Why Sales and Marketing Don’t Get Along

March 24, 2011

Talk to marketing mangers and sales managers about their biggest complaint and you will likely hear “They don’t follow up on leads!” from the marketing guy and “Their leads suck!” from the sales guy. No news there. But why is that this fight on lead quality continues?

According to a recent chart published by MarketingSherpa (below), 80% of marketers don’t spend time qualifying leads before sending them to sales.

B2B Lead Qualification Requirements

What information is required before leads are passed to sales?

It is interesting that back in 2009, MarketingSherpa had published a chart showing the key challenges marketers faced and “generating high quality leads” was the top one. Sales keeps insisting on receiving better leads, marketing knows that is an issue, but still they are not delivering. In their “CMO Perspectives on B2B Marketing Automation” this challenge for high quality leads is shown as having increased from 69% in 2009 to 76% in 2010.

A Gartner Group presentation on allocation of Marketing Budgets for 2011 showed that the top three marketing priorites for this year are:

  • Acquire new customers
  • Improve customer retention
  • Support sales including lead generation programs

If the budget is there, then maybe more companies will be able to finally put some technology in place to help with lead quality, more specifically marketing automation with the goal of improving lead quality. Because the solution to the disconnect facing marketing and sales today is to fix the “lead problem”, once leads are better qualified the two organizations can be friends again.

 


How Everybody Wins with HubSpot’s Funding

March 10, 2011

As everyone in the marketing industry surely knows by now, HubSpot raised $32 million in additional funding. This means that is time to update my previous charts on marketing automation funding (see below) and the funding timeline, because HubSpot just surpassed Marketo as the highest funded marketing software vendor to date. (Note: yes, I wouldn’t necessarily say HubSpot is a ‘marketing automation’ vendor per se, but they are moving towards that end).

Click to enlarge

With the new round of financing, HubSpot now leads the pack in terms of VC funding and takes the total amount raised to date by key marketing players to over $220 million.

Click to enlarge

Updated above is the timeline of funding for the key players in the marketing automation space (you may argue HubSpot is not a marketing automation vendor, this is subject for another post).

Everyone Wins

But it also means something else. The money flowing to companies like HubSpot is impressive, and the results of the investment will not only benefit them but also the whole marketing automation and marketing software industry in general. Is almost like a virtuous cycle, where money goes to marketing software vendors, who use it to build better products and educate the market, which then learns about the benefits of such solutions, purchase those solutions, and publicize it themselves and pay those vendors for services.

Industry Impact

Should established marketing automation players be worried about HubSpot’s sudden infusion of capital? After all, now that they have the deep pockets to invest in improving their product, maybe their solution will start looking more like what marketing automation vendors have been selling for some time now. For Eloqua, at least, they say there’s no need to worry since HubSpot is serving a very different market.

Market Segmentation

And here is worth pausing for a moment. We sometimes tend to bundle all of the vendors into one big basket, because a search for marketing software solutions will show more results than you would care to browse and the sales literature of most of them will make you think they all do very similar things. Nothing could be further from the truth, since after taking a few of those solutions out for a spin you will discover there’s much difference under the hood… but that is a topic for another post, since it can take some time to untangle the value propositions and real benefit all the marketing software vendors make.

So HubSpot’s recent capital infusion should be treated as good news by all marketing vendors. It does seem the whole industry is due for a shake-down but until then, the awareness and market education will benefit everyone.


Marketing Automation Catching On Fire

February 16, 2011

According to the recent report by Marketing Sherpa, “CMO Perspectives on B2B Marketing Automation” (offered for FREE by Marketo until March 1st), “the majority of CMOs have either implemented, are in the process of implementation, or are at least considering implementation of marketing automation software“.

