Entries Tagged as 'sales and marketing alignment'

Revenue Performance Management: An interview with Jon Miller, VP Marketing and Co-founder of Marketo

This is one of a series of occasional interviews with top practitioners on topics of interest to B2B lead generation, marketing and new business development professionals.

Jon MillerJon Miller is VP marketing and co-founder of Marketo, one of the marketing automation solutions supported by AcquireB2B, our B2B agency specializing in driving more leads and sales with B2B marketing automation.

Jon, named a Top 10 CMO for companies under $250 million revenue by The CMO Institute, graduated magna cum laude in physics from Harvard College and has an MBA from the Stanford Graduate School of Business.

I had a conversation with Jon about Revenue Performance Management and the current state of Sales and Marketing:

Jon, what is Revenue Performance Management?

Revenue Performance Management, or RPM, is a strategy to optimize interactions with buyers across the revenue cycle in order to accelerate predictable revenue growth. RPM is a systematic approach to identifying the drivers and impediments to revenue, measuring them, and then optimizing them for top line growth.

Marketo provides the tools, thought leadership, and best practices to change how Marketing and Sales work, and how they work together, to help companies adopt RPM and accelerate predictable revenue growth.

What’s your take on the current state of Marketing and Sales? 

The fact is the current sales and marketing model is at best obsolete, and at worst, totally dysfunctional. The following two data points help to tell the story:

  • 52% of Sales reps do not achieve their Sales goals (CSO Insights 2010)
  • 94% of Marketing qualified leads will never close (SiriusDecisions 2009)

The dysfunctional state of the revenue creation process is partly a result of the longstanding inability of Sales and Marketing to work effectively together. And it’s also due to the volatile and increasingly complex business environment in which digital media, and especially social networks, have caused a sea change in buying behavior. This has given even more control to customers and prospects, enabling them to actively search online and collect information from trusted sources before making their buying decisions.

In the new model, companies transform the way their Marketing and Sales teams work by:

  • Managing the Marketing department as a true revenue-generating organization;
  • Implementing a systematic process of nurturing prospective buyers through the revenue cycle, and measuring buyer engagement at every step of the process;
  • Providing Sales teams with the information and tools they need to prioritize their time so they can engage with the most qualified prospects, at the right moment;
  • Measuring the effectiveness and ROI of spending on people and programs at every step of the Revenue Cycle across Marketing and Sales; and
  • Allocating investments to accelerate results and revenue performance.

Jon, you mentioned the “Revenue Cycle.” How about giving us your definition?

The Revenue Cycle starts from the first contact with a prospect and continues through the sale and beyond to the customer relationship. This is important since when Marketing and Sales coordinate their activities as part of a unified Revenue Cycle, companies get better at properly identifying and prioritizing opportunities… and better quality leads result in more sales wins and ultimately more revenue.

The Revenue Cycle requires coordinating Marketing and Sales activities throughout the entire cycle to generate maximum impact. The old model of a linear handoff from Marketing to Sales must give way to an intertwined model where both organizations jointly own prospect relationships and coordinate their activities.

The Revenue Cycle requires collaboration between Marketing and Sales activities, but this is easier said than done. The key challenge is that each function works differently, thinks differently, and is measured differently.

In the past we discussed the idea of applying the Six Sigma process to the Revenue Cycle. Could you please share some of your thoughts about that?

In the past 30-plus years there has been a significant transformation in supply chain operations. Businesses have been able to make them quicker, cheaper and more predictable, mainly due to advances in technology. Six Sigma and other quality improvement programs strip inefficiencies out of the system. As a result, lean businesses have increased productivity and saved trillions of dollars through just-in-time inventories, speed-to-market processes, etc.

In contrast, progress to improve productivity in the demand chain has been almost glacier-like. The reason is many Sales, Marketing and Service operations continue to use antiquated processes in a marketplace that has changed dramatically due to the Internet. So why not apply the Six Sigma process to demand chain operations?

To do this, best practice companies are measuring performance indicators in order to continuously improve their revenue-producing processes in the same ways they did on the cost side. To continuously improve revenue performance, organizations must measure and analyze the operational and financial impact of each Sales and Marketing activity across the revenue cycle.

