Change Management: Critical Skill for B2B CMOs in 2013

Have we reached a “new normal” for marketing budget growth?

Will marketing budget growth trends continue to shrink?

IDC’s findings from its 9th annual Technology Marketing Benchmarks Study show concerning results about the future of marketing budgets.  Prior to the start of the recession, marketing budget growth tended to keep pace with revenue growth.  In high tech, this looked like 6 – 7% per year on average across a variety of firms, large and small.  After everyone hit the reset button in 2009 and slashed budgets into the negative growth range, recovery to pre-recession levels continues to look distant, if not impossible, to achieve.  Current marketing budget growth rates are only half of those rates seen previously.

For many marketers, business leaders and financial officers now demand way more efficiency and accountability than was expected 5 years ago.  Marketing must build a business case for every program and demonstrate a return on investment.  Those marketers who do this well win budget approval for key programs and those that don’t struggle along with shrinking budgets.

Can automation help marketing get more efficient and be more accountable?

Partially.  It is almost universally accepted that applying technology to a poor business process only makes the flaws stand out.  But process improvement is where the future of business marketing lies.  In 2013, successful CMOs will turn their attention to managing change in this new era of marketing budget scrutiny and pressure. In a recent Forbes blog post, David Cooperstein — the leader of Forrester’s CMO & Marketing Leadership practice – outlines 5 areas where CMOs need to get smarter about before having change management conversations with their peers, team members, and agencies.  I want to second his advice and add a couple of more points for CMOs who work with Chief Sales Officers in organizations where direct sales is a dominant part of the business.

Besides defining the future state of the organization, mapping process against that and figuring out where technology can help, these CMOS also need to learn more about how to:

1)      Evolve the sales process.  Today, buyers are more than half-way through the purchase process when they decide to talk to vendor reps for the first time. To get ahead of this, sales execs want account managers to “be more relevant”, to get into the need-identification conversation earlier by introducing buyers to critical, insightful information about their business.  They expect reps to go online, mine social network relationships, and target executives with business-relevant information.  That’s a long way from a cold call.

2)      Shift from messaging to creating relevant conversation. Smart CMOs need to understand how the sales process is changing and partner with CSOs to make it easier for reps to have business-relevant conversations. Developing good marketing content that shares a unique point of view on industry-specific issues is the start.  But managing the change needed in the sales process to encourage and reward reps for having business-relevant conversations instead of yakking about features and benefits, is a change management challenge marketing must help sales overcome.

I think David is spot-on when he says that it’s difficult for CMOs to articulated the change management required for marketing to succeed in implementing and making use of the technologies that are now available to them – and that they aren’t going to get much help from vendors like Deloitte, IBM Global Services and Accenture in the meantime.  But I think B2B CMOs face a more insidious challenge – that of making marketing a true partner to sales – one that can help reps leverage the power of online, social activity to become a true partner to prospects, not just the organization trying to get them to sign on the dotted line. And to get this done without jeopardizing the brand image and equity many big firms enjoy.

“Moneyball for Marketing”: Why Automation Matters

Source: October 4, 2006, “Improving B2B Lead Management” Forrester report.

Remember this picture?   As a Forrester Research analyst, I published a report called “Improving B2B Lead Management” in October 2006 where this image first saw the light of day. 

Since then, it’s become popular with every marketing automation technology provider who uses to help explain a fundamental problem: how potentially good leads leak out of the demand generation process and how marketers must then spend more time, effort, and money recapturing them and putting these opportunities back in the sales pipeline. Which begs the question, “What am I really getting for my marketing dollar if some portion of the demand generation activity gets wasted?”

A CMO study sponsored by IBM last year found that, by 2015, most marketing departments will measure success using return on investment (ROI) as the primary metric. Most CMOs, however, struggle to demonstrate marketing’s ROI in a reliable way. Why? Because we haven’t instilled measurement discipline in marketing — or the technology, process, and automation to back it up. Since John Wannamaker turned his famous phrase about advertising, marketers have taken the easy way out by assuming much of marketing can’t be measured in a meaningful way.

