Straight Talk with Katy Keim: Marketing and Sales Alignment
In this video Steve Farnsworth interviews Katy Keim, CMO of Lithim, on marketing and sales alignment.
How would you describe the state of marketing and sales alignment today?
I would think as much as marketing and selling has changed over, let’s say, the last three to five years, I wouldn’t say that alignment is particularly strong. And that’s largely because sales and marketing teams had aligned around selling right at the customer, either with offers or product-centric information, and “me, me, me”.
The consumer has really changed, too. As a result, marketing and sales teams are on different levels of maturity on how to address that. And because of that, they could be out of alignment in terms of how they’re chasing their particular initiatives.
What steps should be followed when planning the marketing and sales alignment process?
I always start with the end goal. What are we driving at? And that may be increased revenue or better retention. Does that involve productivity of the sales organization? How fast are they going to ramp? There are a number of things. You have to start with the end in mind of what are we both driving for because the alignment is going to come from the shared goal.
What are the biggest mistakes you’ve seen that hurt the process?
We’ve all seen a fair amount of mistakes that hurt the process. The first is misconceptions about what people are driving towards, and it’s usually the most symptomatic. People operate with the best intentions, but they have a near term focus about what’s most important for them to contribute. Clichés about our counterparts are crippling. Oh, that’s marketing. Oh, that’s sales. Sales only cares about this quarter. Marketing only cares about their stupid programs. When you get into an organization that’s high performing and challenging, these preconceived notions are very limiting. Another big mistake in the sales and marketing alignment process is not having a real handle on the data. It’s very easy to talk about metrics and reporting, but where it goes south is when we tend to use anecdotes. When we aren’t using the full set of information available to us, it’s challenging to figure out where the real problems are.
What are the most important metrics to ensure alignment practices are healthy and on track?
It’s all about the sales and marketing alignment around the revenue. We think about it in terms of the new revenue coming in as well as retaining the health of our relationship from a revenue perspective. The key places to look at are the success, in terms of close rates, deal size, the revenue opportunity and the velocity. Oftentimes you may be getting to the end point but you’re not getting there as efficiently. It’s orders of magnitude of how you try to improve those steps and the alignment. Are we getting to the goal? Are we getting to the goal fast enough? Are we getting to the goal as smart as we can? Those are some of the questions that guide the metrics that we use.
What metrics should bonuses be tied to for chief sales and chief marketing executives?
I love when people say it depends. Because that’s a weak answer, but there are different phases in a company’s business and the metrics should shift with it, particularly on sales and marketing. It’s driving the velocity of the top line growth.
In Silicon Valley, growth is rewarded. You want to make sure sales and marketing are generating growth on the most efficient basis. The metrics are revenue attainment and productivity of that revenue attainment. Have we deployed that dollar to get those five dollars in revenue as effectively as possible, in terms of marketing and spending, in terms of field organization? In the case of our company and in terms of partner channel, I find that the conversation is rarely, “should we spend a lot of money on sales and marketing?” Instead it’s, “are we spending that money the best way that we can?”
What practices do you recommend to foster successful marketing and sales alignment?
I feel like in my past experience, sales and marketing alignment was driven by a pipeline column, which is like, “here’s the flag.” I don’t recommend that. In some ways, marketing has been forced to drive to a sales reporting cadence. Instead, a more collaborative way of looking at it is abstracting from the deal level. Looking at a quarterly, weekly, monthly basis on the alignment. For example, on the quarterly level, QBRs. What happened in the quarter, what could have gone better, what suggestions do we have to improve lead flow, or selling techniques?
We look at it on a rear-view basis. On a weekly or bi-weekly basis, look at pipeline creation levels. What’s moving in the pipeline, what’s moving out, what’s the velocity, etc. It’s more of an operational cadence.
Who should be included on the marketing and sales alignment team?
On the sales and marketing collaboration team, there needs to be a combination of team members that can bring together different levels of data. I’ve typically liked someone from the sales ops or marketing ops function for this team. Someone that can bring their useful analysis to inform the conversation.
At our company, we look at field marketing, the people that in theater can describe what’s happening on a regional basis, and then the head of sales leadership within that region. We tend to have operational, programmatic and then sales executives in that alignment conversation.
What trends do you see in marketing and sales alignment over the next 12 months?
If I knew what the trends were I would get a big fat bonus. One of the biggest trends that I see in our business is money needs to be shifted, and that is a hard problem to solve.
Money that may have been spent on sales development reps, when a cold call doesn’t work anymore, might be shifted to content. Sales wants face-to-face programs, but those may be too expensive. That money may be shifted to programs that exist within the organization. Trade shows may give way to more targeted functions.
Not just moving money within the marketing portfolio, but moving money from the sales portfolio directly to the marketing portfolio. Sixty to seventy percent of prospects are making the buy decision before they even talk to the sales team. It’s controversial, but the smart companies are going to make those kinds of shifts.
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