Today I had the opportunity to moderate a Webinar with Bill Binch, sales VP of Marketo, and Barry Trailer, partner at CSO Insights, on the subject of revenue success. Bill is a hands-on sales manager who has 13 salespeople reporting to him. He’s very tech savvy, success driven, and customer focused. His full title is VP of sales and customer success, which suggests that Marketo is highly customer focused yet revenue driven.
Barry, on the other hand, is looking at revenue generation from two perspectives: 1) based on his extensive research and 2) based on his personal insight into sales mastery. Here is a five-minute interview with Barry in which he shares the keys to sales mastery:
"The sales machine on its own is not sufficient to drive revenue growth"
In other words, sales leaders need to look beyond CRM and the sales process and ask themselves, “How is marketing generating opportunities for sales?” What struck me as surprising were the high investments Bill’s company makes in marketing. The ratio of sales investment to marketing investment at Marketo is 1:1, while the average ratio, according to Sirius Decisions Research, is 3:1. Does that mean that Marketo is overspending on marketing? It depends. We can only answer the question by looking at the company’s results. According to Bill, 60 percent of Marketo’s sales pipeline is exclusively generated by marketing. That’s about three times higher than average. But the true measure is revenue growth. Marketo is a private company; however, according to trusted industry insiders, Marketo’s sales are growing close to 100 percent year over year. My conclusion: Marketing done well pays great dividends.
What I found most unusual is that Bill, a results-driven sales hunter, is convinced that marketing can be held accountable for revenue generation. It shows that when sales and marketing are aligned within a company, salespeople begin to see marketing as an ally that is helping them capture sales-ready leads, not an adversary. In such companies as Marketo, Ariba, Sybase, or salesforce.com, sales and marketing are aligned. That’s not the case in most companies.
The signs of misalignment:
Salespeople say to marketing:
Your leads suck! Marketing is a waste of money!
Marketing says to salespeople:
You are too lazy to call the prospects we found for you! All salespeople do is complain and entertain.
Great marketing leads to a well run sales organization
Of the many takeaways Barry and Bill shared, there are three that stand out:
- Companies that use lead generation management (meaning marketing automation) generate higher revenue growth
- Companies that use lead scoring can operate a more efficient sales force
- Companies that use lead nurturing run a more productive sales organization
One of Barry’s slides divided companies according to their sales and marketing process. What’s interesting is that only a dynamic process governed by greater flexibility and more insightful metrics allows a company to rise to the level of a trusted partner.
The research numbers, based on a survey of more than 3,000 sales leaders, are highly compelling: Level-3 companies have more reps making quota, they win more deals, and their sales force has lower turnover. What’s the catch?
Barry said that "it’s not easy" to become a level-3 sales organization. My POV: As sales leaders, we have to make a choice between the pain of mediocrity, and the pain of mastery. It would be easy to say, no pain, no gain, but the reality is this: if we choose mediocrity, we turn into a sitting duck. If we choose mastery, we’ll be leading the pack.
The disturbing news: We prioritize customer acquisition and neglect customer nurturing
Take a moment to study these low scores:
- a) Improving customer loyalty (24.7%)
- b) Enhancing the customer experience (21.1%)
- c) Increasing customer renewals (17%)
What are we thinking? What CSO Insights’s research tells me is that companies are saying, "I want more customers (91.2%), but I don’t want to create a customer-centric strategy (13%)." This sounds like the reasoning of a five-year old who wants to have his cake and eat it, too. All I want to say is, "Grow up!"
Bill’s answer was more reassuring. Most of his customers use the software to nurture existing customers. The result: greater revenue growth from existing customers and greater customer satisfaction at a lower cost of sales.
As long as Barry continues to promote sales mastery and Bill continues to promote marketing mastery, we’ve a shot at bringing sanity and growth back to America’s economy.