accounts, as you build your marketing database. Clearly that is important.  But two additional things need to happen:

·       --  A clear focus on developing a list of contacts with multiple target personas (you sell to) across each of the target accounts within your marketing database.  Create a swiss cheese model of each target account, then try to find as many holes and fill them, while respecting local privacy laws.  

·      --  Create content that is very specific to the personas and their industry.  Messages will resonate well if it speaks to their issues/pain in context of their industry.  Many marketers create generic cross-industry content for their ABM campaigns, so they can target many accounts in one campaign, but then end up with very poor response rate.  The need for multiple content pieces to support targeted marketing is what makes ABM challenging, but it delivers great results.  However, you need to do it and do it well, so you can map to how your sales organization is going to market.

In these days of Covid, a third criteria needs to be added.  The messaging in the content needs to articulate ‘why they should evaluate your product category now’ and how your solution can either drive more revenue (preferable) or help reduce costs.  A lot of top-of-the-funnel content that is used in ABM campaigns was developed pre-Covid and does not articulate the urgency with which your prospects would evaluate your solutions.  In the days of tight budgets, if your messaging does not articulate urgency, the initiative containing your product will likely not get funded.

Since developing a new relationship in Covid era of lockdowns and remote work is more challenging, you are likely to have more success with cross sell and upsell into existing accounts.  Shifting your ABM program to grow existing accounts (i.e. ABM based customer marketing) will yield more positive results.

If you have questions or comments, keep the conversation going.

Win-Loss Analysis - Part III

Win Loss Analysis – Part 3

In my last post we talked about the quantitative analysis within your win-loss analysis program.  In this post I will dive into the details of the qualitative aspect of the program.  Analysis from your CRM system gives you a lot of good information on metrics and their trends.  But it needs to be complemented with interviews (qualitative aspect of the program) – both with salespeople & pre-sales, as well as with customers, so you can get a holistic view into your wins and losses. 

As I mentioned in my last blog, the response rate on request for calls with salespeople and customers is higher when the opportunity was recently closed.  Also, the quality of information you get is better, if you can talk to the salesperson and customer soon after the deal was won or lost.  From my experience, response rate from salespeople is about 100% for deals you won and between 50% and 75% for deals you lost.  

Of course, there is some bias in the responses from salesperson.  Many a times I hear from them that the deal was won because they did such a great job with building a relationship with the client and convincing them of the value proposition OR the deal was lost because either our price was too high or product has some feature missing or the customer had a bias towards the competition.  By doing a 360 degree on the internal team on the account (i.e. speaking with sales engineers and anyone else involved with the account), you can begin to get a more complete story. 

The other key aspect of qualitative analysis is interviews with customers.  From my experience, response rate from customers you won is about 1 in 2 (to 1 in 3) and from losses is about 1 in 4 (to 1 in 6).  Key is to interview both the influencer, as well as decision maker, so you get two different perspectives.  Make it clear that you are not associated with sales and the intent for this interview is for your company to learn from them what is resonating, what is not working and continue to improve.

For both internal and external interviews, it is important to ask as many open-ended questions as possible and let their responses lead you in the interview (rather than have a pre-determined script).  In both sets of interviews, I start with trying to understand what the customer’s key issues were that they were trying to address and why did they want them to be addressed now rather than later?  Another area I want to explore is what they liked about our solution and why, as well as where they expressed concerns and why? This also gives me an opening into delving with the customers about the competitors - if they are willing to go there.  I also try to understand from customer their perception about the vendor before they started the sales cycle and if (and how) that perception changed during the sales cycle and feedback on what the vendor should do differently?  I ask the salesperson similar question about what they would do differently (or what additional support they would ask for) if they were to run the sales cycle all over again. 

You will surprised how much you can learn about what aspects of your messaging is resonating and what is not, where the competition is out-positioning you, the opportunities in sharpening your message (why buy, why buy now, why buy mine), the additional sales enablement needed to get your salespeople to tell the right story, your product strengths and gaps, how well your brand is resonating with your customers/prospects, how well/poorly run your sales cycles are (and opportunities to correct them), how well your sales methodology is being used in sales cycles etc

Hope this post answers some of your questions re: the qualitative aspect of the win-loss analysis.  If you have questions or comments, keep the conversation going.