I had a great conversation the other week with Justin Gray, CEO & Chief Marketing Evangelist of LeadMD – a marketing consulting firm that helps Marketo and Salesforce customers increase the effectiveness of their tech investments and marketing operations.
This conversation led to a topic that I find very interesting, but seldom gets much attention: The extent to which marketing can be an actual revenue forecasting entity. Sure, we all glibly talk like it can and will, but it still seems a long way off and few people are discussing the specific challenges impeding this goal. But we’ll never conquer these obstacles unless we fully understand them. Justin clearly had no problem talking about the challenges to marketing’s quest to become a revenue forecaster, so I invited him to share his perspective in an interview.
David – No one denies that marketing’s accountability has increased substantially over the last few years. The extent of such accountability, however, is debated, specifically regarding whether marketing is capable of becoming a true revenue forecasting machine. What’s your take on this conversation?
Justin – When you talk about the evolution of marketing, you see a huge hockey stick on the last decade and even more so in the last five years. Some of this arose out of need. When the housing bubble of 2008 burst it had a significant effect on how marketing was viewed. No longer were the expense-laden budgets of marketing and advertising assured, and across the board we saw sweeping, and deserved, pull-back in spend.
The other big influence is technology. As we’ve seen, there’s been much innovation in B2B marketing, both in the terms of functionality and also in the decrease in runway required to implement new solutions. So, we’ve experienced the perfect storm of sorts as we have all this great, lightweight technology that’s also economical and easy to buy.
The kicker (and there’s always a kicker) is that the core messaging used by vendors to sell software to marketers was that, through these new tools, marketing could own revenue! Not just net new leads, which is what most marketers were content to base quotas on for the first half of the decade; marketing wanted more, they wanted to take a seat at the revenue table.
This all sounds well and good, but up until this point it simply hasn’t been the case – in fact, far from it. In actuality marketing often loves to pull out the “get out of jail free card,” commonly summed up in one key phrase: "Marketing doesn’t control that.” You hear it all the time when referring to sales-dependent items like opportunity pipeline or closed revenue.
"Marketing often loves to pull out the 'get out of jail free card,' commonly summed up in one key phrase: 'Marketing doesn’t control that.'"
Many of the solutions that marketing has been quick to adopt, such as marketing automation, REQUIRE that marketing participate in these scary areas of the funnel. They require that marketing acts more like sales. That’s a scary place to be; and like many areas of business, we see a lot more failure than we do success. Really strong innovative marketers and their teams are making this new technology stack work for them, but for most, the stack is crumbling.
What causes these stacks to crumble? In other words, what roadblocks do you see hindering marketing organizations from fully capitalizing on new opportunities to become revenue forecasting machines?
One simple area – skillset. The skillset required of today’s marketing teams is almost comical considering what marketing was a heartbeat ago. Today more than ever, if you’ve been in marketing for a great deal of time, you actually have a disadvantage in contrast to your newer peers. We’re seeing the demand generation manager out pace VPs in terms of career path and skillset demand.
It’s an exciting time to be an early adopter. Businesses need to focus squarely on education and training as well as building teams around the demanding skillsets needed to run modern marketing platforms. When you take a platform like Marketo and put it in the hands of an old batch-and-blast dinosaur, guess what, they’ll use it as a batch-and-blast tool. When you enable marketing automation with conversational content, technical acumen, marketing innovation and great user experience, you get engagement.
"When you take a platform like Marketo and put it in the hands of an old batch-and-blast dinosaur, guess what, they’ll use it as a batch-and-blast tool."
The last piece of the puzzle is sales acumen and understanding. TOPO recently poled marketers and found that the fastest growing B2B marketing area is the inside sales team, the BDR. 70% of B2B orgs have a BDR team whose job it is to qualify inbound demand from marketing. They also found that less than 7% of all BDR teams were managed by marketing. The marketers who are managing these teams are the rockstars – everyone else is being handed their hat and the message is squarely, “Thanks Mr./Mrs. Marketer – we’ll take it from here.” Marketers have to understand sales to be relevant today.
In marketing’s quest to become a predictable source of revenue, do you see a framework of success developing?
I see great marketers starting to emerge like rockstars. They’re not only building repeatable processes at scale, they’re also sharing that structure with anyone who will listen. I’ve seen over two dozen marketers literally walk through their technology stack, their team structure, their training and retention methodologies, even their sales qualification and iteration processes in the last two months alone. Why? It’s not because they have nothing better to do – it’s because they’re looking to create consistency and develop a framework.
There’s so much noise out there today, enough white papers to create a digital landfill overflow. Enough great new software toys emerge every day and then die or go unused that the carcasses litter the path. Great marketers are looking at this bubble and saying, “We have to weave these tools together successfully the first time, because with this fragile environment, we aren’t going to get many more chances.” A framework is just starting to develop and it absolutely must be one driven by data. The “feel” of marketing is not the future.
Marketers fundamentally want relative recommendations – they want to know how they stack up to other marketers facing the same challenges they are and in the same spaces they are. Those fundamental benchmarks not only provide a starting point but we can translate them directly to tactics that stimulate change. The funnel is a great place to start as it has so much executive visibility so LeadMD has started benchmarking marketing automation users at a pretty impressive clip – we benchmark 1000+ B2B organizations each quarter – and out of that comes a roadmap to success driven by data based prescription.
Where should marketing execs begin? What role do managers and directors have?
Executives have to begin by enabling their teams. I’ve seen VPs and CMOs tout that they’re building revenue-focused teams and then have zero contribution to content pipeline. If you think you’re going to succeed by “telling” your team what to do, you are flat out wrong. You have to first start by doing. Today’s CMO is the lead content creator, they are speaking, they’re blogging, they’re feeding the marketing engine.
"We need leaders who have come up through the trenches and understand the tactics that will drive success."
Leaders are also beginning to better understand the role of marketing operations and respecting it. Your marketing ops team has to know the tactics to implement, but they also have to be strategic thinkers; they have to understand the purpose of the program and how it will succeed.
Finally leadership has to blaze a path to sales. They must require that the two teams interact daily and learn from each other. Today’s marketers are on sales calls and in presentations, and today’s sales professionals are tweeting prospects content and managing nurture campaigns. And leaders are empowering both teams to put these strategies into effective action.
Long gone are the days of the hands-off leader. The same way that engineers have forged a straight-line path to the C suite, marketing must be following the same course, because fundamentally, we need leaders who have come up through the trenches and understand the tactics that will drive success.
Justin Gray is CEO & Chief Marketing Evangelist
Built around a group of early Marketo customers, LeadMD was formed in 2009 with the vision of being a little different. The full service agency was built on the dream of igniting a fire around marketing, fueled by bridging the gap between strategy and tactics. The result is a true Marketing-as-a-Service offering, which has become the benchmark of excellence and a Preferred Service Partner for both Marketo and Salesforce.com. Mr. Gray has emerged as a strong voice for demand generation, value-based marketing and conversational best practices. As a recognized speaker, Justin has been published over 300 times in industry publications. Meanwhile, his Blog, The Marketing Evangelist is one of the top marketing blogs in the marketing automation the space.