Episode Transcript
Jeff Davis: This is Jeff Davis with The Alignment Podcast, where we explore sales and marketing alignment strategy for B2B businesses. Make sure to visit jeffdavis2, the number 2, .com, for all things alignment. Now, let's talk about how to create togetherness.
Jeff Davis: Today's guest is Tracy Eiler, CMO of InsideView and coauthor of the book "Aligned to Achieve." Tracy has recently been named a B2B demand marketing game-changer, is included in the Top 20 Women to Watch in Sales Lead Management, and in the Top 30 Most Influential Women in B2B Marketing Technology.
Jeff Davis: Today, Tracy and I talk about the reasons behind the historical conflict between sales and marketing, how to get your CEO on board by making a strong business case for alignment, and last but not least, the metrics that matter, truly matter, in achieving revenue growth for the organization. So with that said, let's start the episode.
Jeff Davis: Tracy, thank you for being on the podcast today.
Tracy Eiler: Jeff, thanks for the invitation. It's great to talk to you and your audience.
Jeff Davis: You, as well. So excited. I've read "Aligned to Achieve", so I really want to do a deep dive into the sales and marketing alignment strategy and get your insights and expertise for those that are listening.
Tracy Eiler: It's a popular topic.
Jeff Davis: It is very popular. So why don't we just start with, tell us who Tracy Eiler is, and how did you become to be so passionate about sales and marketing alignment?
Tracy Eiler: So I'm a lifetime business-to-business marketer, and my very first job, when I was 16 years old, I was a sales development rep, or lead qualification rep, for a software company when I was in high school. And that experience was super-interesting. I was one of four high school kids that all went under the pseudonym of Chris Kelly, because it was a gender-neutral kind of homogenous name, so if any of us quit, Chris would live on. That experience really opened my eyes to what it was like to be on the frontline of talking to a prospect.
Tracy Eiler: And in addition to that, I got to be friends with some of the sales executives that were in that company. It was called Com Share, and it was in Ann Arbor, Michigan. And I realized how much pressure they were under, and in fact, I started a little business on the side where I did errands for them, because they traveled so much. So for 100 bucks a month, Jeff, I would pick up their dry cleaning and do lightweight grocery shopping. They all happened to be single guys.
Tracy Eiler: So that really gave me an affection and an affinity for sales execs, and then when I got into marketing, I was just always out in front of figuring out what sales needed and making sure that I really saw things from their perspective, and I really believe that marketing exists to make sales easier, and that's been a mantra my whole career. But like you and I have talked about in other conversation, there's often this tension between sales and marketing that is sometimes even encouraged by the CEO. So the topic is a lifetime topic. Every sales and marketing person I talk to has strong emotion around it.
Tracy Eiler: And so I've gone on in my career, and eventually becoming a CMO about 10 years ago, I just decided I really need to take this topic head on. I want to see how bad the problem is. Did some original research about it, and then teamed up with my sales exec counterpart, Andrea Austin, to coauthor this book. So Wiley published it last fall. It's done very well. It's sold more than 15,000 copies. It's generating royalties. I never thought that would happen. And folks are really talking actively, and I think a lot of it is because the buyer has really changed so much and is more in control in the way that they are gathering information and participating in the sales process. So it's really becoming in imperative for us to fix this problem, and I'm very passionate about it because of that.
Jeff Davis: Yeah, I agree, and I think I come from a very same perspective.
Jeff Davis: So help those that are listening today. Let's look back in history. What has caused this tension? 'Cause this is not new, right?
Tracy Eiler: No.
Jeff Davis: We all know that sales and marketing many, many times have combative and even sometimes toxic relationships. From your view, why has that happened historically?
Tracy Eiler: I think there's several fundamental reasons why sales and marketing kind of just doesn't get along, and some of it is rooted in our time horizon view. Sales is working on a quarterly cadence. Everything changes in their world about three weeks before the end of the quarter, where their tension just ratchets up. And marketing is working on a long-term cadence. We're thinking of now ... it's almost November 1st, we're planning things for next June already. And so some of it is just inherent in the way that we look at our timelines, our objectives, and so on.
Tracy Eiler: I think another area is that we have just traditionally not been measured on the same things. I know many, many marketers who are measured on some sort of a lead metric, top of funnel, quantity, quality, something like that. And of course, sales is measured on revenue. So there's this big chasm in between those two statuses that I think really make sales feel like marketing is not relevant to them in the here and now, and it makes marketing just really not understand the urgency. So in the book, I advocate that the two teams should really align around pipeline or opportunity. [inaudible 00:05:37] helps marketers make hard choices, harder choices, about where to spend their time.
