Listen to the podcast:
In a recent Act-On Conversation, Charles Besondy and Leo Merle chatted about the steps a company can take to make marketing more accountable and a more forceful contributor to the success of the sales team. Our Conversationalists:
- Charles Besondy is the president of Besondy Consulting and Interim Management, and also a certified Funnel Coach for MathMarketing, an international consultancy. He works with company owners and CEOs to resolve two burning questions. Why isn’t the marketing function contributing more to the company’s growth? And: What changes can you make to see that happen?
- Leo Merle is the marketing programs manager for Act-On.
LEO: Charles, marketing has started to shift from a soft creative discipline to a data-driven and scientific discipline. What impact does this have on the creation of a company’s marketing strategy?
CHARLES: Technically speaking, a company’s marketing strategy really isn’t affected by this trend. But what has changed is the role that marketing can and should play in producing revenue opportunities for the company. Permit me to explain that. Now I’m a simple guy, and I take a simple view of what a go-to-market strategy should be. The purpose of a go-to-market strategy is:
- to describe the customer problem we’re electing to solve,
- describe the solution to that problem we’re going to sell,
- identify to whom we sell it,
- explain through whom we will sell it,
- and against whom we will sell it.
The answers to these questions comprise our go-to-market strategy, no matter what role the marketing department is going to play. In other words, we could have a marketing strategy and not even have a marketing department.
So let’s get back to your question. Yes, there is much more focus today on the metrics and the data side of marketing. This certainly doesn’t mean that creativity doesn’t have value anymore. It’s as important as ever. It simply means that we want to measure what is done so we can do more of what works and less of what doesn’t. Which is hardly radical thinking.
Because of the advances in technology today, we’re able to track and measure the impact of marketing tactics like never before. If we can test and measure something, we can improve it. And that’s what we try to do every day as modern marketers.
Now I’ll make a final point about data-driven marketing, if I may. Technology has made it much easier for marketers to identify promising market segments and target those segments with highly relevant content at the right time. We still need to be creative with our content development. But the nuts-and-bolts of delivering the content is much easier today. And in short, the technology has enabled even small companies to adopt pretty sophisticated strategies and marketing tactics, and be successful with it – if it’s in the right hands of skilled marketing strategists, tacticians, and technologists.
CHARLES: There are five things that I think are really, really important for a company owner or a CEO to have in mind.
- First, when they’re talking with their marketing team, there needs to be a very clear understanding of the role that marketing must play in the business in order for the business to achieve its goals. The conversation can’t stop at “Just give me leads and I’ll be happy.” It’s much more complex than that.This can be a very difficult conversation for a company manager or a CEO to have, because many CEOs don’t have marketing experience. They’re more likely to come from operations or something like that. And so they don’t necessarily know what marketing should do. So if there is not a senior level marketer on staff that the CEO can go to, then it helps to have someone from the outside come in and say, “Okay based on where you want to go with the business, here’s a roadmap for what marketing can do for you.” And then that consultant puts the pieces together.
- Once the CEO has decided the role that marketing is going to play in the business, then you have to ask whether marketing has the requisite skills. Do they have the right technology and the resources to play that role? And hopefully it’s a big role.
- The third thing is, does the revenue generation in the company consist of a single integrated process? Now some of your listeners may be saying, wait a minute, I thought we’re talking about marketing. Why are we talking about revenue generation all of a sudden? Well, it’s really important that marketing and sales share a common process, a common funnel model, a common view of the customer. In other words, sales and marketing need to be aligned. And this doesn’t mean is marketing aligned to sales. It doesn’t mean is sales aligned to marketing. It means are sales and marketing both aligned to the buyer’s journey. Are both departments equally focused on the customer, or on some internal procedures?Let me share something with you. In well-aligned companies, marketing generated leads have a
- 67 percent higher probability of closing,
- 108 percent fewer leaks from the funnel, and
- 209 percent stronger contribution to revenue.
These are pretty eye-opening numbers. They come from a recent survey of 500 businesses around the world, conducted by my friends and colleagues at MathMarketing.
4. Now the other conversation that the president and the marketing folks want to have is, “Is marketing contributing to revenue opportunities?” Or, at least, are there goals in place for making that happen? ‘Cause frankly, in many companies that aren’t very sophisticated with marketing yet, they don’t see marketing as contributing to revenue, but they want to make that happen.
It won’t happen overnight, but you can at least put the goals in place, start to put things in order so that marketing can be generating revenue opportunities on an ongoing basis. Now averages can be dangerous, but I’m getting reports and surveys that show that in high-performance companies well north of 20 percent of the revenue is generated by marketing-generated leads.
5. And the last point I want to make is that the CEO should be looking at the marketing plans, and how the budget is allocated to that plan, and asking whether the marketing resources are correctly allocated to tactics that influence the top of the funnel, the middle of the funnel, and the bottom of the funnel.
In other words, how is marketing assisting with the progression of buyers through that funnel – right to the point, and maybe even after the point, that they hand off that lead to sales? Though sales is in charge of the lead at some point, they need materials and resources to help them close the deal. So: Are the budget and the resources of marketing being adequately allocated to the right places throughout the funnel, not all at the top, not all at the bottom, but throughout?
