Can Marketing Speak the Sales Language: Interview with Kerry Langstaff

 

GG: today we are here w/ KL, vp of marketing for Xignite, privately held cloud company delivering financial market data used to power mobile apps, websites, and corporate portals

GG: tell us about your background

KL: doing marketing communications and product marketing for over 20 years in the Silicon Valley primarily to b2b technology companies. Worked for large enterprise companies i.e. cisco, juniper networks, 3comm. Held own agency where worked w/ a lot of startup companies. Done fare share at startups myself creating go to market plans and organizing market departments. Currently I am the vp of marketing at Xignite

GG: quite a spectrum. Interesting, n ot a lot of ppl have experience across an agency, startups and large enterprise companies.

So one of the things you and I talked about earlier is we want to cover the issue of sales and marketing alignment, specifically how that leads to revenue growth. Why don’t you tell us a little bit about the topic we want to cover today?

KL: I’ve always felt that it’s very important for the mktg dept and sales dept to align. What I mean by align is they have the common definitions of what a lead is, what an opportunity is. There is agreement on how to handle leads. I know in the past sometimes sales and mktg can butt heads, and you hear the age old sales says, “Marketing doesn’t give us enough leads and the leads they give us are crap.” And marketing says, “We give sales all these leads and they never follow up on them.” What I’m really trying to do with aligning those two teams, those two departments, is get rid of that negativity.

GG: tell me a little bit about… where do you think that comes from, that negativity? And then how do you try to eliminate that?

KL: I think that in the past, sales didn’t have a good understanding of what marketing was all about, and marketing wasn’t revenue focused. So, one of the ways that I cut that off right away when I’m working with a company is that my marketing goals are based on revenue goals. I also base them on quotas so when I’m talking to sales I’m talking in their language. I don’t talk to sales about leads.  They could care less about leads. What sales care about are qualified leads that will become an opportunity. If I sit down in a meeting and I say, “We generated 4000 leads last month;” they go “so?” What they really care about is we generated a lot of leads and if those leads have 300 really qualified leads that have turned into opportunities. And if from those we’ve closed x million in business.

GG: That’s the sales language they want to hear from you. That makes a lot of sense.

KL: Absolutely, they don’t care about… I’ve found that talked to sales about campaigns or marketing automation using Eloqua or Marketo, or click through rates/open rates. They could care less about that and rightly so. What they care about and what marketing should care about is what programs are you doing to get them leads to help them achieve the company revenue goals?

GG: why do you think people in your shoes in other companies don’t always do that? Because this issue you’re talking about, I’ll call it “Head-butting between sales and marketing, or lack of understand between sales and marketing” has existed for a long time and continues to exist for a lot of companies. And yet, you’ve come up with an approach that is, you’re essentially saying, “how do I serve the sales organization by speaking in your language?” Why do you think other companies don’t do that?

KL: I think one of the reasons that some companies… I think the reason that some marketing depts don’t focus on revue as a goal is simply b/c they either don’t know how or cannot measure it. If they haven’t setup the proper systems in place where they can track a lead from the moment it comes in all the way through the buying cycle to when that person purchases, or renews, or cancels. Then that’s allowing them to be able to track marketing’s contribution to revenue and sales. But companies that don’t have those systems setup or in place have a lot of difficulty doing that kind of metrics and analytics.

GG: Even in our experience, even some of the companies that do have marketing automation probably use only a small percentage of what’s possible and haven’t yet gotten to that point where they feel like they can measure things effectively

KL: Absolutely. I read a study recently that said something like only about 8% of b2b companies are even using marketing automation and of those using most are only using about 2% of the automation functionality. I think a lot of ppl use marketing automation as a basic email distribution system, but it goes beyond marketing automation. It goes into having your goals aligned. We can look at a revenue goal and say our revenue goal for the year is 1 million – what percentage should marketing contribute to and what percentage should sales? That’s really where you start the dialogue. And then through analytics you can look at your conversion rates and that kind of thing. And I literally can build a model down to the dollar to say if marketing needs contribute 40% revenue contribute then we need to generate x amount of leads that will convert into x amount of opportunities that will convert into x amount of wins equaling that revue. And I usually build those types of detailed models. Those models can be built by reps, for quotas, built by territories, or they can be built in general for the entire revenue goal.