For instance, with lead generation campaigns, measurements include the speed and volume of leads gained, nurtured and converted via multi-marketing platforms with varying calls-to-action… as well as calculating the costs and revenue impact of each activity. By understanding the results of these disparate activities by channel, product and buyer, organizations can identify and remove defects, and improve on those efforts that have the greatest positive revenue impacts.

So how do we get there from here?

The last frontier of productivity is how companies choose to manage and generate revenue. In today’s budget constrained environment, this commitment to measurement and operational excellence is more needed than ever.

By measuring and installing processes to continuously improve the demand chain, companies can significantly increase Sales and Marketing effectiveness (revenue capture) and efficiency (cost reductions) quickly, cheaply and more predictably.

Jon, thanks for taking the time to share your thoughts on Revenue Performance Management and the current state of Sales and Marketing.

Readers, what are your thoughts on the subject?

Please add your comments by clicking on the word “comments” in the line below the Share button.
 

 

Looking for a roadmap to more revenue? Read this book!

Kristin Zhivago is a revenue coach who helps CEOs and entrepreneurs increase their bottom lines by understanding what their customers want to buy and how they want to buy it.

Roadmap to Revenue:  How to Sell the Way Your Customers Want to BuyIn her new book, Roadmap to Revenue: How to Sell the Way Your Customers Want to Buy, Kristin lays out her methodology and processes garnered from years in the field working with corporate clients, and their customers and prospects.

The book gives you a step-by-step guide to making more money by selling people what they need… instead of what you want to sell.

Kristin’s proven Roadmap to Revenue methodology makes it possible to reverse-engineer successful sales, so new sales can be manufactured in quantity.

Unlike most books targeted at senior management that tell you WHAT you should do, this one goes into extensive details about HOW to execute on each topic covered. The book is formatted in logical steps to help you discover and document your customer’s buying process, so that your sales and marketing efforts can be redesigned for how your buyers want to buy.

Buyers have changed the way they buy. It’s time to change the way you’re selling.

For years companies crafted and delivered their messages, which customers depended upon to make buying decisions – because it was the only information available to them. Now, when customers are looking to buy, they start by “Googling” the product or service, ignoring the company’s sales messages, and reading what third parties have to say about it. Then, if the product or service still looks promising, the customer goes to the company’s website or salesperson, hoping to get their last few questions answered - usually questions that are specific to his situation or preferences.

In other words, most sellers no longer sell the way customers are buying.

Their selling system is broken. The good news? The secret to higher revenue is locked in the minds of your current customers. After purchasing and using your product or service, if approached correctly, customers are willing to provide information about their buying process:

  • What drove them to buy
  • What they were concerned about as they bought
  • How they came to their buying decision
  • Why they bought from you instead of your competition
  • How they would sell the product or service to others
  • How they feel about it now that they have experienced it

Roadmap to Revenue shows you exactly how to obtain this priceless information, and how to use it to reliably increase your sales.

Through several years of experience, and literally thousands of interviews, Kristin has learned what works and what doesn’t, and she shares all of this information with you.

For example, many business executives I speak with are interested in social media as a market research tool. I believe, and Kristin concurs in the book, that social media can be an effective research tool for low cost consumer products and services. But for B2B, especially complex, big-ticket, long buy cycle products and services, social media is not the most effective way to uncover the real reasons people make a buying decision.

Roadmap to Revenue also discusses the various research methodologies used by corporations and consultants. Kristin makes a convincing argument that face-to-face one-on-one interviews and focus groups are significantly less valuable (and less cost effective) than one-on-one phone interviews. I’m not going to go into detail here… you’ll have to buy the book.

Customers expect certain promises to be kept, and they value relevancy like never before.

Roadmap to Revenue: How to Sell the Way Your Customers Want to Buy will help you find out what matters to your customers and the promises they expect you to keep.

While you’re no longer in control of your message, you are 100% in control of your company’s behavior – what your people do and how they do it. Roadmap to Revenue will teach you how to identify the promises you should be keeping, and then make revenue increasing changes to your five promise-keeping resources: your passion, policies, products, people, and processes.