Moneyball: The Art of Winning an Unfair Game (ISBN 0-393-05765-8) by Michael Lewis (2003)

But is the idea of measuring what matters in marketing that unattainable?  Recently, I joined Bonnie Crater, CEO of Full Circle CRM (a start up firm I advise), in a conversation about why it’s important to plug a leaky demand generation process. Bonnie drew a great analogy to the book Moneyball: The Art of Winning an Unfair Game by Michael Lewis, which details Oakland Athletic general manager, Billy Beane’s focus on an analytical, evidence-based approach to assembling a competitive baseball team, despite Oakland’s disadvantaged revenue situation.

Like putting together a championship sports program, marketing teams must run a broad range of programs from advertising, public relations, and social media campaigns to lead nurturing and customer engagement programs. And they must do all of this with shrinking budgets and resources, against competitors who seemingly always have more (like the New York Yankees who brought in 3X the revenue when compared to the A’s).  Showing how each of these programs contributes to the business requires a way to track every marketing generated response without overstating or distorting the results.

Using a response-based solution to automate this process helps level the playing field by allowing marketers to track, differentiate and report on the ROI of each program — and to connect multiple program touches to the people in the account where opportunities are developing. With response-centric intelligence, marketing executives can better optimize their portfolio and drive demand more efficiently. Automation allows marketers to be more like Billy Beane and the Oakland A’s, where you can use statistics and evidence to figure out which marketing tactics to “draft” and how best to put the lineup together.

Check out Bonnie and my conversation about what it takes to move to response-based marketing and see why marketing automation can help you get there.

Why Doesn’t Marketing Automation Impact the Business?

Photo courtesy of Full Circle CRM and iStock.

Earlier this month, Gartner published its Magic Quadrant for CRM Lead Management.  Naturally, Eloqua and Marketo commanded top spots in the upper right quadrant. But a cluster of really big companies look poised to close in on them from the lower left. So marketing automation – in particular lead management — looks pretty hot. Right?

I’m not so sure.  In this report, I was struck by the second sentence in Gartner’s opening summary, which said:

Impact on revenue generation is high and satisfaction with vendors is generally strong, but organizational alignment issues continue to reduce potential impact.”

Reduce potential impact.  Ouch.  Not good.

But which organizational alignment issues does Gartner mean?  Inside the vendors studied?  No, I think Gartner is referring to organizational issues between sales and marketing

Despite growth in market size, vendor offering sophistication, and customer interest, marketing automation has yet to reach that tipping point where marketing operations (who manages automation tools and directs campaign execution) stands on equal footing to brand, PR, product promotion, collateral development and sponsorships.  Even steadfast marketing automation practitioners still suffer from fundamental concerns about how well their systems pay off – especially when marketing metrics and sales numbers don’t line up. 

I hear many marketing execs ask the following questions, which – to my mind – are symptomatic of deeper problems in the automation world perpetuated by the chronic tension between marketing activity and sales results:

  • Which campaigns actually had the most impact on deals? Which drove the most sales activity and follow up that, in turn, drove more deals?
  • How can I demonstrate Marketing’s contribution and influence on revenue? And show the executive team that money spent in Marketing is more effective at moving the top line than hiring more salespeople?
  • How can we generate more pipeline/opportunity from each campaign?  Where should I invest to do this?
  • Why don’t my reports match what Sales has in its pipeline or forecasts? Why am I always defending Marketing metrics as a result?
  • What really happened to all those leads I generated last year? What percentage went into the pipeline?  Became deals? Are still active? Require more nurturing to re-engage? Why can’t we track sales activity on a per contact basis, instead of opportunity or lead?

These questions, and others like them, speak to the continuing inability to prove and improve Marketing’s contribution to the business.  To use this technology to really get to the facts and levers that move the business — and to stand on equal footing with Sales.

Because of my longstanding interest in demand management - and the people, process and technology issues that arise when marketers undertake automation efforts – I was intrigued when a friend told me about a new business she had started to help answer these questions. As a former CMO in large and small companies, she felt these pains acutely and believes marketing execs need something more to help them understand what’s happening with campaigns, make sure marketing data adds up, drive more revenue, and plan with confidence.

I was also very honored when she asked me to join her company’s advisory board to help her shape its future.  I worked with CEO Bonnie Crater at a company called Stratify (now part of Iron Mountain) in 2000 and 2001, and am pleased to become one of her firm’s advisors.

In future blog posts, I plan to share what I’m learning about marketing automation by working with Bonnie and her company. And shed some light on the best practices that answer the questions that will move automation and operations from the marketing back office into the forefront of the business.