GG: Yeah, so I think you’ve touched on one of the reasons why this doesn’t happen in a lot of companies, which is… I’m going to bet you a lot of people who are sitting in your shoes, or wearing your shoes, are not used to signing up for a number. And that’s a pretty scary thing if you’ve never done it before and you don’t have the ability to measure it effectively.

KL: Absolutely. I would bet that ppl who aren’t used to signing up for a number better get used to it b/c that’s really what it’s all about these days. For the past 5-8 years I’ve always signed up for a revenue number. It could be a percentage contribution, and there’s always arguments about how is marketing going to count what they contributed, and we can go into that later. But I do think it’s really important. At this company I’m a member of the executive team – I sit right alongside sales and reporting to the CEO and we both have the same revenue goals. Our bonuses are both based on how the company does.

GG: I think that’s… you’re right. A reflection of what we’re going to be seeing in the future. One of the things I’ve argued for a long time is that the CMO often doesn’t have the same credibility in the executive circle as other executives do. I think part of it has to do with this signing up for a number issue. And I can tell you you’re very unusual in that regard. There are very few ppl who have signed up for a number or even want to begin that dialogue. But I think that’s where credibility comes in.

KL: Right and I know that marketing execs might be thinking “once I toss that lead over the fence to sales, I don’t have anything to do with it anymore. I can’t help them close the deal.” And that’s where I probably disagree. First of all, you have to make sure that the leads you’re tossing over to sales are good. You can’t just send them any and everything. You need to set up processes with lead scoring and maybe inside sales for further qualification before you even get that lead to sales. But once that lead is qualified and converted into an opportunity, marketing can continue to help. They can do pipeline acceleration programs helping sales with more individualized programs for lets look at all these opportunies who’ve been stuck for the last 30 days and haven’t moved forward. What can we do to help you get them back in touch? Or let’s look at these opps that are about ready to close but for some reason they haven’t. What can marketing do to assist sales with that? Marketing’s role in closing a deal doesn’t just stop with generating leads.

GG: Well I’m really glad you brought that up b/c we’ve been talking a lot about this topic or this phrase called “handing off a lead” and we’ve said “Let’s look at differently – this isn’t about handing off a lead to sales. This is rather introducing an opp to sales.” But in the introduction you don’t, as marketing, lose the relationship you have with that opp, you maintain a connection. Like you said, you condense, step in and assist the sales team through programs – maybe revenue acceleration programs or what have you – maybe even after they’ve begun their relationship with that lead or opportunity.

KL: Absolutely, and part of when I talk about sales and marketing alignment, what I’m really talking about is pretty simple. It’s having a common definition for what a qualified lead is. Let’s all agree that we have to answer these 5 questions about this prospect and they have to answer them this way before we’ll say this lead is qualified. Because I have one sales rep saying “well if you said this is qualified,” and another said “well you said this is qualified” – you can’t measure anything. And then the next really important thing to agree on is when are we going to create an opportunity? What info do we have to have? And what are the 2-3 criteria that we have to know to be able to create an opportunity? In some companies that may be banned – budget authority, need and time frame. In other companies I’ve worked for it may not be important to know the budget or time frame. They just need to know the decision maker and the fact that this company has a problem that our product or solution can solve. The other thing w/ alignment is agreeing on what the handoffs are – whether it’s a handoff from marketing to an inside sales team of a lead, or a handoff of a lead from an inside sales team to a field sales rep. There needs to be service level agreements or SLAs of when marketing gives inside sales a lead you have 48 hours to follow up. In 48 hours if you haven’t contacted that lead, we’re going to take it away and give it to someone else. Or when inside sales gives a lead to a field sales rep – “hey mister field sales rep, I called this guy, he’s qualified. You’ve got 7 days to either convert this lead into an opp, or disqualify it, or send it back to inside sales for more work.” But you need to have some agreement on when you hand it off, when you convert it, how long they will hold it. What’s going to happen when that doesn’t happen and that type of thing? The sales leaders have to be in complete agreement. So marketing isn’t just going to take away a lead from someone, the sales manager will. The sales manager will say “our agreement w/ marketing is you had 48 hours to follow up and you didn’t. So I’m going to now reassign this lead to a different rep.”

GG: Good point. I was going to ask you – at what level does that agreement need to be struck? I’m assuming it’s the most senior level b/c you need buyoff by senior mgmt so they can move those leads around.