Tracy Eiler: And I also think that the teams have traditionally not even been co-located, in general. Sales and marketing executive might have a relationship, but at the individual contributor level, the demand gen manager isn't interacting with the sales rep unless they're at a trade show, because that's typically the only time they talk. And so that really needs to change.
Tracy Eiler: Of course, there are stereotypes around all of this. You think about sales people as being carnivorous, being super-assertive, maybe even bullies, marketing people being more collaborative, a higher emotional quotient, things like that. I think those are generally stereotypes that most people would nod their heads around. And one of the things I try and do is really help my marketers understand yes, salespeople do need to be assertive, they need to be pushy. They can't close deals if they're not, so of course they're going to be that way. And I think that most marketers would say that their sales counterparts just can't pay attention, they can't sit still, they don't listen to detail. They've got to move. They're constantly got to be moving. They're like sharks. And so it's no wonder that they're not going to read your four-page email on a subject, right? You've got to give them digestible nuggets.
Tracy Eiler: And I hear you laughing, right? But it's true.
Jeff Davis: I've been there. I've been on both sides of the fence, where you get a three-page email, and I'm like, "I don't have time to read this."
Tracy Eiler: Yeah. "Go away. You're irrelevant to me."
Tracy Eiler: So I think those are some of the reasons, and add to that that I think a lot of CEOs, especially CEOs that are not experienced, they want sales and marketing to have, air quote, healthy tension. They think they're going to get some Darwinian Survival of the Fittest best result if sales and marketing are fighting. And I've even worked for CEOs who literally wanted me to fight with my sales VP counterpart and would do nothing to help us resolve issue. And so I think that ... you know, you add it all together and you've got this perfect soup for conflict, and it has to change.
Jeff Davis: Yeah, I agree. And staying on the theme with the CEO, so let's say that the VP of sales and the CMO of a company agree, like, "We've got to do something. I'm on board to help you help me and help this company move in the right direction," if that CEO is not quite on board, very much like the one you worked for in the past, how do we go to that CEO with a business case? How do we make that business case to allocate resources to an initiative like this?
Tracy Eiler: Yeah. Well, what I have found, and Andrea and I, my coauthor, experienced this firsthand, when we came together to our executive staff with a request, let's say, for example, there was a campaign that we wanted to do or a major trade show we wanted to invest in or a sales enablement initiative that her team really needed that we weren't funded for, if we came together, it was very, very hard for our CEO, and even our CFO, who often has to weigh in on funding, it's very hard for them to say no.
Tracy Eiler: You get your revenue engine, sales and marketing, together in a room, so just by the sheer fact that we are responsible for the revenue engine and the prosecution of those opportunities and the happiness of those customers to upsell them, the fact that we have that power when we speak together, it's irresistible. So even if they do want us to be fighting, if we come together, it's very hard to say no. I've witnessed that firsthand. So that's thing one.
Tracy Eiler: Thing two is, there's data that I've found in the primary research that fuel the line to achieve that simply shows that as much as 10% of a company's revenue can be impacted positively or negatively from a lack of alignment, and that's remarkable. IDC has data that says that, as well.
Tracy Eiler: And then there's other data, Series Decisions has some, that companies that have aligned sales and marketing have 19% faster growth. 19%, right? What wouldn't you do for 19% faster growth? And up to 15% more profit.
Tracy Eiler: So there's hard numbers that prove it, in addition to the fact that Andrea and I have joked around and call it "collusion", but if we're together arm in arm, they can't say anything about it. It's kind of like if all the kids in your family come to Mom and Dad and say, "We want a dog," it's very hard to say no when everybody is ... all the opinion leaders are asking for the same thing. So there's hard numbers, but also some just human interaction that proved to be positive.
Jeff Davis: That's a good point. So I want to change gears a little bit and talk a little bit about the sales funnel. So I saw a video you did with Gerhard from Selling Power, and you mentioned that marketing needs to have visibility into the sales process. What I found interesting in your book, Chapter 3, to be exact, you talk about this change from sales funnel to continuous engagement model. Help our listeners understand, what is that? Why are we changing or why do we need to change the way we look at that?
Tracy Eiler: Okay. That's a great question, and I think it's fascinating. We were all taught that marketing and sales, the whole process, looks like a funnel. And I know that your listeners can visualize that top of funnel very wide, the bottom of the funnel more narrow, and we obsess about the conversion rates from stage to stage as if it is a linear process with, let's say, Acme as the customer, coming into that top of the funnel, coming out the bottom. We sell that deal and we say, "Yay for us," and then we move on to the next company.