34%: Our marketing automation software is partially implemented

19%: Our marketing automation software is fully implemented

17%: We have not began implementation but plan to

30%: We have not began implementation and don’t plan to

This is probably good news for the vendors, which are competing in an increasingly crowded market. Some have even suggested that marketing automation market is floundering, but it is such a new market and offering that is innevitable to have doubts, especially with these many vendors in the space. With time, a shake out is likely (in fact, the recent acquisition of Unica and Aprimo may point to consolidation) and the evolution of solutions will ensure marketing automation has a place in most marketing organizations, much like CRM is now standard for sales departments.

A Marketing Automation Timeline

So let’s take a look at the marketing automation companies in play today (mostly US based in this case) and when they were founded. Interesting to note that the majority of the players only came to existence not even 5 years ago. This nascent industry still has lots of growth to do.

Timeline of Marketing Automation Vendors

You may spot some companies that were not considered to be “marketing automation” players just a year or so ago. That points to the evolving nature of the market, and the key functions of lead nurturing, scoring, and automated triggers becoming part of email marketing and other marketing solutions. Marketing Automation Software Guide published a B2B Marketing Automation market map that shows a few other players I ignored for the timeline above, like SAP and Oracle because although they do have marketing automation capabilities it is not their core business (and I don’t agree with tagging Salesforce.com as a marketing automation solution).

Investment in Marketing Automation

Another interesting factor to consider in the marketing automation industry and why it seems to be catching on fire is the money that is flowing towards some of the key players. Just a few marketing automation companies have already raised over $170 million dollars combined. Whether they will all be around a couple years from now is still to be seen, but it does make for a highly competitive environment. With cash to burn, these companies are focusing on growing the customer base first, with hopes that revenue will follow.

Total invested in Marketing Automation vendors

The marketing automation infographic above (click to enlarge) shows the top players in the MA space that have raised over $1 million dollars. Also interesting to note that if you break down the fundraising of each of the above vendors into a timeline (like I did below), most of the investment has been made in the past couple years.

Marketing automation funding timeline

You may have to click to enlarge the funding timeline infographic above.

Note: I used publicly available data and wasn’t able to find Eloqua’s Series A, so I deducted based on valuation of their second round.

The Marketing Automation Market

The Marketing Automation market is at an interesting stage. Companies are fighting for customers, trying to educate the market, and we may be seeing the beginnings of consolidation. Based on the investment figures above it seems is catching on fire, but at the same time there’s fierce rivalry and still a lot of room to improve… what will happen? I don’t know but it promises to be really interesting!

What do you think ?

P.S. Let me know if I missed any MA company in the graphics above or if I got incorrect data. I’d be happy to fix the infographics for benefit of everyone.


Marketing Automation Monday is Here!

December 8, 2010

On Monday I attended a Marketing Automation Monday event, put together by the Marketing Automation Association, a newly formed group of marketing professionals that discusses all things related to marketing automation and best practices. It was really fun and if you are interested in learning how other marketers are tackling their marketing, CRM, and even sales challenges this is the place to go.

Some of the issues discussed were:

  • Who manages and who owns the CRM system in your organization?
  • How do you setup your scoring system for inbound leads?
  • What is the hand-off process with sales?
  • How do you get a feedback loop established with sales so that you can get better at scoring your leads?
  • Buyer personas and content creation

The interaction was great and the fact that we had people from both SMB and large companies was great, we could hear both sides of the story and how different size companies work with marketing automation.

One of the interesting points raised during the discussion was about content creation. Sure, you can setup all the triggers, scores and processes in your MA system but nothing will matter if you don’t have the content to support it. Most companies start off with one track for their automation and nurturing programs and expand with time. Ideally, you want to match your content with the buyer persona and the nurturing/sales stage. I.E. one type of content is sent to the IT Manager who is evaluating vendors while another is sent to the Programmer who is trying to learn more about your product.

A recent chart from MarketingSherpa touches a bit upon the content creation challenge for email marketing (see below). In it they show how automatically sending email based on triggers is more effective than allowing subscribers to specify email preferences. Interesting also that according to their research the segmentation of email campaigns based on behavior (which is a big part of a Marketing Automation program) is also less effective than the sending of emails based on triggers.

