Chief Executive Officers and Chief Financial Officers expect their Chief Marketing Officers (CMO) to be accountable for business outcomes. Justifying one’s achievements by citing how the response rate from campaigns could be increased with an even smaller budget than last year, does not fulfill such expectations. CMOs are thus faced with the harsh reality Chief Sales Officers (CSO) are used to living in. Their performance has always measured by the amount of sales they create for the company. In this article, I’ll explore if CMOs can learn how to step up to the new requirements of their function by looking at how savvy CSOs in a B2B environment manage for effectiveness.
How do CSOs manage for Sales Effectiveness?
Savvy CSOs have learned that they cannot manage the sales number directly, as it is the outcome of a process. If they want to be successful, they have to monitor and guide their people in relation to how they manage the conversion process of turning prospects into paying customers.
Those active in complex B2B environments also know that focusing on the efficiency of the process alone will not provide the desired results. Since the publication of Neal Rackham’s book “SPIN Selling”, there is scientific evidence that there is no positive correlation between a sales person’s activity level and the ability to generate sales. Therefore, simply making more calls does not result in more sales. Sales are increased by improving the effectiveness of the activities in the process; meaning that activities carried out by the sales person have a positive impact on the prospect to increase the incentive to buy, OR lead to the conclusion that the prospect is not yet ready to buy and activities can be redirected to other prospects.
Good conversion processes to turn prospects into paying customers consist of several steps, and map sellers’ activities to how prospects want to buy. Effectiveness can then be measured as the percentage of prospects that convert from one step to the next (conversation rate) and the elapsed time to move the prospect to the next milestone (lag).
How do we now expand this concept to Marketing Effectiveness?
CMOs and CSOs need to come to a common understanding in regards to what percentage of total company sales Marketing will be held accountable to. Especially in organizations with key account management, Marketing will never generate all the leads that eventually convert to buyers. Using the historic conversion rates, CMOs and CSOs can then agree how many leads Marketing has to generate, and the CMO can then extrapolate how many untroubled potential customers must be touched to produce this number of leads.
Although the direct influence of Marketing diminishes while the buying process is progressing, Marketing needs to monitor conversion rates all along the process. A ‘throw leads over the fence and forget’ mentality will not maximize effectiveness. In fact, the lower than expected conversion rates in later stages of the conversion process might have their origins in marketing activities.
The handover and forget type of mentality is also not optimal for another reason…
Sales people, for obvious reasons, tend to forget / ignore prospects not converting to the next stage or stalling at a stage. Research reveals that a large percentage of those prospects not converting at the particular moment they are touched by Sales will though buy within about 18 months. If Marketing retakes those leads and puts them into a nurturing program, the company will stay top of mind in the event that the prospect decides to buy. The eternal opinion-based debate about Marketing not producing enough leads, or Sales not following up on the leads, can now be replaced by a common set of metrics allowing for more objective discussions.
Who should take the initiative for aligning Sales and Marketing for higher productivity?
Experience shows that CSOs, as they are already held accountable for sales, tend to compensate a perceived lack of marketing support in lead generation by driving their organization to produce the prospects necessary to reach their sales goals. CSOs know that this approach is rarely cost effective as salespeople are too expensive and often also inexperienced and reluctant to carry out such prospecting activities. Nevertheless, they will tolerate it as they are primarily measured by reaching their sales goal.
So it is probably the CMO who will have to make the first step for an improved collaboration. However this cost argument is not a good place to start such an initiative.
Offering help with stalled and non converted-leads is probably the most attractive starting point to gain credibility with CSOs. Every revived lead converted to a buyer provides extra sales for a CSO. Once the CMO has proven the value of his / her organization in such a manner, it should be easier to engage in a full joint go-to-market plan to maximize the company’s selling capacity at an optimal cost point.
The above approach requires CMOs to adopt the mindset of seeing sales as a customer. Changing the mindset is not easy; especially when one’s understanding of the job is based on statements such as the one by Peter Drucker: “There will always, one can assume, be a need for some selling but the aim of Marketing is to make selling superfluous.” Remaining in a silo mentality is not an attractive option either, as it shortens the CMO’s tenure.
About the Author
Christian Maurer is a Paris-based independent Consultant, Trainer and Coach who helps B2B organizations increase their sales productivity by improving Sales and Marketing Effectiveness. He is a member of Top Sales Experts (www.topsalesexperts.com), an accredited Funnel Coach with align.me and is the author of the blog “The Ultimate Sales Executive Resource” (https://ultimatesalesexecresource.blogspot.com). For comments, feedback and enquiries, he can be reached at [email protected]