What Major Account Sales Wants from Marketing

Leads: The Center of the Sales and Marketing Disconnect

You’ve heard this story hundreds of times.

You’ve probably lived through similar situations at some time in your marketing career. I’m talking about the ages-old argument between marketing and sales.  The conversation goes something like this:

  • Marketing wants to know “what did you do with those leads we generated from <fill in the blank event or activity>?”
  • To which Sales replies, “What leads?  Oh, those leads were terrible — send us better ones.”

Despite great advances in demand management and marketing automation – where marketers can use technology to target, engage, educate, and nurture prospects long before sales gets involved – the process of developing leads has yet to change fundamentally the natural tension between those who create market awareness and interest and those who turn that desire into deals.

This week I had the occasion to attend the Marketing Leadership Board Meeting, sponsored by the IDC CMO Advisory service.  The first item on the agenda was a “voice of the sales person” session that we could have continued all day.  Held jointly with the Sales Advisory service, this panel included front line sellers from top tech firms here in Silicon Valley. We’re talking enterprise sales — folks who manage one or two major accounts that create millions of dollars in revenue each year.  This friendly discussion was intended to give marketing counterparts some perspective and feedback on how to best impact sales’ productivity and effectiveness. What resulted was some very pointed commentary that set many of the marketing operations folks in the room back on their heels.

What does marketing do to really annoy those who manage major account relationships? Here’s my paraphrased synopsis of the key points made:

1) Sales builds key relationships and marketing messes them up. Every one of these sales people felt that it was Sales’ job to develop and maintain executive relationships at key accounts.  When marketing sends unsolicited communication — that is either off-topic, redundant, or too frequent — this interferes with their ability to keep the executive-level conversations moving forward. As a result, Sales is reluctant or unwilling to share contacts with marketing so they squirrel their most important information away on smartphones and personal databases.

2) Most marketing-generated leads are still poorly qualified. Even though they agreed that it can be helpful — from an awareness and credibility perspective — to communicate with contacts outside those involved in the current deal, these sales execs believe they hold deep insight into what makes buyers tick and that marketing should just butt out of these conversations. Generating net-new leads, and asking for timely follow up, simply takes too much time away from persuading their primary decision makers.

3) Marketing helps most when it makes content look snappy and throws a great party. Executive events, sponsorships, polishing RFPs and oral presentations, and dinners at nice restaurants provide great opportunities for sales to meet with top-level clients and prospects face to face. Marketing can help put that best foot forward (as I did with the recent Xerox TEDMED sponsorship). Beyond that, Sales doesn’t see much value in the advertising, direct mail, online content, or social interaction that Marketing often leads.

So what’s a dedicated marketer to do?  Throw you arms up in frustration?  Resort to the “oh boys will be boys” attitude of marketing in the face of direct, major account sales?

No, I think if you can’t beat them, it’s time to join them.  But in a very specific way.  Marketing must work to reinforce its purpose as the revenue generation engine of the company.  In building demand ahead of the pipeline.  If major account sales doesn’t yet appreciate that Marketing can help to drive the business in this manner, then it’s time to:

1) Find the parts of the business that can benefit from qualified lead generation. OK, major accounts may not (yet) see the benefit of marketing communication directed at the parts of the account that don’t yet know about your company and its products and services.  So work with the new logo/business development folks.  Channel partners are always hungry for net-new lead opportunities.  Look for small teams offering specific solutions or addressing specific markets (like healthcare or higher education.)  Showing that marketing can have an impact is the primary goal.  And major accounts may not be the first place to start.

2) Put sales in control of the demand generation process — in their accounts.  Many refer to this as account-based marketing, but the guiding principle is the same – develop demand generation and customer communication programs that target a specific audience.  Whether industry or role focused, programs that progress a buyer through a specific set of educational or business problem resolution steps can help sales people attract the interest of new buyers by delivering interesting, relevant content instead of promotional messages.

3) Double down on marketing/business centric metrics. The best way to demonstrate that marketing can truly help sales develop new opportunities or progress current deals is to measure your impact on the pipeline and the business. Marketing dashboards, reports, and portals that reflect the same business issues that Sales cares about it the way to start.