Three dimensions of relevancy tactics

As always, you have to take all of this with a grain of salt. An important point raised during the Marketing Automation Monday meeting was that you should really analyze your company’s history and understand based on your historical data (i.e. which leads turned into closed deals, where did they come from, what programs generated more closed deals, etc.) what is working best for you and what patterns can you see in your history that will help you fine tune your automation programs.

Interested in learning more about Marketing Automation and how to take advantage of it? Join the LinkedIn group and attend the next event!


Marketing By Objectives

November 29, 2010

Objective-Action-Budget

In a recent article for the CMO Council’s Newsletter, Nicolas Watkis argues “Marketers won’t succeed if they don’t have objectives”. Right on, my friend!

As we have all heard before, marketers are now more than in any other time being measured and challenged to produce measurable results. Mr. Watkis then states “the most important activities for marketers are the establishment of marketing objectives, a plan for their achievement, a budget to support the plan, and the management of assets and resources to achieve the objectives”.

OK, I think we can all agree this makes sense, but then how do you go about coming up with a plan? His article argues that most marketers start with the budget and foolishly take that for a marketing plan while the right approach is actually quite different:

1. Set measurable objectives, both financial and marketing. The financial objectives are revenue, profits, return on assets (how much sales will the campaign generate? Is a valid question to answer in your objective) and although he doesn’t describe what the “marketing objectives” are, I would focus on lead generation numbers (how many qualified leads, for example) although other metrics such as “number of blog posts” or “twitter messages” could be valid objectives for social media campaigns.

2. List actions to be take for each objective, with completion dates, people responsible for each action and also think in terms of alternative actions (what to do in case the action is not successful). This last bit is important for factors outside your influence, maybe a contract that depends on another company has to be signed for the joint marketing campaign to start, or what to do if certain assumptions you’ve made when putting together the plan fail to materialize (i.e. what to do if mommy bloggers don’t pick up our story or offer right away as we hope they will do).

3. Profit and loss projection with a detailed marketing budget showing the allocation of resources. So here it is, the marketing budget, the final component of the marketing plan.

The methodology of OBJECTIVE -> ACTION -> BUDGET is logic, but why is it that so many marketers keep insisting on coming up with the budget before actually putting a plan in place? The “let’s copy last year’s budget” mentality is prevalent in many organizations because is the easy way out of a not so glamorous function. Maybe now is time for some change. So write “objective -> action -> budget”  down on paper, in big letters and stick it to your corkboard or use a post-it and glue it to your computer monitor. That’s what I just did 🙂


B2B Marketers Hold Off on Killing Traditional Media

October 22, 2010

And so from the looks of it, according to the latest chart from MarketingSherpa, traditional marketing venues such as trade shows and advertising are still in play today and will be for the next year. Their latest study points out that “The majority of B2B organizations are increasing marketing budgets for inbound marketing tactics, including social media, virtual events and webinars, SEO and PPC”.

But, more interesting is that the majority of B2B Marketers are not planning on changing their marketing budget allocation for traditional marketing tactics. Also interesting to note that telemarketing as a budget item will also remain a key part of the budget, which shows outbound lead generation is still a strong component of most marketing plans.


Flip the Funnel Book Review

October 13, 2010

At the San Francisco Marketing Book Club meeting last week we discussed “Flip the Funnel: How to use existing customers to gain new ones“, by Joseph Jaffe. 

What’s the verdict?  Buy the book. OK, now the explanations and caveats.

First, the book talks about the essential function of customer service and how to leverage it with today’s current technologies, including (of course) social media. If you haven’t read much about customer service or if marketing isn’t your background, then the book will be a good starting point. For those that have some experience and background on the topic of excellence in customer service and have read one of the many classic books out there, then a lot of it will be just a review of what has already been said.

