Anneke Seley Interviews David Satterwhite & Mark Hamilton. Aligning Sales and Marketing: A Conversation With David Satterwhite and Mark Hamilton

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1 Aligning Sales and Marketing: A Conversation With David Satterwhite and Mark Hamilton Anneke Seley, founder and CEO of Phone Works, is the coauthor of the best-selling book, Sales 2.0: Improve Business Results Using Innovative Sales Practices and Technology. Visit for more information, including free chapter downloads, or to read and comment on her blog. The following interview will be part of her new book on sales and marketing alignment. Look for it later this year. David Satterwhite and Mark Hamilton were poster children for cooperation and collaboration at newscale, a company that offers IT service catalog and service portfolio management software solutions. David ran sales; Mark ran marketing. Their departments were separate, but in many cases, they functioned as one team. Their forward-thinking dedication to collaboration, elusive in many companies, earned newscale a market-leading position in its field, attracting more than 1.5 million users worldwide, including 20 percent of the Fortune 50. They have both since moved on: David served as executive vice president of sales for Genius.com in 2009 and is now executive vice president of sales at Yammer, and Mark is starting up a new company to bridge B2B marketing with social media; but the foundation they built as management-team partners at newscale has informed the way they and their companies, past and present work. Anneke: What does sales and marketing alignment mean to you? David: The market and business in general are moving toward a convergence of sales and marketing, because the whole process of capturing the customer is becoming intertwined. The days of Marketing developing huge demand in a silo and then throwing it over the fence into Sales is a thing of the past. Anneke: Why did the traditional approach have to change? David: I got frustrated with not getting access to leads fast enough. When Mark and I were working together at newscale, we used a well-known marketing automation platform that was very effective for campaigns; but from a sales point of view, there was no real-time access to opportunities; there was always a sizable delay. We heard from chief sales officers

2 at other companies that they were experiencing the same thing: weeks of delay in getting leads to Sales. Anneke: Where does Marketing s responsibility leave off and Sales ownership begin? Mark: Traditionally, Marketing has thought about its job as getting a prospect up to a certain point in the cycle and then Sales taking them from there. To me, it only matters when the deal closes at the other end. Marketing can run the best campaign in the world, but if it doesn t result in business, who cares? Marketing leaders need to understand that in order to be relevant to Sales. David: Every function in the company is trying to get more streamlined; it s our constant goal trying to focus on doing more with less so spending a lot of money on marketing you can t attach to revenue is something that doesn t make a lot of sense. You need a lot of collaboration at the top around your strategy to make sure you can tie revenue to marketing activity. Mark might come to me and say, I m thinking of an awareness campaign; how do you think it will help a sales person when talking to a prospect? You have to have these conversations so you can throw the strategy up against the reality of the sales cycle. Mark: Marketing is a portfolio of programs you run: You have awareness campaigns, direct lead-gen campaigns and others. If you don t have alignment between Sales and Marketing, the balance of those different pieces of the portfolio can get all messed up. So the conversation with Sales might be: I want to do an awareness campaign, but it s hard to tie that to leads; let me show you how it all fits together, and how we re trying to balance the portfolio of investments. Anneke: How do Sales and Marketing work together to find that balance? Mark: We can discuss a shift in the portfolio, a change in emphasis, but it only works when both Sales and Marketing understand the goal. A lot of sales heads freak out with broadbased sales acceleration campaigns Sales doesn t want you talking to their customers. You do need to let sales reps opt out with prospects who are already in the pipeline. For example, if we run a free trial offer, we need to open a dialog about deals expected to close in the next 30 days, and about how to make sure this free trial option does not affect the closing of those sales. There has to be communication to avoid cannibalization of the sales forecast. David: It s important for the sales team to understand how marketing programs are going to affect selling. If one functional head can t explain why something s going on in the other function, it hard to get your team behind it. Sales and Marketing should have a conversation to flesh out the strategy and get buy-in rather than plan/execute campaigns in isolation. If you

