The next interview in the B2B Marketing thought leader interview series is with Aaron Ross, formerly with salesforce.com and founder of PebbleStorm:CEOFlow. I've long been a fan of his blog Build a Sales Machine and I learn something new every time we interact.
1. Tell us a little bit about how you got into marketing, and what you like most about it.
Getting into lead generation was an accident. Back in 1999-2001, I was CEO of an internet company. I had more ego than understanding about lead generation and professional selling. After that experience, I decided I needed to learn how to build and manage a killer sales organization. Where better to learn that than doing sales at salesforce.com? I had no professional sales experience (raising venture capital doesn't count), and the only opening they had for me at the time was answering the 800#. So, I started literally at the bottom, responding to inbound website and 800# leads. That started my journey into lead generation, marketing & sales. It's funny how life takes you places you never expected to go!
What I like about marketing is that it leads and magnifies what happens in sales. If marketing & lead generation are in the flow, sales is (or has the opportunity to be) in the flow. If marketing & lead generation aren't t in the flow, sales will struggle. Unfortunately, although things are changing, there's still a lot of thinking that "to increase revenue, the first thing I need to do is add salespeople". In The Fatal Mistake Boards and VP Sales Will Make In 2009 Planning, I discuss how lead generation causes new customer acquisition and salespeople fullfill it.
2. Your blog is called "Build A Sales Machine". What does it mean to build a sales machine?
A "sales machine" is an organization that sustainably generates predictable revenue. It begins with repeatable lead generation programs, continues with consistent sales processes, and is sustained through ongoing customer success. This means the organization understands the causes, effects and measurements of the different processes related to lead generation, closing and renewing, and can consistently execute them. Simple to say, hard to do
At salesforce.com with my team, we could predict pretty confidently the people and investments needed to increase revenue by a certain amount the next year. It took quite awhile to create the conditions for that kind of predictability. However, once we got it going, it was like a flywheel and just kept on turning. The first $1 million was much harder than the next $100 million!
If I shared a single piece of advice with your marketers (except ones selling one-call close products), it is work with sales to break out into separate roles 1) qualification of inbound leads, 2) outbound prospecting, 3) closing deals and 4) account management/renewals. This will increase conversion rates on your leads, your ability to work with sales teams on executing programs, improve tracking and measurability, and improve the overall flow of leads through sales to revenue.
Unless your product is a one-call close (which very few b2b sales are), salespeople should never qualify their own leads. Also, whenever possible, separate the inbound lead qualification ("market response") role from the outbound prospecting role, so that each can specialize. Doing this can double the productivity of each function. I have a few blog posts (such as "The Problems With Lumping") with more background on why it is so important to specialize.
In this interview I keep repeating the importance of specialization in sales, because it is so critical to helping marketing improve its own results!
3. What role should marketing play in the sales machine?
1. Track leads in your funnel, but don't attach much importance to "leads-per-month" and "cost-per-lead" metrics. They're relatively meaningless until you include "lead-to-opportunity" conversion rates so that you can measure the rate of qualified leads generated. A CEO/board caring too much about these two marketing activity metrics is like a CEO or board caring about how many calls salespeople make per day instead of caring about opportunities generated (if yours do, have them read "Stop Measuring Calls Per Day".)
Attach importance to metrics such as a) the number of qualified leads/opportunities generated, b) the cost per qualified lead/opportunity, and c) the dollar value of qualified pipeline generated per month. These metrics can create meaningful common ground between sales, marketing and the CEO.
2. Keep marketing updates to sales regular, relevant and short. Can a salesperson read your weekly "what's going on in marketing" update on their blackberry without scrolling? Long updates listing all your projects will confuse people, and they'll just skip reading it. Or, if it must be long, include a "blackberry summary" at the top.
3. Less collateral is more. Salespeople will always say they need more materials, which they receive and throw over to prospects, who never read it. Be thoughtful in what and how much you create, to avoid collateral and program clutter. Remember – everything you create will need to be maintained!
4. Invest in sales lead generation. There are some great lead generation tools today for salespeople (like ConnectAndSell and Lead Insight for Sales). Leads that salespeople generate on their own tend to be higher quality than marketing leads, but because the leads come in much lower volumes and marketing has the budgets, organizations under-invest in spending on tools to help salespeople generate leads. When the organization focuses on number of qualified leads generated than just raw lead volumes, it becomes easier to compare apples-to-apples results between marketing and sales investments.