Tracy Eiler: Today, so many of us have subscription revenue models, where that renewal rate is a huge part of our ongoing revenue, and the opportunity to upsell our customers is very, very profitable. We all know that getting an existing customer to buy more, new products, expand your services and so on, is way cheaper, way more efficient than finding that new customer. So I argue that the funnel isn't really a funnel anymore. Think of it as a sideways 8 or an infinity loop that is continuous. And the reason for that is you find Acme and you get engaged with them, you close your first deal, and then you focus on growing that deal and growing, growing, growing, and that continuous loop just keeps going.
Tracy Eiler: In fact, Forrester had their annual B2B marketing summit about a month ago in Austin, Texas. I had the opportunity to attend. And the whole theme was marketing and sales coming together for a better customer experience because of this issue of customers being so much more profitable. And even if you're not a subscription business, it still holds true, that customer expansion is the most profitable way you can grow your business. So that's really why, and there's a lot more I could say about it, but the bottom line is growing your customer base is very, very good for business.
Jeff Davis: Yeah. And I like the graphic that you show that you kind of focus on these four stages. It's really about find, engage, close, and grow, and so that's a really good way to think of it.
Jeff Davis: In the little time that we have left, I want to focus on metrics. So in my time hosting the Sales and Marketing Alignment Summit, I've had many conversations around metrics. Many organizations, sales is looking at one set of numbers, marketing is looking at another set of numbers, and so when they try to actually evaluate what's working, they really, truly can't, because they're looking at two completely different data sets. So as we look at building out this shared dashboard, where do you see most organizations are missing the mark when it comes to metrics?
Tracy Eiler: Yeah, that's easy. I think there's one metric that matters. There's a lot of things we look at, of course, but the primary metric to start around is pipeline. And what do I mean by "pipeline"? 'Cause some companies define it differently. Once an account hits a stage where sales is associating a value to it and they call it an opportunity that they're actively working and forecasting, that's pipeline. And usually marketing doesn't pay any attention to pipeline, and usually sales is obsessed with pipeline and they want three to five times coverage to make sure that they're actually going to make their quota.
Tracy Eiler: So if we start with pipeline, Jeff, and then work backwards and forwards from there, we find ourselves having a common set of data that is truth. And marketing, of course, is going to be looking at all sorts of other metrics prior to that pipeline definition, our cost per lead and things like that. And of course, sales is going to be looking at what happens after pipeline, their close rate, their deal size, average days of sale, and so on.
Tracy Eiler: But when we anchor to pipeline, it really helps sales see that marketing has skin in the game, it helps marketing have much better empathy and understanding for what's going on in the sales process, and frankly, be more ruthless around what choices we make on programs that we're going to invest in, not only money, but our time. It helps make it crystal clear when you realize that, let's say, that advertising campaign that you just ran didn't generate any pipeline or that trade show that you spent 80 grand on generated $10,000 in pipeline, is that really worth it. So I say start with pipeline and follow.
Jeff Davis: Yeah. I couldn't agree more.
Jeff Davis: So my last question for you, one of the reasons that I was motivated to create this podcast was to bring some clarity for executives that are trying to change their organization to be more aligned. There's a lot of stuff going on and there's a lot of tactics, a lot of products, a lot of strategies that are out there, and so I always want to close out with advice from my guest in, as an executive, what is the one thing or one theme that I should keep top of mind as I kind of go along this journey to aligning my sales and marketing teams?
Tracy Eiler: The theme that I think is the most important for sales and marketing alignment is the attitude that marketing exists to make sales easier. I have a little parentheses after that phrase, Jeff, which is, (but we're not doormats), because marketing should not be order-takers or be stepped on by sales. But when marketing has the attitude that they're there to make sales easier, that we're here to serve our sellers, I think that helps all the way around. Show value to the sellers that marketing has really got their best interest in mind, that we're not trying to tell them what to do, that we're trying to provide the right air cover, or whatever the metaphor might be.
Tracy Eiler: It's a little controversial, because I do know CMOs who say, "I'm not a servant. I've got an opinion. I should be driving the company." But when we bring that empathy to the table that we're here to make selling easier, 'cause guess what, we're all here for revenue in the end, I have found that that really gets your sales counterparts to just sort of relax a little bit. They're not coming to talk to you in a defensive posture when marketing has extended that olive branch, and I think it's beholden on our CMOs to have that attitude and to impress it upon their teams.
Jeff Davis: Perfect. Well, Tracy, thank you so much for being in the show and spending time with us and sharing your expertise.
Tracy Eiler: You are most welcome. And I really expect that this topic of sales and marketing alignment is we're going to see some major strides forward in the coming year.
Jeff Davis: Thanks for listening to the episode. Don't forget to visit me at jeffdavis2, the number 2, .com, and follow me on Twitter at Jeff_Davis2.
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