By Matt Heinz, President of Heinz Marketing
Late in 2015 we started producing a radio program called Sales Pipeline Radio, which currently runs every Thursday at 11:30 a.m. Pacific. It’s just 30 minutes long, fast-paced and full of actionable advice, best practices and more for B2B sales & marketing professionals.
We’ve already featured some great guests and have a line up of awesome content and special guests coming up. Our very first guest was Funnelholic author and Topo co-founder Craig Rosenberg. Next we had Mike Weinberg, incredible writer, speaker, author, followed by Conrad Bayer, CEO & Founder of Tellwise. Recent Guests: Jim Keenan; Joanne Black; Aaron Ross; Josiane Feigon, Meagen Eisenberg, and Trish Bertuzzi.
We cover a wide range of topics, with a focus on sales development and inside sales priorities heading into and throughout the year. We’ll publish similar highlights here for upcoming episodes. You can listen to full recordings of past shows at SalesPipelineRadio.com and subscribe on iTunes.
Our own Brian Hansford, VP of Client Services takes the show this week:
We surveyed over 250 B2B sales and marketing pros to learn how they achieve and measure revenue success. Through their insights we’ve learned how B2B marketing teams are managing, optimizing and reporting their results under increasing revenue accountability.
Our research shows the best-performing companies have marketing organizations that share revenue accountability with sales teams. Companies are missing sales goals when their marketing teams don’t have revenue accountability or responsibility! Matt is traveling, so we are fortunate to have our on VP of Client Services, Brian Hansford to host this week and go over the highlights from the report.
Some of the points covered include:
• 64.2% of respondents report their marketing organizations have increased revenue responsibility and are achieving or exceeding revenue goals
• 71.3% of marketing organizations have increased accountability for revenue goals
• 61.8% achieve or exceed revenue goals because their marketing org has increased revenue accountability
• 63.6% experience improved sales performance their marketing org has increased revenue accountability
• 75% do not achieve revenue goals when marketing doesn’t have increased revenue accountability
• The #1 ranked success factor in achieving revenue goals is an effective marketing and sales partnership
Brian Hansford: So Matt has called me off the bench once again to host another episode of Sales Pipeline Radio and I have a great time doing this and have some really good information here that I think is going to be helpful for both B2B sales and marketing pros. We’re going to talk about some marketing performance here.
Paul: Exactly. Marketing performance management survey highlights. Give us a little background about what this is and then tell us what you found.
Brian Hansford: Sure, sure. About three months ago we started a survey where we wanted to measure how effectively B2B sales and marketing pros are working together, number one, and how they are measuring success, what are their metrics for success and how they are looking at revenue and managing their performance against revenue goals. It was very fascinating. Some great information in the report that we’ve just published and it’s available from our website. But I wanted to go through some of the highlights on this and give some details. We surveyed over 250 B2B sales and marketing professionals and a variety of roles, including CMOs, marketing VPs, sales VPs, marketing ops, sales ops and product marketing, so there was a variety of roles there. It’s very telling and I think the data shows where B2B revenue performance and revenue management is actually going.
I have a few other studies that I’ll mention here throughout my discussion that will highlight and emphasize or reinforce what we’ve discovered. You know, I guess the bottom line is, as B2B sales and marketing pros we are living and working in incredibly tumultuous and dynamic times. The pressure of growth is greater than ever and there’s more accountability and responsibility for the growth of a company or an organization that’s placed on marketing and sales working together. Interestingly enough I’ll have some very telling data on how revenue accountability has a dramatic impact when marketing has that accountability on sales performance.
You know, and there’s all kinds of things that are thrown into this world. There’s marketing and technology environments that have exploded. We’re generating and capturing massive amounts of data on a daily basis. Content is created. So much content is created now and offline and online channels. More channels are used now for demand generation and customer engagement than ever before and that’s for both sales and marketing doing their thing as they work with opportunities and customers. But here’s the catch – and this has been a challenge throughout my career. I’ve been in sales and marketing B2B for the last 25 years. That is marketers continue to struggle to drive pipeline and measure their influence on overall revenue and helping the sales teams win the business.