5. Lead prioritization & lead scoring: All leads are not created equal. It'd be a waste of energy to try to get sales to followup equally on all leads. What can you do to help them prioritize their time more effectively? There are plenty of ways to tackle this: educating reps on the characteristics of high-likelihood leads, adding a drop-down rating field that reps can use to grade leads (such as "A/B/C/F"), or marketing automation solutions such as Marketo.
4. What do you see as the biggest oversight by marketers with respect to sales and marketing alignment?
The problem is the lack of a bridge between the two functions. Look, the same sales-marketing frictions have existed as long as sales and marketing have existed, even though solutions (common goals, communication, etc) are well-publicized and discussed ad naseum.
My belief is that most companies also need a 'structural' solution, in the form of a junior sales team that sits between marketing and sales. This team reviews and contacts all new leads, and then passes qualified ones to quota-carrying sales reps who close them. This team is often called Sales Development or Market Response. Any company that does not have a one-call close should implement this structure. There are all kinds of benefits from this specialization, including fast lead response times, more followup on leads, and quota-carrying salespeople can spend more time with real prospects and customers because they won't spend 60-70% of their time chasing raw leads.
5. What do you think is the biggest opportunity companies have in terms of more effective demand generation?
I know social media/etc is sexy, but personally I like the unsexy low-hanging fruit that marketers can tackle right away for much faster, concrete results: improved management of leads and better account base marketing.
- Lead management: Fix your leaky bucket before adding more water! How a company receives and manages its website and 800# leads is so important, and yet it gets so little attention and love! Improving inbound lead management is THE low hanging fruit. It unfortunately gets ignored in the demand for increasing overall lead volumes.
- Account base leads: There are two common issues getting in the way here. First, it's surprisingly challenging to track and handle renewals and ongoing sales well, so they tend to drop through the cracks. Especially if you have a subscription business, renewals are the perfect opportunity to re-engage with a customer to determine if they need other services and products from your company. However, without a consistent system or account management process, it's hard for marketing to help out here. Conversations (whether coming from sales or marketing) should begin at least 30 days, and often 60 days, in advance of the renewal date.
As a second common issue, companies frequently have a single sales team doing double duty: closing new customers and handling account management. Reps just can't do both well — they end up ignoring current customers. Balls get dropped. What can help? Unless your customers are very small, consider breaking new customer sales and account management/renewals into separate functions, so that 1) current customers have people dedicated to them, which WILL improve renewals and upsells, and 2) marketing will have a dedicated team to work with to increase leads from the account base, which will improve lead generation.
Take this with a grain of salt, because the topic of structuring these relationships between sales, account management and renewals is a complex one. The right approach varies depending on a variety of factors, but the above guidelines will be the right answer for say, 80% of your readers (80/20 rule).
6. You write frequently about flow. How can marketers apply the concept of flow to their lead generation?
- Marketing tends to work in erratic spurts and spikes, which is very disruptive for everyone. I'm sure a lot of your marketers dread when the CEO walks into their cube with the words "I had an idea last night…"! Try setting up a drumbeat of one new program per month, as a way to even out the pace. "Sounds great, let's try that as our new program next month."
- I would highly recommend this short (<100 pages), simple book: What is Lean Six Sigma? Don't let the title scare you!
- Avoid one-time projects if they take much extra work. If the program isn't sustainable in some way, consider it a distraction.
- While building something new (a lead generation program, site, team, process…) and you're experimenting, remember that what you learn from the experiment is more important than any results (or lack thereof) from the experiment. Failure is not lack of positive results — failure is a lack of learning from whatever result happened.
7. With the multitude of promotion channels today (ie: social, blogs, email), what is your advice for B2B marketers striving toward a marketing ROI?
I would give this advice to both marketers and their CEOs: be data- and ROI-driven, but in the rush to obsessively measure and track everything, don't forget that data lies as often as it tells the truth. Garbage in, garbage out.
I'm all for measuring things, but the analytics tools today make it easy to go too far. People spend enormous amounts of effort trying to track things, and then end up overloaded with data. Seriously, how many of your metrics do you actually look at? 20% of what is on your dashboards or in your excel sheets? How much energy did you waste creating that other 80%? So be smart about your dashboards: measure but don't overdo it. If you have a data-happy CEO who has you running in circles measuring everything…sorry, I don't have any good advice for you.
Bonus: Anything else you'd like to add?
Even though business seems to move faster than ever, that's just the activity of business. Sustainable revenue results are taking longer to create. So, be "aggressively patient" rather than "aggressively impatient". Focus on continually doing bite-sized experiments that you can execute and iterate in hours or days, while being patient for revenue than can take several weeks or months. That's one reason why I've transitioned from doing classic consulting projects to an advisory model.