My biggest disappointed was that the author used mostly well known examples to illustrate his points. JetBlue, Domino’s, United Airlines, Zappos, and others are cases that we marketers already know. I would have liked to see other companies that he has worked with and are not so obvious and how they implemented his recommendations or how they have failed to recognize the importance of “flipping the funnel”. But then, maybe I’m not the target market for this book.

The other thing to be aware is that Mr. Jaffe is a bit verbose. If you have listened to his podcasts or seen his videos, then you know what I’m talking about. I felt like skipping a few pages just so I could get right to the point. Others may be ok with his style, but it just made it much harder for me to make progress. You should read an excerpt or check it out at the local bookstore to see if you like how he writes before buying the book.

But don’t be fooled, there are some really good ideas in the book:

Where is the money going?

Early in the book he makes the case that we’re spending money on the wrong side of the funnel. “Shouldn’t we be spending money against qualified prospective buyers versus shots in the dark at bagging a random stranger?”. He continues saying “The marketing funnel produces customers – but then does nothing with them.”

How right he is! Why is it we spend all that money and effort into getting people interested just to forget about them once we get the purchase order? There’s gold to be mined in existing customers and the book treats this as the new mantra for marketing. In Jaffe’s words “Keeping, cultivating, and nurturing existing customers and establishing unbreakable bonds with them”.

Segment and Treat Customers Differently

Although the methodology varies based on your industry and whether you are a B2B or B2C company, the big picture is clear. “The more opportunities we give our customers to engage us (as opposed to us engaging them), the more likely they’ll be able to do just that”, and I completely agree. According to Jaffe, we should segment customers into “walkers”, “talkers”, and “hybrid”, and deploy distinct approaches for each one. His new “flipped funnel” approach to doing that is called A.D.I.A (Acknowledgement, Dialogue, Incentivization, and Activation).

The Customer Experience

The whole point of the “new” flipped funnel approach is to create this unique “customer experience”, which means giving customers ways in which they can interact with the brand, and we can interact back with them. Sure, this is not new, but he suggests that “companies need to have an intensive, omnipresent approach to dealing with their customers”. Does this sound like your company? I know, everyone talks about how important the customer is, etc but very few companies really put the necessary resources behind that. The payback, he argues, is that “customers will pay a premium for higher perceived value”, and such value is likely to be how customers are treated. Customer service becomes your product, or better yet, the differentiator between your product and your competitor’s.

Social Media Still Not Treated Seriously

Where I think the book falls short is on the implementation side. It talks about companies having to deploy capabilities across every single customer touchpoint, connecting the dots between the physical and virtual world and giving customer service the strategic value it deserves, but there’s not much in terms of HOW companies are doing that. Although, if the research from MS&L mentioned in the book is correct (one third of companies are not incorporating social media in marketing efforts, and of 63% that were, a full two-thirds had not made changes to products or marketing based on customer feedback), then the problem is actually there aren’t many good examples to follow. Are we entering a new world, travelling a path very few have survived? We’ll see.

 

In sum, if you’ve already read a few books on the subject, you’re not going to gain anything new but for the novice or uninitiated this book may be just what you need to get your company on the right track to flipping the funnel and gaining new customers.


What Type of Marketer Are You?

May 18, 2010

After interviewing many marketers for different positions at my company and meeting marketing professionals regularly at events, I came to the conclusion that there are two types of marketers:

  • Passionate Marketers
  • Job Marketers

The first group is comprised of those that, as the name suggests, have a real passion for marketing. They read about marketing, they talk about marketing outside work, they go to events and try to educate themselves. They often participate in discussion forums and might even have a blog. Everyone in the family knows they do marketing, friends ask them for some advice and they often times talk to telemarketers trying to sell newspaper subscriptions at eight o’ clock at night because they think it’s fun. Telemarketers often regret the call because the passionate marketer keeps analyzing their sales pitch instead of buying something.