Marketers use old techniques, and you know, they’re thrown into the old activity-based models of site visits and opens and clicks and a lot of those vanity metrics. That’s all great and those are important – they do have their place – but if you put all of these vanity metrics on a slide for your quarterly business review that goes to the CEO and the CFO, that means nothing to them. That means nothing because you are not showing how your marketing engagement is driving revenue. When you get stuck in the old techniques and activity-based models, you’re really boxing yourself into a corner, but there’s new technologies and there’s a flood of ideas that are helping marketers more effectively manage and measure what is working and what’s not.
That gets into the crux of marketing performance management. Essentially what you’re doing is you are measuring revenue performance against objectives and so what are the outcomes and how are you measuring or what are the outcomes against the goals and objectives? What did it take to get there? What were the channels that were used? What was the budget that was spent? How long did sales take? All of those elements come into play when you start measuring them together and some fascinating data and very valuable data starts to emerge when you look at the sales pipeline in that manner. You know, how many touches does it take? Again the budget, what’s the overall spend? The channels – what happens when you transition leads from marketing to sales at where you can still have marketing activity take place? Need to look at the big picture or what we call full funnel marketing. There’s no longer this line of demarcation between sales and marketing where you generate leads and you just throw them over the fence. You go to a trade show, you get 500 lead sheets and you throw them over the table to sales and you never know what happens, what worked from there on and then magically we get some revenue at the end of the quarter.
We’re going to take a short break here, but with that intro I want to go into some of the statistical highlights that were the percentages and what not that we came up with. Then we’re going to use that as some takeaways to help you move forward to look at how you can build a stronger alignment and partnership with your sales teams and also take on some accountability and learn how to measure some of these data points. I think we have a short break here, Paul, and then when we come back, we’re going to start getting into some of the data that we’ve learned from our marketing performance management research.
Paul: Alright, we’re going to head back and get some more insights here, but before we do, can I ask a question as I’m just listening here?
Brian Hansford: Ask away.
Brian Hansford: Please.
Paul: You know, you struck me when you came up with the term “vanity metrics.” It seems like we are filled with vanity metrics. I hate to say that.
Brian Hansford: Absolutely.
Paul: All we do is we want to count clicks and opens and likes and followers and downloads and all these things that somehow make us feel good that we’re doing something. Like you said, it gives you some indication but at the end of the day, what does it mean? What does it mean and what do you do with vanity metrics? Do you just put them aside and say, “That’s nice,” or is there a way to turn those into meaningful statistics?
Brian Hansford: Yeah, so that’s a great question and vanity metrics, they do have a place. They absolutely do have a place, but you have to look at them in the right context. I think with campaigns and various tactical channels that you use, some of those metrics are very important to show the level of engagement that you have with your audience and whether or not you’re resonating with your audience. The problem is when you’re looking at overall revenue performance, ultimately marketing – that’s what we’re trying to do – is create customers. When you’re looking at that, those metrics, they’re very, very hard or so early in a stage or so far removed from how you measure the impact to revenue that if you present that information to a CEO or a CFO or even if a CEO or CFO likes that information, it doesn’t tell you that revenue story. I think it’s very important to use those metrics in the right context and in the right situations and that primarily, I believe, is in tactical reviews of your campaigns and there’s all kinds of ways that you can look at that, so yeah, that’s a great question.
Another thing too, just add on this real quickly before I get into the data. I think it’s very comfortable. It’s easy for marketers to fall back on those metrics that you can pull from a dashboard, so anyway, that’s that. It’s a great question and pretty much any time I present or talk about that I get that question and it’s very valid, so thanks for asking this, Paul.
Paul: Well it all makes us feel good, you know, to know that we’ve got 6,000 followers and 10,000 likes and 400 clicks or opens for something, but yeah, like you I always wonder, “What does that really mean?” You’re saying it’s really just kind of an indicator of engagement that people like you and are following you and there’s an opportunity to learn more?
