In most organizations, sales and marketing are constantly battling over who owns the number. Marketing tends to argue that sales is solely responsible for achieving growth targets. Meanwhile sales argues that marketing is equally as responsible for the number. In order to achieve a 360-degree view of this decades-old debate, we interviewed Lauren Goldstein, Chief Revenue Officer at ANNUITAS for a sales perspective and Steve Hardy, Chief Marketing Officer at Secureworks for a marketing perspective to answer the question: who owns the number?
Traditionally we’ve seen marketing owning the demand generation number, sales owning the revenue number, and marketing and sales operations owning the retention number. But none of those numbers are tied together in a singular plane. So, the question is – who owns the singular number?
Steve: An organization of any size needs a singular goal: revenue. And that goal can be broken into smaller goals that are aligned between functions, but having different numbers, accountability, and ownership prevents real progress. Yes, how you get to that singular number may be different based on your role or function, but everything you do should still drive towards the same goal. Historically, I’ve seen that marketing is given a marketing-sourced revenue number and that immediately sets up a fight between marketing and sales.
Lauren: Yes. If marketing-sourced is different from total revenue in any way, there will be infighting. Best-in-class companies have one number jointly owned by the CMO and CRO. That doesn’t mean there won’t be infighting, but for these companies, if there’s finger-pointing, it’s happening privately between the CMO and the CRO – not in front of the CEO or the board.
So, if you have a singular number, what is it and how is it measured?
Steve: Ultimately, the number for me is net contract value increase or net revenue increase. The calculation of net new minus attrition is the singular culmination of our success.
I have a dashboard with key metrics that I’m constantly sharing with my leadership team. That dashboard covers the entire spectrum It has lead-to-opportunity conversion rates, closed-won deals, and pipeline velocity. I think it’s important to define metrics that the entire organization can understand and then ladder-up or ladder-down to understand the activities that relate to those metrics.
Lauren: Absolutely. Our entire organization is aligned around key metrics including top-of-funnel engagement and bottom-of-funnel opportunity creation, which is a combination of net-new clients and current customer expansions, as well as closed-won deals. I also think the notion of “lift” is really important. Lift is that variable that can show the impact of changes you’ve made in marketing. It’s a key indicator of success, especially in the early stages of change.
What are some of the specific KPIs that ladder-up to the key number that each of you is hyper-focused on?
Lauren: The hyper-focused metrics are the magic. Take for example, the Ideal Customer Profile. If marketing is targeting the ICP through hyper-focused metrics that serve to measure quality instead of quantity, then it’s likely that the deals passed to sales will become bigger opportunities with faster velocity.
Steve: Narrowing in on what we’re measuring and who we’re targeting to create a more disciplined set of segmentation helps us create products, go-to-market strategies, and marketing programs with a specific type of customer in mind. Historically, marketing has been very focused on acquisition metrics like marketing influenced leads or marketing qualified leads. I’m trying to shift away from that pattern and look at the entire pipeline in terms of generation and acceleration. Sales is ultimately measured on closing deals – but what is marketing doing to fill and accelerate the pipeline?
Are there nuances between net-new and cross-sell/up-sell numbers?
Steve: Marketing has obsessed over acquisition. But acquisition costs 10x more than retention. Good marketers need to think about how you target customers across the spectrum to drive retention, cross-sell and up-sell.
From a technology perspective we’re in an interesting time to address this question. B2B marketers haven’t nailed omni-channel customer experience management. There are multiple buyers and decision makers in different stages of buying or product usage. At any given time, we could be launching a new campaign while someone from the same company is calling customer service, and we’re not connecting those dots. There’s not a seamless customer experience.
Lauren: The technology exists to connect those dots, though. The problem is that companies have been using the technology as a magic band-aid when really, the undertaking by a marketing and sales organization to develop and implement a buyer-driven strategy is the challenge and the opportunity.