3 don t have alignment at the top, the rest of the organization doesn t have a clue, and it s very hard to execute on a company strategy At newscale, we made sure to drive the marketing process into the sales process. For example, when we evolved our marketing strategy to include free trials, we communicated clearly to the sales team what we were doing and why. We made sure they were comfortable with where the new free trial fit into their sales cycle and how to leverage it to decrease sales cycle length. Without this communication, there would have been immediate contention between the teams, and the sales team would most likely have consciously or unconsciously sabotaged the strategy; you see that happen all the time in companies. When sales people are left out of the loop, they quickly get paranoid and less productive. Anneke: How did you make sure that didn t happen? David: If Marketing s reaction to sales people who come to them with an idea is, Shut up, it s my job to have ideas, it s your job to execute, a couple of things happen: First of all, you miss out on a lot of good ideas, and second, people don t buy in, because you didn t listen to them. Mark was really good at sincerely listening to ideas, taking some and learning from them, and incorporating the ones that worked. Anneke: Tell me about your experience with marketing automation and its impact on sales and marketing integration. Has it all been positive or have there been challenges? David: At Genius, I collaborated with Marketing on automated marketing campaigns. For instance: We d plan a webinar together, including a whole automated nurturing campaign for the contacts and companies who had registered or attended the webinar. The automation was all set up in advance, and s went out automatically, depending on the prospect s response or lack thereof. If they went to our website and looked at certain pages, a sales person would be notified immediately; for other pages, they d get a certain . If the prospect didn t respond at all, an automatic was sent with different messaging, and another a few weeks later and then another a few weeks after that. At one point, my sales team said they were seeing some lead volume pickup and wanted to know why. Our marketing group said it was due to the automatic mailing from our nurturing campaign after the webinar. We didn t even know about it, because it happened automatically. We needed to make sure sales people know about the timing of marketing follow-ups and the automated s. And this brings up an important point: Fully adopting marketing automation tools can really enhance sales and marketing collaboration, but we have to make sure to continue building inter-team communication; just because we re automating the collaboration doesn t mean we can ease off the communication. One of the places marketing people can get in trouble is in understanding the brain of the sales person. Marketing and sales people are different. The power of the sales brain is

4 focus: relationship building, objection handling. You can t give them a ton of info up front and think they re going to retain it. The sales rep s job is to zero in. What Mark learned to do is dribble out pertinent information. Provide it at the right place and right times in the process. With marketing automation tools, we have to find ways to inform and educate the sales team along the way. Anneke: How have buyers changed in the Internet age, and how does that affect selling and marketing? Mark: Buyers are behaving differently now; they re becoming much more educated, and that ties into why you need to make sure you have alignment. The traditional ways of thinking about phases of education and touch points are no longer viable. The cycles are a lot shorter now. When people reach out and express interest, you can t have much latency anymore; qualified buyers are ready to move. David: There s no more put it in a batch and get the letters out next week. We highlighted an MIT study at Genius that shows the difference between following up on a buyer s interest in 5 minutes vs. 30 minutes. Of course, the specifics depend on your business, but the point was clear: It s critical to capture the buyer when he or she is interested. Otherwise you have to spend a lot of calories getting them to re-engage. Mark: The marketing and sales teams have to be much more coupled than they were in the past. It used to be a linear, batch world. One of the things we struggled with at newscale was running webinar programs where 1,000 people would register. There was no way our sales development group could follow up with 1,000 people. With our other programs, we began staggering our outreach to address that issue, but we had a challenge with webinar respondents, given events are time-sensitive. Anneke: How did you manage the high volume of required follow-ups, given limited sales resources? David: If 950 prospects aren t getting a phone call for two weeks, we have to be able to sort out the body language a buyer is showing over the Internet, in terms of what they re doing on our website. Then we test our response to certain behaviors. In some cases, it makes sense to follow up with . We didn t have the budget or head count to have 100 reps on the phone calling up the prospects; that s really expensive, so we had to be able to distinguish between who was really interested in buying now and who was not. We have to have the tools to determine who is qualified and who is not.

5 Anneke: Let s explore the concept of digital body language a bit more. Sales 2.0 technology enables us to track and measure what buyers do on your website the pages they look at and for how long. Advanced lead scoring takes this into account, in addition to traditional BANT (budget, authority, need and timeframe) ratings. Have you been able to determine at what score a prospect should be introduced to a sales rep? Have you been able to correlate prospects activity on your website with their making a purchase? David: We start with the knowledge we have today, then learn from it and adjust. We are in touch with our customers at all times. We re constantly readjusting the steps we re taking in the sales cycle, based on customer behavior. And, ultimately, we help our customers understand that process for their customers. Mark: The challenge to lead scoring is that Marketing thinks about lead scoring on an aggregate level, and Sales needs to think about it on an individual level. Many tools are good at either macro or micro levels, but not very good at bridging the gap and having lessons learned between them. Anneke: It seems lead scoring can be very helpful once you match the customers who buy with what they did in the early parts of the process. Is that different in small and large companies? David: In my sales experience, bigger companies have more people involved in the purchase decision. Even for small deals, there aren t a lot of people with $50K budgets who can just go spend the money. Or if they have the budget, there s typically someone else who has to be involved in the decision, such as an IT specialist in a software decision. Anneke: Can you tie any metrics to sales and marketing alignment? How do you measure the benefit? David: There are so many things that make up sales and marketing alignment; it s easier to see the dysfunction that happens when it s not there. At newscale, we came together to create a market and build a company. One of the things we figured out was how to work together effectively; we created a situation where we had sustained growth during a period of 4 5 years, averaging 83% 85% per year. We found out very quickly we d picked a tough market to create, because we were selling a business application to IT people, but IT people aren t used to buying products for themselves, so it was a really tough sell. We didn t have the luxury of not executing super effectively. If we were building a sustainable business, we had to execute very well across functions. It was out of necessity that we developed this integrated way of working.