Your own customers are the key to higher revenue. They will tell you exactly what you need to know. You won’t have to guess or assume anymore; you’ll be able to move forward, logically, in confidence, following your own, unique roadmap to revenue.

 

Sales and Marketing Integration: An Interview with Elizabeth Vanneste, CMO of Miller Heiman

This is one of a series of occasional interviews with top practitioners on topics of interest to B2B lead generation, marketing and new business development professionals.

 Elizabeth Vanneste, CMO of Miller HeimanMy guest today is Elizabeth Vanneste, Chief Marketing Officer, Miller Heiman, a global leader in sales performance solutions with more than 30 years of documented results. Elizabeth has led successful marketing and sales efforts at a number of prestigious companies including MFS International and Level 3 Communications.

Elizabeth, during a recent webcast I attended, you talked about sales and marketing alignment impacting sales results. Please clarify what “sales and marketing alignment” means.

First, sales and marketing need to be focused on the same goals. That sounds obvious but often the new business and base customer growth goals assigned to sales don’t translate easily into the lead generation and customer retention and satisfaction goals given to marketing.

Second, sales and marketing need to agree on common language and definitions. Who is our Ideal Customer? What is our target market? What is a "sales-ready lead?" How do you define customer satisfaction and loyalty?

Once you’ve agreed to common definitions you need to agree on your key messages – What is your value proposition? What is your elevator pitch? Key brand messages?

Finally, there needs to be an agreed business process or meeting rhythm that will keep the two groups in alignment. If sales is finding that the messages are not resonating with clients or the leads deemed "sales ready" are not a good fit, or marketing determines that the customer relationships are not as profitable as they should be, then the two groups need to revisit the definitions and messaging to make sure that they are being effective. At Miller Heiman we have a bi-weekly call with the sales team to review the new leads, understand what resonated with the prospect and gain insight into how well the prospects align with our Ideal Customer profile. Sometimes the action items from these meetings lead to new campaigns or a change to a definition.

The impact is dramatic. In the most recent Miller Heiman Sales Best Practices Study 90 percent of the World-Class Sales Organizations (those are companies that were more likely to report growth in key metrics such as customer retention and sales quota attainment) agreed that sales and marketing are aligned, versus 30 percent for all other organizations.

Please tell me more about this research study.

Miller Heiman’s annual research study of sales practices, success metrics, and World Class Organizations – the Miller Heiman Sales Best Practices Study – has become recognized as the largest continuous research project dedicated to sales performance in the world. Since the study was launched in 2003, more than 23,000 sales professionals have participated. The research results support benchmarking exercises that enable companies to understand how they compare to their peers and how they can better identify areas for improvement.

You’re welcome to download the executive summary of this year’s study: Driving Sales Results in Any Economy.

Back to marketing and sales alignment, Elizabeth, what impact does this alignment really have?

In these days of tight budgets and scarce resources, being aligned improves productivity. According to our study, World Class Sales Organizations report better close rates.

In fact, the study found that more than half of those World-Class Sales Organizations reported a close rate of greater than 60 percent, compared to just only 16 percent of others.

What do marketing teams need to do in order to reach this level of alignment?

A regular (weekly/bi-weekly) lead huddle meeting is a great vehicle. Review all the new leads and the initial conversations with sales. What do the leads have in common? Why are they interested in your company? What are they trying to accomplish? Let marketing ask sales questions about the leads to understand quality and understand common challenges.

Elizabeth, what else can the two teams, marketing and sales, do to better collaborate, to get out of their respective silos?

Sales and marketing can also collaborate on proposals and deal support, internal communications to share success stories, and external communications and public relations.

Is there anything else marketing professionals should know about to help drive sales results for their company?

In addition to understanding customers, marketing needs to understand how salespeople think and how they work. A marketing professional who has walked in a salesperson’s shoes has a unique respect for the pressure and the challenges faced by salespeople. Marketing professionals who respect the sales role are better able to provide the tools and support needed to ensure that sales is successful. Of course, savvy salespeople know they will be well supported when they respect their marketing colleagues as well.

Elizabeth, thanks for taking the time to share your thoughts and the executive summary of the Miller Heiman Sales Best Practices Study.

Readers, what are your thoughts on the subject?

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