Job Marketers are, unfortunately, the majority out there. I’m not sure whether it starts in school, their first full time paying job or it’s just the way they are. This bunch sees marketing only as a job. If they were offered more money to create TPS reports they would switch to doing it in a heartbeat. Outside work they don’t want to check out a blogabout the newest lead nurturing technology, or fly out to attend a marketing conference. They see these activities as “work” and as such, shouldn’t be performed after 5:29pm.

Funny thing is, Passionate Marketers are not necessarily better at marketing than Job Marketers. Both can be very effective at what they do.However, from what I’ve seen, passion makes some rise quicker through the ranks and get accolades, while the simply “employed”stay for years at the same company and position because, hey, that’s just a job.

When hiring someone for a marketing position, it’s important to know these different types exist. Hiring marketing people is tough enough as it is, one has to understand the type of person they need for each specific position. If you want a marketing assistant that will be still with you 30 years from now, a Job Marketer may be just what you need. Who do I want to work with? Passionate Marketers. From interns to the VP. Not that the other group wouldn’t be fun (after all this is a characteristic about how they feel towards marketing in their careers, not their personalities), but when you have people who are passionate about what they do, it tends to rub off and the whole team benefits. We need more people who are passionate about what they do.

What type of marketer are you?


Why Social Media Needs to Die

April 14, 2010

OK, this may be a bit harsh, but all the talk about social media versus traditional marketing is driving me crazy. Sure, gurus, experts, and agencies alike want to tout they are the latest and greatest when it comes to the new marketing tools on the block and so it makes sense for them to brand themselves as “social media agencies” or “social media experts”. But what about the “traditional marketing” as they call it? It’s all the same thing, but with different adjectives.

Trends and the Obvious

Isn’t it funny how some numbers on a screen, a nice chart and statistically sounding papers can make you believe in anything at all? I found it amusing when reading about two new surveys about social media adoption were released that some of the highlights were:

  • Companies are spending more on social media and plan on increasing social media budget
  • Companies are switching more money from traditional marketing to digital marketing
  • Small and large companies alike are turning to social media
  • Social media is becoming a viable took in the marketing mix

Let’s say someone just came out with this new thing called the Television. And not only that, after a few years it is now in color and families are gathering around it for their favorite shows. Wow, you may say, let’s jump into that and get our own commercial there! Social media, like any other tool (or vehicle of communication to be exact) is the same thing. The new shinny object is obviously attracting people to it and the more you try it out, the better you’ll be at mastering the right message.

Another obvious trend being reported talks about how companies are integrating social media into their marketing efforts (a couple of reports discussed here and some discussion here too). Really?! Wow, these marketers must be really smart to be integrating social media… but how about the ones that say they haven’t integrated social media into their marketing mix? Are they losers? Maybe they are still trying out the waters, creating a twitter account to listen to the market before jumping right in. This “integration” talk is another useless discussion because it really doesn’t help you do anything better today. So what if most marketers are not integrating social media into their strategy? How can this data help you? Don’t tell me that you need that to “sell social media” internally into your organization because that’s a lame excuse. Agencies might like the data because it tells them how easy or how hard it will be to sell their new “social media” strategy service.

The Academic Debate No One Cares

I think I had enough of the whole social media versus marketing discussion when I listened to the Six Pixels of Separation Podcast talking about digital marketing agencies vs. traditional marketing agencies vs. social media agencies.

I wholeheartedly agree when Mitch Joel saysLet’s not make it bigger than it is.”

The discussion of where social media fits, and whether is part of marketing or not is purely academic and has no practical purpose.

For those not in the marketing field, let me clarify this with the simple diagram below:

Marketing components

All of those items are under ‘marketing’. Yes, even ‘sales’ is part of marketing, that’s how we’re taught in school and how it is in the real world. In fact, books such as “Marketing Management” and “Principles of Marketing” by Philip Kotler widely used at marketing courses talk about the good and old “Four P Components” of the Marketing Mix and have as examples the following:

  • Product: product variety, quality, design, features, brand name, packaging, etc.
  • Price: list price, discounts, etc.
  • Promotion: sales promotion, advertising, sales force, public relations, etc.
  • Place: channels, coverage, assortments, locations, etc.