KL: I would say absolutely at the highest level. I usually try to sit in the VP of Sales weekly staff meetings. I’m treated as part of that stuff. I also have the sales rep, as needed on a field basis, sit in marketing meetings. The inside sales team, although they don’t report to mktg, we have an agreement where they’ll attend mktg meetings and someone from mktg will attend their meetings. There has to be a lot of communication, but it has to start at the top and work down.

GG: It’s interesting. I was going to ask you – who should really drive this alignment? I think the answer is clear. It’s really the person who’s sitting in your seat.

KL: I’ve found in the past years it’s been me that’s driven in. mostly b/c sales has never worked w/ a mktg team that’s even interested in their revenue goals, or interested in their quotas. Usually its me trying to explain and educate how I would like this to work. At one particular company when I started, it took me a month to even get a first mtg w/ the VP of sales. They just saw no reason to meet with the new VP of marketing. But once I was able to sit down with that person and explain how I like to work, and the fact that I was here to serve sales and help them achieve their revenue goals. Within a year at the sales national meeting, we were standing on the stage together – VP of Sales, VP of marketing – together saying welcome to everyone.

GG: I can tell you – we work with a lot of companies, Kerry, and its very unusual. I’m impressed with what you’ve done here.

KL: I would say the one thing I haven’t achieved that I’m still trying for is marketing should be eligible for club.  

GG: hey, if you have a number, why not?

KL: if marketing has a number and you’ve agreed on a contribution, people involved in that should be eligible for club. That I think will be a long time coming.

GG: yeah, I can see that. One last question around this topic – so we haven’t talked about the CEO and that person plays a role in sales and marketing alignment. Can you talk a little bit about what you would recommend to our listeners to bring that person into the conversation and help grease the skids?

KL: from my experience, when you start talking contribution to revenue and to our ROI and measurement – the CEO and the CFO will love you. I’ve said before that marketing needs to learn to speak CFO. Marketing needs to be able to talk about contribution to revenue, and cost per lead, cost per opportunity, and return on investment. Once you’ve shown that you’re going to be able to prove the need for marketing and show that marketing can actually be a revenue contributor instead of just a costly department, then I don’t think it’s an issue at all working with the CEO. I’ve always sat on the executive team reporting to the CEO alongside sales, so that’s actually never been an issue for me.

GG: That’s great. Well one thing I do want to ask you is, we’ve been talking about sales and marketing alignment as it relates to leads and opportunities. How do you justify to the CFO, VP of sales, and the CEO all your investment in things that are higher in the sales funnel? Awareness, for example. When those are not… you can’t tie that very effectively to a number.

KL: that’s a really good question. I think that more and more these days, I do less awareness programs. Or any awareness programs that I do have a demand gen element in them. If I’m running an ad, I will have a call to action in the ad leading to a personalized landing page that I’ve set up in my marketing automation system so that while that ad might be generation awareness, someone can actually go to a web page and download something and I can measure. If I’m doing PR and social media, again, I’m either try to drive ppl to my website, or for a free trial, or to a webcast. So I really wouldn’t do just any generic awareness campaigns these days. But that could be b/c of the companies I’m working with and the types of companies. I do try to tie metrics into everything. If it’s a social media campaign, I’m going to show the growth of followers. Or I’m going to show how many times something was retweeted. I recently did a webinar and I promoted that webinar on Twitter, LI, FB, and had registrations URLs specifically for each of those social channels. So I was able specifically to see how many ppl registered from seeing this on FB, how many ppl registered from Twitter? And that type of thing.

GG: Excellent. So I guess to summarize your answer – you’re not spending a whole lot on the awareness components. But when you do, you’re going to measure what you’re doing so that you can at least say “I’m moving ppl down the sales funnel toward a webinar and here are the things that are effective in making that happen. That webinar causes people to register and then they enter a relationship with you that you then nurture”

KL: Correct. I would say that I don’t just do awareness. I try to have a demand gen element in all of the programs that I look at.

GG: … I’m impressed with what you’re doing. Particularly the focus on how do I sit down w/ the sales team and talk about their goals and what we can do to contribute to their goals. And the most impressive thing is signing up for a number, which I agree w/ you, it’s a pattern that’s just beginning to emerge. I think we’re going to see a lot of people who are running marketing all of a sudden have to figure out what you have figured out.