6 Anneke: What strategies, processes and technologies supported your sales and marketing collaboration? Mark: The technology was a secondary factor. You can t solve lack of cooperation by bringing in software; it s not a technology problem. David: The right tools help facilitate it, but culture is more important than technology. Maybe that s why collaboration gets ignored or dropped, because it s not about strategy or process; it s about culture. If you set up the right culture, everything comes from that: You get the right people, process, tools. Anneke: Let s say you re working for a huge company where the culture does not foster sales and marketing collaboration. Is it possible to create a culture within your own departments that s not the same as the corporate culture created by the CEO, and drive that alignment? David: I think you can go part way. A liaison role needs to be created between Sales and Marketing in larger companies to help make this happen. It then becomes harder for Sales and Marketing to point fingers at each other, because it s the same person. Mark: You don t have to have a company culture of collaboration. It s great if you do, but it doesn t preclude you from having it between Sales and Marketing. What would preclude it is having a CEO who encourages a culture of conflict. Then you can t win. In one of my previous chief-marketing-officer roles, there was a corporate marketing function, but in each of the geographic territories the marketing function reported into Sales. When I first took over the group, the regional sales reps didn t want anything to do with corporate marketing. We ended up setting a culture where each geography s marketing team came up with ideas, then sold their ideas to other geographies. The German territory actually funded their program by selling and executing campaigns for the UK and other countries. We began to see collaboration between the sales-driven geographies and corporate marketing functions. Anneke: In your view, when should marketing hand off a lead to sales? David: It can happen in multiple places. It s really about what the buyer is telling us. At Genius, we found viewing certain web pages and spending minutes on the site correlated to buying, so we handed those leads off to Sales at those points. On the other hand, we found downloading certain white papers didn t correlate to buying, so we didn t hand off at those points; we kept them in marketing for nurturing.

7 There are no hard and fast rules, though. In the world of Sales 2.0 and marketing automation, we monitor the process all along, and we learn from the monitoring process. Sales development or lead qualification plays a critical role, engaging buyers who are qualified enough to go to Sales but not yet qualified for a quota-carrying salesperson. Mark: There s no magic answer. To me, it depends on various factors such as sales reps personalities, skills levels, and the time of the quarter or month. Some reps can handle high volume without getting overwhelmed, and focus on building territory. Others don t want to talk to a prospect until they are ready to buy. There s no way Marketing can make a unilateral decision regardless of personality. We can give a rep the ability to dial it up or dial it down. This can change during the last 30 days in the quarter. Some reps can close sales in 30 days, so they need leads even in the final month. For new people or people who are building pipeline, we d have a different process. Also, as the marketing guy, you have to be really cognizant, check in with Sales, ask how you re doing and if the program is tied to revenue. You have to be careful in that discussion, because it can come off as pointing fingers or blaming. I work really hard never to have it perceived that way. Anneke: Let s talk about lead nurturing or managing the middle of the funnel. How do you do that and whose job is it, Sales or Marketing? David: Marketing. Sales can provide input. It s not so much Sales vs. Marketing, but looking at buying cycle rather than sales cycle: When is the buyer ready to talk to the sales rep? We want to give a prospect the ability to self select, to say they want to talk to someone in Sales. In addition, we want to observe behaviors and immediately do different things based on that. Sales is about execution: You manage activities of selling. Marketing has the largest influence over the nurturing process and is more involved earlier in the cycle. For Sales, when something comes to you, you make a judgment call about where it is in the buying cycle. We want the sales person to have authority to refer a contact back into the marketing process when that person is not ready to buy. Anneke: There s a lot of debate about when in the sales cycle you call a prospect. Or do you leave that up to the buyer? Mark: It varies depending on the maturity of the market. In very new markets, my preference is to hand over inquiries right away and have more person-to-person interactions. As you get to commodity markets, where messaging and offer are pretty well-cemented, then Marketing ought to take that burden from a sales rep, so it will evolve over time. At newscale in the early years, the sales development team did a lot of phone outreach. Eventually, there was dotted-line reporting to Marketing. The team would have one-on-ones with both of us.

8 David: My one-on-ones would be about activities: calls, s, pipeline management. Mark s one-on-ones were about approaches taken, what are we hearing, how is the message resonating, what questions are we getting. Anneke: What will alignment look like in the future? David: In the future, sales and marketing professionals will receive training in working collaboratively. This business education could be included in undergraduate and grad school curricula. We don t teach enough in our business schools today on how to communicate effectively and play well in the sand box.

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