Brian Hansford: Sure, sure, absolutely. And it can show, you know, if you have some content assets or an interesting story in a campaign or maybe you have a new offering – a new solution or a product that you’ve gone to market with. Those can be some very nice indicators on how well that’s resonating with your audience, but you have to keep that into context in the overall scheme of things when you’re looking at the big picture of your revenue pipeline.
Paul: Alright, well let’s dive into your data here. What do you got for us?
Brian Hansford: Yeah, so here’s some highlights and again, as I mentioned before the break, I encourage all of you to look at this if you are marketers or if you’re sales people or if you’re a CEO or a CFO. Absorb this data and think about how you could learn from this to help your organization elevate and grow the way it performs with revenue generation. 71.3% of marketing organizations are getting increased accountability or responsibility for revenue goals and in my opinion that’s a very good thing, because that ties the organization closer to revenue and it also gives that shared goal or a shared goal between marketing and sales. That’s a forcing function with alignment.
61.8% responded … Now I love this stat and this is very revealing here. 61.8% responded their company achieves or exceeds revenue goals as a result of increased marketing accountability and responsibility to revenue. Now in order to have that increased accountability and responsibility you need to be able to reliably and effectively measure the overall health of the pipeline and what’s moving through and the deals that are won or lost. How many touches has it taken? How much money is spent? Where are all the touchpoints and what’s the data that emerges there? I love that statistic because it shows that when marketing starts becoming more accountable and responsible for revenue generation, those organizations are outperforming other companies where marketing doesn’t have that accountability and responsibility. Very telling, very telling.
That said, 75% share their companies do not achieve revenue goals without increased revenue accountability from the marketing department. There’s a perfect contrast there, I believe. When marketing has that accountability and responsibility you hit your goals or you exceed your goals. When you don’t have that accountability or responsibility, there’s a greater chance that your organization is going to miss a sales goal. The number one ranked success factor for achieving revenue goals is an effective marketing and sales partnership. The line of demarcation, as I called it, where you have this big chasm or a very clear delineation between marketing and sales, that’s old school thinking and it won’t work anymore. If you have that very hard line between the organizations, that will gradually decrease and negatively impact your overall revenue performance.
Here’s some more data and then I’m going to move into some other story points here, but less than 8% of sales management and only 12% of sales reps believe that the marketing organizations effectively use revenue performance metrics. Paul, that gets back to what you were talking about on vanity metrics. When I have single digits of sales management that’s talking about they don’t have the confidence in their organization or their marketing team using the right data to measure impact to revenue, there’s a big problem there. Huge opportunity for improvement where marketers need to learn how to measure the right data, capture the right data and tell the story. Be able to interpret that data for meaningful adaptation and execution in the future.
I talked about achieving or exceeding revenue goals. Over 60% of companies see improved sales performance with revenue accountability and here’s another telling factor that can help drive that sales and marketing alignment piece and that’s 62.5% of sales managers believe sales performance improve because of marketing’s increased revenue responsibility. Several data points that we hit on, getting marketing to focus more on revenue generation. Not just top-of-funnel lead gen or marketing qualified leads or sending leads. You know, just getting this activity or sending names over to sales to follow up on. You start looking at or executing against full funnel marketing and you’re getting greater alignment, greater visibility within the organization that’s positive, greater strategic impact and powerful information that can help steer the organization in the future.
The bottom line is greater revenue responsibility leads to stronger revenue results and as far as I know, that’s what we all want. As a marketer myself, that’s what I want from my clients. That’s what the sales reps want. I know a lot of marketers that get a little queasy when they hear that and there’s a number of reasons why, but when you take on that responsibility and accountability, you learn how to measure that performance. All kinds of goodness results from that. I think it’s absolutely worth taking on the challenge.