Will marketing and sales ever see eye-to-eye with sales?  I see many smaller to mid-size companies achieve this goal today.  But large, enterprise firms — with a long history of sales-centric operations, direct account coverage models, and professional sales processes — will take a longer time to develop this appreciation.

A Revenue Marketer’s Journey

You busy this February 23, at 1 pm ET?  I hope you can spare a few and join me for my first (and hopefully not only) appearance on WRMR – Revenue Marketer Radio.

What is WRMR? 

Debbie Qaqish Host Revenue Marketer Radio

It’s the call letters for a virtual radio station.  Actually, it an online radio show sponsored by friends of mine at the Pedowitz Group – one of the up and coming demand generation agencies that help marketers build lead generation and nurturing programs that convert a larger number of prospects to opportunities and turn more qualified leads into sales pipeline.

I’ve know Jeff Pedowitz for about as long as I’ve been active in the lead management automation field. We met when he ran professional services at Eloqua. His business partner, Debbie Qagish, I’ve come to know since and found her to be one of the most dynamic and outspoken advocates for professionally generating and managing demand as a core marketing function. Together they have built a fast-growing, thriving business and live in the world of demand management daily.

Debbie invited me to join her for a little tête-à-tête on how I came to be a Revenue Marketer.  Or at least how I found myself on the journey to become one. 

And it is a journey.  A long one.

According to Debbie, the journey to Revenue Marketing nirvana begins by recognizing that marketing activity – outreach to prospective clients with educational and informational offers coupled with good inbound visibility and relevant content delivery — helps to speed the sales process along.  Just like with any problem, recognizing that you have one is the first stage.

The second part of the journey she calls Lead Generation where marketers begin to devise programs — and use some type of technology, typically an email service provider or ESP system — to help generate leads and deliver them to sales. Qualified leads, not just those fished out of a bowl at a tradeshow.  In the Lead Generation stage, marketers measure progress in terms like open rates, click through rates, and registrations – simple activities that correlate loosely to buyer interest.

It’s a big jump from Lead Generation to the next phase: Demand Generation.

Marketers in the Demand Generation phase graduate to higher levels of automation and campaign sophistication.  They use marketing automation tools integrated together with a CRM system. (This also implies some rigorous use of the CRM system by sales and sales management for the purpose of managing accounts and tracking pipeline progress. — More on this if you come listen to the show.) They learn to measure marketing impact in terms like Marketing Qualified Leads, lead-to-acceptance rates, and pipeline value generated. In this stage, the marketer can begin to demonstrate a direct impact on revenue without getting laughed out of the room by sales.

The ultimate stage defines the whole process – Revenue Marketing.  In this phase marketing programs, processes and results earn the RPS seal of approval, where RPS stands for Repeatable, Predictable, and Sustainable. (Sounds a lot like the words my buddy Sean Geehan uses in his B2B Executive Handbook. But I digress.)

On Thursday, I’ll share some of my hard-won insights into what it takes to get started on the journey to becoming a revenue marketer at a large, multi-billion dollar enterprise with a highly-recognizable brand and a long history of sales management best practices. I plan to share a bit about my role in industry marketing and how this led to the start of my revenue marketing journey.  How my team and I adopted marketing technology to drive revenue. And what makes Revenue Marketing at a large, global, diverse enterprise — with many long-standing sales traditions — different than RM at smaller, younger firms.

The goal of our talk show segment is to help pave the way on your road to becoming an elite Revenue Marketer and to make your journey smoother — with less bumps and potholes.  If you can’t make this date and time, don’t worry, BlogTalkRadio records the session for you to access on demand.  Check it out when you can.  Or you can download them from iTunes.

(Full disclosure: This post is not an ad for the Pedowitz Group. I am appearing on the show as a favor to Debbie and to boost my personal brand on this topic.  I receive no compensation.  Although she did buy me a drink a couple of times…)

Successes and Shortfalls of Marketing Technology: As Shared with the Milwaukee BMA

Xerox Document Services - Example of Thought Leadership on Sustainability

From social media to sales enablement, I have found new marketing technologies are abundant, often replacing established tools in the marketing programs and operations toolbox.  In my relatively brief time here at Xerox Document Services, we’ve enjoyed the opportunity — and challenge — of adopting a variety of new technologies with a mix of successes and shortfalls.