No, they don’t mention “webinars” or “email marketing” or “facebook” but you get the idea. Those are all tools of your marketing bag.

And Now For Something Completely Different

While many are using the term social media in everything they do, I propose something different:  just kill it from your vocabulary. You can argue about “push versus pull”, about how “inbound marketing” is the new thing and all that great stuff but keep in mind that it is all part of your marketing strategy and execution.

Talk about “integration”, about “traditional vs. new”, or “digital vs. virtual” doesn’t get you anywhere.

I know I’m not alone in trying to end the social media vs. marketing dichotomy and know that a lot of you marketers out there are getting tired of this whole thing, so let’s just try something completely different and stop talking about social media as if it were completely separate from what we do on a daily basis. It’s a tool, so let’s refer to it as one.


The Dirty Side of Marketing

February 19, 2010

Marketing is Dirty

Recent grads and people from other fields usually have the wrong idea about marketing. After multiple years of interviewing people for marketing positions, working with marketing interns, and discussing marketing with non-marketers it seems that the non-practitioners form their ideas about marketing from:

  • Having watched Mad Men and thinking that  marketing is advertising and it involves coming up with a crazy creative, tough negotiation, and a lot of romance
  • Reading Seth Godin books and feeling like it’s about coming up with purple cows, telling stories, and something about forming a big tribe
  • Watching  the mistakes that SouthwestUAL, Baja Fresh and TGI Fridays, and others have made and then thinking they would  never do that because they are smarter than those big dumb brands
  • Using Twitter and Face book on a daily basis and thinking that just because they have 100+ followers/friends and have top scores on MafiaWars/Farmville/InsertYourAnnoyingAppHere they are experts in social media and think is the only useful marketing vehicle
  • Surfing the web for hours and wondering why don’t all those companies simply re-design their websites

I could go on, but you get the idea.

And then what happens? They get a job.  And with the job comes meetings. And in one of those meetings the  Sales Manager starts talking about quality of leads coming from Marketing, the CFO asks about  Return On Investment, and the CEO  discusses how marketing goals need to be aligned to the overall strategy and asks for comparison with what competitors are doing. Then some negotiation about budget goes on and when the marketing staff regroups there are a lot of spreadsheets being thrown together for metrics.

And those metrics take time. Metrics for email results (clickthroughs, open rates, deliverability, etc.), metrics for the website (visitors, pageviews, clickpaths, conversions, etc.) and for the pay-per-click campaigns (impressions, daily budgets, word rankings, conversions, etc.), and the list goes on. At the end of the day our brave new marketer starts wondering what happened to all the nice marketing creativity, brainstorming sessions, and cool toys he saw on movies and expected to be part of.

The harsh reality is that marketing, let me rephrase that, effective marketing is a dirty job. Sure there is creativity, there is coming up with new ads, a new website, brand discussions and user personas, but it is all backed by serious analytics. Results are what marketers are after. Everything else is a means to that end.

This bucket of cold water thrown at the newbies leave many upset. Our schools are partly to blame because very little practical marketing is taught (recent graduates know the four P’s but have no idea of how exactly to use them and what tools are available). Inevitably some will get disillusioned and leave the field of marketing. Others ‘get it’ and take the analytics side of marketing with gusto and become excellent at slicing data and putting it to work.

With time all that number crunching and metrics become second nature and while they are still important, the “fun” aspects of creative brainstorming, marketing positioning and message, filling walls with post-it notes, and even going to offsite meetings for some R&R before that big push towards a deadline are what you remember most.

To sum it up: Marketing is dirty. Numbers, statistics, and real grunt work is done behind the scenes. But we love it because our work is what makes or breaks a company. We love it!


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