LEO: What I really found interesting was the point you made about sales and marketing aligning not just to internal processes and procedures, not just with each other, but to the buyer’s journey. Now: How should a modern business leader tackle sales and marketing alignment? Conventional wisdom says that these two groups are often at odds with each other, which can lead to misplaced leads and lost revenue. What can be done about it?
CHARLES: Leo, you’re good with the very, very large questions. That question could occupy hours of time. Let me boil it down to something very succinct: In order for sales and marketing to become aligned, the alignment starts at the top. The CEO must make it a critical initiative and, frankly, butt heads together if that’s necessary to make it happen. Now earlier I quoted some statistics about the benefits of being a well-aligned company. I’d like to share a few more.
When sales and marketing plan together, I’m just talking about planning here, the results are noteworthy. What happens is:
- The acceptance of qualified leads by sales increases 31 percent.
- The closure rate for marketing qualified leads shoots up 56 percent.
- And the revenue from new business soars by 62 percent.
This comes about when sales and marketing get together, put their revenue generation plans in place and work together on it, as opposed to sales doing their plan and marketing doing their plan and hoping that the two coincide. When they work together, magic starts to happen. Putting a common plan together is just one facet of alignment.
There’s a second thing that needs to be considered. Alignment involves processes, it involves terminology, definitions, technology, and what’s frequently overlooked: culture. There is a culture in our sales departments. There is a culture in our marketing departments. There is a culture in our companies. If we can’t change the culture and bring the culture together within sales and marketing, we’re going to have a hard time being effective in the implementation of integrated processes, terminology, and technology.
Now, when you’re trying to make alignment happen, having a respected third party to help direct and facilitate the alignment can make a big difference. But it’s key to realize that the alignment is occurring at different levels. Like I said: process, terminology, technology, and culture. You may need different third parties to come in and help depending on which level of alignment it is. A person that can help you with culture and change management is likely going to be a different person or different team to help align the processes and technology. That’s my point.
So it starts at the top, it has to be a very critical business initiative, the CEO has to stay on top of it, and then sales and marketing, the processes, terminology, technology, culture need to start coming together.
LEO: How has the funnel changed in the last 10 years, given the rapid evolution of technology and digital media?
CHARLES: Smart companies are realizing that buyers of their products or services complete 60 to 80 percent of the buying process before they elect to engage with the company’s sales personnel, if at all. This places a very large responsibility on marketing to influence and progress buyers deep into the buying process, much deeper than traditional marketers are accustomed to operating. It’s so, so much more than just building awareness today.
Now, if we’ve done a good job of modeling our funnel after the buyer’s journey, this means that marketing has to generate, nurture and progress leads to a point that is much further down the funnel before the lead is suitable for handing off to sales. But it also means that if marketing is doing its job right, the leads given to sales are more highly qualified than in years past. Because marketing is nurturing it, generating it, has developed the lead scores, and knows more about that lead and when it’s appropriate to hand it off to sales, than ever before.
Marketing simply cannot hand names to sales and call it a day. I remember years and years ago when I was in marketing leadership for different companies. And we would go to a trade show. And at the end of the trade show we’d collect the lead forms, we called them lead forms. And the business cards that were in the goldfish bowl. We’d bundle it all up and hand it to the sales manager and say, here you go. And say okay, our job’s done, look at all these leads. Well they’re not really leads, they’re just names. And fortunately those days are over, at least they certainly should be.
LEO: Charles, in your opinion, what is the single biggest marketing challenge businesses are facing in 2014?
CHARLES: From a high level, I think the biggest challenge for a company is to stay truly customer-focused, and avoid becoming product-focused. Yes, this is an age-old issue, but it remains a biggie in my book. Customer focus impacts everything the company does and how it does it. To many companies, customer focus is given only lip service. And the brand suffers as a result. Another challenge for companies today is to set the right expectations for the marketing function. Then give it the people, the skills, the tools and the resources necessary for success.
And here’s a key. This is a challenge for a lot of companies. Patience. Marketing effectiveness today is about testing and continual improvement, not unlike quality improvement philosophies in the other parts of our business. It is a game of incremental advancement of base hits, not grand slams. Of increasing response rate by 0.3 percent, and then 0.5 percent, on and on and on. Continually testing, refining, improving along the way. And you might ask yourself, well is all that worth it? Okay, just ask the companies who made the right investments, particularly in sales and marketing alignment, and are seeing a 209 percent increase in marketing contributed revenue, as the MathMarketing’s latest survey indicated.
So those are really the challenges. Customer focus (by the way that also means focus on the buyer’s journey), aligning sales and marketing, putting coordinated plans into action, having the patience to test, refine and pull the trigger again, and putting everything into place with the right people, right processes, the right technology, so that success can happen, and marketing can drive revenue.
LEO: Thank you Charles, and thank you, listeners, for tuning in to today’s Act-On conversation. We invite you to visit Act-On’s Center of Excellence for more resources about all aspects of marketing.