On November 10, I had the honor of delivering the keynote presentation to the Milwaukee chapter of the BMA. (The BMA is an organization I shamelessly plug to all B2B marketers.) I shared a few lessons that we’ve learned rolling out social media, lead management automation, and guided selling tools in our professional services organization where sales coverage runs the gamut from geography to industry.

It was a frank recounting of the challenges and problems many marketers face with new technology adoption across a range of programs, campaigns, and operations. It was the “practical experience” view to the perspective  that Debbie Qaquish, Chief Revenue Officer of the Pedowitz Group, shared on how revenue marketers are changing the landscape of the industry through lead management automation. 

You can find the presentation on the Milwaukee BMA site, scroll to the bottom as the presentation is the last one featured on this page.  In it I talk about:

1) The state of B2B marketing and how the explosion of online tactics has made it harder for marketing to escape the execution treadmill and demonstrate its true value to the business.

2) How Xerox Document Services uses an online destination and social media to share thought leading perspectives from some of our key executives.  On this site, we talk about sustainability, change management, transforming enterprise marketing, innovation, and the future of documents.  Topics completely unrelated to copiers and printing.

3) Demand generation and lead management: how we use industry experts and clear, specific targeting to develop a perspective on key issues — like the future of the insurance industry — and share these with current clients and prospects. And how we keep the conversation going.

4) A cautionary note about guided selling and sales enablement and how the most exciting new technologies may be a bit much for your sales people to digest in one swallow.  Instead start with something they know (powerpoint slides) and give them a tool that enhances their effectiveness and professionalism when presenting in front of clients.

I also shared the following lessons with the 40 or so BMA members and guests who joined us for dinner and the evening presentation:

  • We are never finished.  Technology makes many new marketing approaches possible, but you have to keep feeding the machine.
  • Choose carefully, understand impact/risks of the new technology approaches you want to try.
  • Get inside your business financials to select metrics. If your programs and technology don’t show results in the language of business, you will fail to gain support.
  • Partner with sales, but gain senior management support. If the “big boss” doesn’t demonstrate both interest in and commitment to your implementations, then the road to success will be long and difficult.
  • Focus on audience and objectives first, the rest will follow. This is the POST principle.
  • People, process, and change management are more important than technology. Technology for technology’s sake is never a good thing.
  • Content generation is biggest success factor and hurdle. Figure out how to keep the content coming.
  • Use reporting to improve marketing, not just “prove” it.
  • Don’t be afraid to fail.

If you can relate to the contents in the presentation, let me know how.  Also, join your local chapter of the BMA. It’s a wonderful organization that I know helps to improve the business marketing profession.

Three Views on Marketing Automation – Focus Experts and MAI

Unquestionably there are many ideas and theories on marketing automation and the automation industry. Today the Marketing Automation Institute sponsored a Focus roundtable discussion that examined three views of marketing automation through the eyes of an analyst, a customer and a vendor.  And I got to be the customer instead of the analyst this time!

Carlos Hidalgo, CEO of the Annuitas Group and Executive Director of the Marketing Automation Institute, asked me to join some folks I haven’t spoken with in a while — Jeff Erramouspe, President of Manticore Technologies sand David Raab, long-time marketing automation technology and market analyst — for a conversation about the marketing automation industry, where it’s heading, how companies use lead management technology, and what to do to get more value from value from automation.

You can find the full recording and Twitter stream here.

Some of the questions we tackled — well, that I tackled – include:

1) Moving from analyst to practioner, what do I see at Xerox as some of the driving factors behind the push for automation?
(A growing profusion of marketing approaches and little consensus about what really works to drive demand. Therefore, the need to measure and automate marketing to better demonstrate its impact on the business.)

2) What are some of the ways an organization can use automation to reach buyers besides using it as an email engine
(I think it’s all about finding new ways to reach buyers outside of email — syndication of content to industry and association Web sites that link back to a landing page, publishing YouTube videos, starting a Facebook fan page, developing a community destination outside of your Web site are but a few examples.)

3) Of people, process and content, which one trumps the others — or all they all equally important — when it comes to successful automation? (Depends on where you are in the adoption lifecycle. Marketers starting out talk more about technology and skills their key needs. But more mature practioners point to content development as the gating item to success.)

Want to hear more?  Visit the site.  Listen to the recording. And share your views
UPDATE! — To hear the Sales’ view of marketing automation — sign up now for the November 10 Focus/MAI Roundtable.


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