A true omni-channel experience with aligned sales processes and workstreams are not the norm – but they should be. There should be just as much emphasis on cross-sell and up-sell opportunities as there is on net-new acquisition. As a CRO, I spend an equal 50/50 on both areas because that’s good for our business. I’ve seen some of our clients separate it out to a 70/30 split with an emphasis on net-new acquisition. It depends on your business, but unless 100% of your revenue comes from net-new, you absolutely should not be focused solely on that metric.
What role does marketing play in achieving the singular number?
Steve:Marketing is omnipresent throughout the buying journey, but sales is at the forefront in the purchase journey. They have to work together. If marketing is focused on pulling one lever, like lead acquisition, with no accountability or visibility into what goes out the door, it doesn’t work. Marketing should be leading with a purpose.
Lauren: I’m curious what you think about the brand, Steve. In today’s modern organizations demand is building your brand in a way that is more curated and one-on-one instead of pushing a blanket “big idea”. The curated idea is what’s right for me as a buyer and that’s what I see successful marketing organizations focusing on.
Steve: Look, I don’t care if my mother knows who my company is or what we sell because she’s not looking for an enterprise-class SaaS security product. Our brand doesn’t matter to her. But I do care that I’m top of mind for our target audience, so I measure brand awareness because that has an impact on how I meet my number. Brand still has a place and still drives the same criteria it always did of “am I being considered” and “do I have a strong preference among buyers?” If no one knows about me I can’t drive demand.
Lauren: Totally. And there is a new set of metrics emerging that can measure the real impact of demand. These metrics measure engagement, impact, and elasticity instead of clicks, views, sends, etc.
What is your view on the role of operations teams to support your goals? And is it sales operations, marketing operations, or revenue operations?
Steve: I think the idea of revenue operations is necessary, but the question of where that role sits is interesting. Good sales and marketing ops teams work together already, and so revenue operations should be a part of that because creating artificial separation doesn’t make sense.
Lauren: I think there’s a big push towards including revenue ops as a function, but I don’t know if there’s an agreed view on if that function reports into sales or marketing. There’s some dotted-line reporting, but in non-tech industries the operations functions are separate and siloed and that’s really difficult. There will be really expensive projects going on that look at interactions with operations with no coordination or recognition of the role marketing plays in feeding that sales engine. It’s pretty reckless. In more progressive organizations the revenue ops function is a holistic group with experts, but it isn’t siloed.
But regardless of where the role sits, I think there’s a real benefit when operations functions are aligned to the revenue goal. Just like the CMO and CRO have the same number and KPIs they’re aligned towards – when everyone is marching in the same direction there’s no question about what success looks like.
Steve: The siloed nature of these roles is like a dam that’s going to break. When you really tease apart the functions you see that to separate them makes no sense. Our buyers don’t think of us as “the sales team, the sales ops team, the marketing automation platform, etc.” they either want to do business with us or not.
Lauren: Right, so it’s about connecting the brand and the buyer and the experience the buyer has.
Do you have any “secret weapons” that help you achieve your primary goal?
Lauren: My secret weapon is customer experience. I’m obsessed with it. Thinking about how to operationalize the customer experience and integrate it into the organization creates success. It’s easier said than done, but it’s necessary.
Steve: Agreed. It’s easier to do for smaller start-up style companies, but it’s hard as an older, more established company. Nevertheless, it’s critical.
My secret weapons are data and people. Bring data to the table and that will empower any conversation. It’s also so important to work hard to build relationships and partnerships with people. Too often, sales and marketing have different agendas, goals, or purposes, so leadership has to be aligned on the collective mission and purpose.
Lauren: At the end of the day it’s about being in-tune with the customer’s needs.
Steve: Happy customers equals good business.
Help Us Serve You Better
Let us know a little about yourself to gain access to more resources relevant to your specific role and needs
To Continue Reading...
The Key to Operationalizing Go-to-Market Around Customer Journey: Conversation Track Architecture
Making the shift to a strategic demand approach and going to market outside-in is a key step towards...