Straight Talk with Mike Volpe: Marketing and Sales Alignment
In this video Steve Farnsworth interviews Mike Volpe, CMO of Hubspot, about marketing and sales alignment.
How would you describe the state of marketing and sales alignment today?
The good news about the state of the union for marketing and sales alignment is that marketers and salespeople are thinking about it a lot more. We're getting a lot more conversations happening about it but most companies aren't doing a great job of executing on it really well. We're not all there yet, in terms of having a large percentage of companies executing really well and having good marketing and sales alignment.
What steps should be followed when planning the marketing and sales alignment process?
I break down the thinking about this, or the building blocks, into two big pieces.
One is around having the right goals and the right hand-off between the sales and the marketing team. It is about taking the revenue plan and breaking it down. Some questions to answer include: How much of that is marketing going to drive? What exactly is that hand-off between the sales team and the marketing team? What is the marketing team going to provide? What exactly is a sales ready lead for your particular company and your situation? How many of those will the marketing team need to provide? That's one set of activities.
The other set of activities really revolves around communication and how you want the communication to work. Part of it is determining if it should just be the senior level or include portions of the teams. There's some sales and marketing alignment using a cross functional team, or it can be more organic throughout the whole organization. This will be different in every company based on the culture, whether it's inside sales or outside sales and things like that. Communications, or the communications structure, is a critical thing you really need to be thinking about.
What are the biggest mistakes you’ve seen that hurt the process?
One mistake is that sales and marketing will discuss the hand-off position between the two teams without going into the right amount of detail when defining a sales ready lead. It’s important to really get both sales and marketing to agree on all the different aspects to it. Many companies run into this problem a fair amount of the time because the marketing team may pass leads over to the sales team, while the sales team may look at the leads and rejectthem. Another breakdown that I see is the frequency of tracking metrics. Very few people do this well. At Hubspot, we look at ours in real time and there are dashboards that go out every single night. Unless your marketing team is paying attention to what you're supplying to the sales team on that micro time scale, you're really likely to go off track. You're less likely to hit your goal.
Here’s an example. Let's say you need to provide a thousand leads to the sales team in a given month. If you only check your metrics weekly, you may only notice that after one week you’ve only passed 50 sales ready leads over, leaving you really behind. Whereas, if you check daily, you quickly figure out how you're falling behind. If you watch swimming in the Olympics, you’ll see a yellow line that is marking the world record. You can see very clearly and you can watch to determine if the swimmer is going to catch up or fall behind. Having that yellow line in real time shows you how you're doing in your marketing goals and it’s an important check to ensure you are able to hit your goals. You can’t wait to check the yellow line at the end of the race. You want to have that intermittent feedback throughout the race.
What are the most important metrics to ensure alignment practices are healthy and on track?
The real key metric for measuring sales and marketing alignment is number of sales ready leads. Once you've defined that, how many of those is the marketing team delivering on a micro basis, or on a daily basis?
A key thing to keep in mind is that you want to make sure you're sure to hit those goals, and you're staying on pace. You're not trying to win the marathon by walking the first half of it and then sprinting the second half. That means you are tracking the number of sales ready leads, or whatever that hand-off point is between marketing and sales, and how it's working.
If you want to get more detailed, another thing I would look at to ensure the process is working is the acceptance rates, or work rates, or something that shows you how many of those sales ready leads are being engaged by the sales team, and in what time frame.
If you look at those it gives you a sense of making sure the sales team is happy with the stuff being handed over. Those are the two. There's lots of other metrics that you should track around true sales and marketing alignment, but those are the two I would hone in on.
What metrics should bonuses be tied to for chief sales and chief marketing executives?
At a high level I think it's revenue. A huge part of my variable compensation is actually based on the company’s performance as it pertains to revenue goals. There are a lot of ways that marketing can help the sales team hit the goals beyond just straight lead generation. You want to have the right incentives in place so the marketing team hits them.
I also have the portion of my marketing team that deals with the middle of the funnel and lead generation. It's not a huge portion but they do have some variable comp that is aligned with the part of the sales team that they're aligned with. Does that portion of the sales team actually hit their revenue goal? The marketing team will make a little bit more or less money based on that.
Beyond that, you can look at the portion of the pipeline that marketing contributed. For example, how many deals closed overall and how much pipeline did they contribute? You can look at some other metrics around that. At the core what you care about as the CEO is revenue. You can try to tie both the marketing and the salesperson to that.
What practices do you recommend to foster successful marketing and sales alignment?
The best practice approach for sales and marketing alignment all starts with communication. Let me explain.
We found that a lot of really regular communication about the basics and critical definitions helps. But, the communication around those metrics is key, and good communication between the two teams is key as well. We communicate this with the SLA or service level agreement between marketing and sales. We publish those metrics daily and they not only go out to the marketing team but also to the sales team.
We are open and transparent with how the marketing team is performing. On the flip side we are also transparent with how the sales team is performing. The marketing team gets daily reports and dashboards around, “is the sales team actually calling our leads back?” How much are they working them? Are they working them deeply enough? And what that really does is that public transparency gives you a lot of incentives for both teams to hit their metrics. No one wants their team to look bad in this dashboard that's going out to the other team.
Regular meetings at different levels also help to open up communication. We have a manager's meeting between the sales managers and the marketing managers for different portions of our sales and marketing team. They get together weekly to review what's going on in their line of business. Then we have an all hands meeting of sales, marketing, everyone from both of those teams once a month where we go through the results. We highlight key great performances from people in sales, people in marketing. We talk about the marketing and sales results.
Mark Roberge, our SVP of sales, and I lead the content for that meeting. That helps align the whole team. We have a frequent set of meetings. Part of the advantage of having a completely inside sales team is that we can have more of those meetings in person and we try to make use of that. The communication is key both around the electronic automated communication and in the personal stuff.
Who should be included on the marketing and sales alignment team?
The most important thing is that it can't just be the head of sales or the head of marketing. It's just not scalable if it's just those two people. They can have a very good relationship but if their teams don't get along you're not going to get anywhere.
For us, what we've found works best is having the entire team responsible for it. There's lots of ways to get many people from the marketing team involved with many people from the sales team. There are lots of different collaborative efforts and things like that.
Maybe for some larger companies, for companies where it's more difficult to spend face time with the sales team because they're a field sales team distributed around the world, having a smaller group of sales and marketing people working on an alignment can work, but for us we've found having as many touch points as possible between sales and marketing has worked effectively.
What trends do you see in marketing and sales alignment over the next 12 months?
Predictions are always tough. I feel we're seeing a lot more conversations around tools available to sales teams and to marketers. It's going to be the year where we start to see more companies performing well in terms of marketing alignment.
You have a lot more social and other types of collaboration tools within the company. You have a lot more data available. You have a lot more real time information about leads. People are getting smarter and smarter about this stuff. I hope the coming year we stop talking so much about sales and marketing alignment and actually start really delivering on it in a big way.
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