Friday, January 26, 2007

Collateral That Sales Really Uses: Take Two

Along with John Whiteside, I enjoyed Jonathan Kranz's article that provided a list of tips for building collateral that sales will really use, which appeared on Marketing Profs the other day. Anything that helps improve the fractious relationship between sales and marketing is for the good. We now what happens when those relationships get really out of hand: sales "wins" and marketing is put underneath the sales org. As a result, the strong marketers who know what marketing is really about up and quit (or get fired), leaving only those marketers willing to take orders - typically for tactical programs that are aimed at the target du jour.

Overall, the piece contains excellent advice.

John picked up on one point of exception he had with Jonathan's list; I'll offer another.

Jonathan writes about "making sales responsible for defining the target," proposing that you "bring the sales team to the table to define exactly what a qualified lead should be. Include factors such as industry, region, company size, titles, budget, purchasing timeframe, etc."

I'm am 100% in agreement with "bringing the sales team to the table", and getting everyone to agree on what a qualified lead is. And in 100% agreement with the notion that Know Thy Target is imperative if your campaign is going to be effective.

But, in my book, it's not up to sales to identify the targets. That's marketing's jobs. Yes, marketing can and should seek input from sales - they typically have a good idea of who buys and what's happening out there. But sales, by its very nature, is out for the short-term, opportunistic land grab, not out to build the long-term market. 

Once marketing has defined the big-picture landscape, and the company has agreed that this is the way to go, by all means invite sales to the table to talk about what sub-sections of the overall market to go after. This will definitely help eliminate the these leads suck" mentality we've all lived through.

One of the worst things that can happen in a company - and I've lived through it - is when marketing builds a strategy, and everyone at the executive level (including sales) seems to agree to it, but when it comes to execution, anything goes. In the company I'm thinking of - and John Whiteside can tell you I'm not making this up - our strategy was to target mid-market companies. There were a whole lot of reasons we'd made this decision (not the least of which was it was where all our customers were), and everyone who mattered seemed to give lip service to it (and I mean big, bo-toxed lip service, not thin lip service).

Marketing went off and began doing programs aimed at the target market.

Too bad sales wasn't interested. What they really wanted to do was pursue big game: Fortune 1000 companies, the "logos" that everyone knows, major dollar deals. Once in a blue moon, one of our big game hunters would end up bagging an elephant. But it was rare. And costly. The deals were big on the top line, but we usually had to make so many concessions to get them that they were unprofitable on the bottom line.

Mostly, we ended up putting all sorts of effort into the big game hunt and not winning the deal. We were a relatively small company that, in the big deals, was almost always going up against far larger, better know competitors with more dazzling product portfolios and track records - and they typically had an incumbent relationship with the big game/big name companies already.  In these big game hunts, it was as if we had a pop-gun and the competitors all have Uzis.

The problem never got resolved while I was there. The executive team - for whatever reason - just tended to ignore the "cognitive dissonance" between our explicit mid-market strategy and the pipeline reports that showed all these big deals.  I don't know why they never put two and two together and figured out that most of those pipeline entries were really pipedream entries.  Too busy celebrating the big glory wins, however rare and costly.

If marketing had sat down with sales and asked them to define their targets, they would have pointed us to the Fortune 1000 companies that they wanted to sell into. There was very little that marketing was going to do that would turn any "opportunities" we uncovered into anything more than wishful thinking. These "opportunities" were completely ill-suited for our company, and vice versa.

This impasse resulted in revenues that weren't what they should have been. And, naturally, bad feelings between marketing and sales.

So I'll got back to my exception to the Kranz Rules: It's marketing's job to define the market strategy for a company, it's sales job to execute that strategy, and it's executive management's job to enforce compliance (or get a new market strategy). 

5 comments:

John Whiteside said...

Good point, and as we were working together and lived through your example, one I wish I'd brought up.

I think you need to at least get sales to agree with the target. We did do that; you remember all those meetings, right? That at least gives you something to point back to ("Well, you agreed when we picked this target!")

Of course when things get to that level of fingerpointing, happy endings are unlikely..,

Cahill said...

A great addendum to a great original post...

Elephant Hunting syndrome is a big problem in tech. I've seen too many salesmen ignoring the $40k sure sells to go after multi-million dollar pie in the sky propsects.

We have met the enemy and he drives a porsche.

Mary Schmidt said...

John & Maureen,

Are you sure we've not worked together in some alternate universe? Been there, done that.

However, I found my sales team quickly aligned with the strategy when we compensated them on profitability of the deal. Of course, you also have to have top-down commitment to the strategy. CEOs are just as susceptible to (if not more so) to logo ego lust.

Maureen Rogers said...

Mark - As a matter of fact, the SVP of this particular sales team did, indeed, drive a Porsche or a BMW or something fast and bright red. (John - do you remember what he drove?) In fact, he almost ran me over with it one day speeding out of the parking lot - I guess he was after an elephant. The company actually picked up the tab for the car as part of his package. I don't think he ever made his numbers, because we never actually bagged any of those elephants...$40K deal? That would be like driving a $40K car? No way!

Mary - We absolutely must have worked together in some alternate universe. John and I were just talking about you earlier today and saying how you definitely would have been one of our crew. And BINGO on CEO lust for the logos. Our CEO would talk about his/our commitment to the mid-market, but then he'd salivate when we had the logo "opportunities."

John Whiteside said...

I don't remember the car but one of his underlings once told me that the big boss likes salespeople with "big houses and fast cars" because the big payments made them hungry.

These were more like $4K deals. Mary is right that the problem was alignment of sales and marketing compensation and models. Those deals needed to go through our much less highly paid inside sales person - but the field folks were snapping them up and running after them because, well, they were hungry.

In the case of my product these were low margin deals. We made money when Inside Sales closed them sitting at her desk, but not when we had to figure those big field sales salaries and commissions into the mix.

Interestingly, the inside sales person could close them faster, and at higher prices, than those slick and hungry field sales guys. Hmmm...