Let’s go into some additional data points here. Nearly 80% of marketing management responded that they are under increasing revenue responsibility, which is good. I believe that’s good. 66% of sales management respondents recognized that their marketing organizations are under increasing revenue responsibility, which is good, because again that shows that shared goal, that shared responsibility end of sales management recognizes that the marketing team, the marketing colleagues have those same goals. You’re working towards the same thing. If you’re just focused on activity-based metrics in the marketing organization and then sales is focused on revenue, you’re not working towards the same thing. It’s really important to have those shared goals. You can still have metrics and goals within marketing organizations that can show overall performance on well some of the channels and the tactics are working, but remember when you’re looking at overall revenue, many of those metrics don’t matter outside of the marketing department potentially.
Want to move on to the sales performance metrics and how some of those were ranked by both sales and marketing, together everybody collectively in their survey. Interestingly enough – just to highlight what I mentioned a few minutes ago or just a few seconds ago – talking about MQLs. That is a very common metric. I would say that most marketing organizations, most B2B marketing organizations, all size companies, they have some sort of metric that they need to hit for MQLs. Whatever their definition is for an MQL. Some of it is just as simple as a form submission, other may have some more criteria on engagement behavior tied to that, but less than 17% of sales managers view MQLs as an important metric. I think that’s telling right there. Definitely we need to be able to provide high quality leads to our sales organization, but if we focus on that as the main metric we’re not engaging or working closely with sales to help drive revenue.
The other piece to that is 41% of sales managers rate the number of opportunities as the most important metric and the top performing or the best performing organizations that have opportunities as the number one metric, those are the organizations that have the best overall revenue achievement or exceeding revenue goals. Survey ranked marketing performance metrics – number one, number of opportunities, number two, revenue by source. Number three, number of sales accepted leads. Now think about those top three. You’re identifying where leads come from. Not all of the touch points that gets it to an opportunity or a sale stage, but you’re starting to look at the opportunity value of these leads. Getting – number four – marketing qualified leads conversion. Not the leads of MQLs themselves, but the conversion. New customer acquisition costs. Time to acquire new customers, number of touches to acquisition and budget allocated by customer type.
All of those eight points, those can be measured and are incredibly important, strategically important to managing your revenue performance. That gets into the heart of marketing performance management right there. Those eight points and the stories – the strategic, revenue-focused story – that’s important to the entire organization, that your CEO loves and your CFO loves. Those are the data points that should be top-of-mind, top-of-list, the first point that you want to look at in your dashboard when you start in the morning.
Very interesting information there. Now being able to execute against those goals, huge gaps. There’s definitely a huge room for improvement straight across the board. We had some measurements on how if you ranked the goal at this point, how well are you executing against that? There was a significant gap between the top five. I’m not going to get into the numbers on those I’d want to share. Just have you download that from our survey, but it just shows that there’s a challenge. This stuff is hard, right? It’s not easy. It’s hard, but it is worth working towards.
Before we close out, how well are marketing organizations using performance metrics? Only 11.3 of all of the respondents, or 11.3% said that they are very effectively using metrics. 57% say somewhat effectively. Lot of room for improvement and there is an approach to working towards effective marketing performance management here. The goal of our survey – and we have much more data in here that you would find valuable – but the goal of this survey is to help you think how can you drive your marketing organization or how can you help support your marketing organization or lead them to be more effective in revenue generation and pipeline performance? Working with your sales organization, improved customer engagement and achieving or exceeding sales goals.
I would encourage you to come to the Heinz Marketing website to download the report. Again, my name is Brian Hansford with Heinz Marketing. I am Vice President of client services and our marketing technology practice here. I would be happy to talk with anybody about this. You can reach me at email@example.com and you can download the report from the resources section at heinzmarketing.com. I really appreciate the opportunity to share some of this data with you and I hope you found that helpful. If you want to talk about this any further just give me a shout. Happy to share ideas and talk through some situations with you.
Paul: That’s it. You’ve been riding along on the Sales Pipeline.
The post Sales Pipeline Radio #74: Q&A w/Brian Hansford @remarkmarketing appeared first on Heinz Marketing.