The nitty-gritty of aligning marketing and sales


Zorian RotenbergZorian Rotenberg is the Vice President of Marketing at InsightSquared, which has developed an easy-to-use marketing and sales analytics SaaS product.

Zorian has previously worked at other software companies and helped grow them over 100 percent yearly, some growing in a few years to $100 million in sales, and is working on doing the same at InsightSquared. My interviewer with Zorian originally appeared on the IDG Connect blog.

Louis: You’ve said that at InsightSquared and other companies that you’ve worked at that the typical sale was between $2,000 and $10,000. Before we get into aligning marketing and sales, can you just describe the general sales approach that was used at those companies?

Zorian: The sales approach is inside sales or over-the-phone sales. And the idea is to focus on a low-cost customer acquisition strategy. So the strategy is to build a very effective and efficient inside sales team that works very closely with marketing to produce high growth in sales but at a very cost-efficient model for customer acquisition.

Louis: So, do sales and marketing at the beginning work on defining market segments, buyer profiles, pricing, the go-to-market strategy, other matters? How is that worked out?

Zorian: Yes. So, in most cases it’s an iterative, collaborative effort where you need sales to do the hand-to-hand combat and to work with marketing to analyze the findings and go back and iterate on what works and what doesn’t, and how to adjust and enhance the go-to-market. In most organizations it’s an iterative, closely-aligned process.

Louis: How are the lists generated? Are those created by marketing? Or are they pre-qualified in some way? Or is it through inbound marketing? Or are they bought? Or is it a combination of all of them? Who are you calling and how are you getting the lists together?

Zorian: We basically have marketing generating inbound leads. Additionally, we have a sales prospecting team to complement inbound marketing. We have four different lead sources but the two that drive the most business are 70% inbound marketing and 30% outbound prospecting.

Louis: So the outbound callers actually do their own research and pre-qualifying before they call someone. They’re not given a list by marketing or by sales.

Zorian: Yes, the outbound callers in most cases just do their own research. But, marketing could also help the outbound callers to help them improve their conversions. So, for example, you can do different campaigns. One campaign I call “digging for gold”, which is people who come to the website and you just see an anonymous visitor but you can see the company name. You know someone from the company was visiting the website. They may not know their name but you know the company’s IP from your marketing automation product. There are many other tactics that you can employ to help the outbound team.

Louis: So, for the inbound team, at what point do you consider a lead to be sufficiently qualified that you would pass it over to sales to be called?

Zorian: We have lead scoring, and when a lead reaches a specific threshold that it’s a hot lead, a marketing qualified lead, then the inbound sales reps get it.

Louis: So that’s automatically sent over by the marketing automation system when it hits a certain threshold?

Zorian: That’s right. And if at any time sales says “we don’t have enough leads”, we can lower that lead score threshold so that more leads flow into the sales queues. We can raise the bar or lower the bar depending on how many leads sales need at any time. It’s not possible to generate really high scoring or sales-ready leads in high quantity so it’s always a balance between quantity and quality

Louis: What’s your expectation, if a lead comes in? You just tweeted a blog post about lead aging. When sales gets a lead that is qualified, how quickly should they be calling them?

Zorian: You need a service level agreement, an SLA, with sales. And when I say an SLA I mean people literally should write it out and draw a line in the sand on what marketing will provide not only in number of leads but in dollar value. This SLA should include the timing or when sales will call the high scoring leads and when they will call all other leads. A lot of disagreements can end when you have that in place. And it’s a continuous, iterative process. It can take some time to iterate and improve. But you basically have a service level agreement with sales that says, “We’re going to deliver to you X number of these types of leads, Y number of other types of leads. And for the first type which we’ll say is the high scoring ones, you have to call them within five minutes. There will be very few of these very high scoring leads but they’re the hot leads. Then there’s a second tranche that’s not as hot and sales agrees to call them within 30-60 minutes. And then there may be a third tranche for some companies and you can call them during the same day but certainly not right away.” So you have to show the order of priority and decide that the call is going to be based on that priority. You can’t tell sales that you have to call all of them in five minutes, because it’s a simple calculation that it’s impossible to do that. So you have to have an agreement around what’s possible and what’s not and have a mutual understanding.

Louis: I would assume a super-hot lead is someone who fills out a form that says, “Call me. I want to talk with you about buying this.”

Zorian: Yes, that’s definitely someone that you would call in the first five minutes. You should have a SLA around that.

Louis: Yes, I completely agree. I’ve worked with lots of companies over the years helping them with marketing, or selling them marketing services, and I’ve heard even from some big companies that people in marketing say that sales sometimes doesn’t follow up for a week or more, and it just is insanity.

Zorian: Yes. Absolutely. It happens all the time. And I think the reasons are two-fold. One, there’s no agreement on what a hot lead is. And there’s likely no SLA in the first place, because when you put a SLA in place it forces you to agree with sales on the definition of a “lead”. And the second reason is that most people are not able to measure or track leads and follow-ups well enough — if you’re not tracking it regularly, on a weekly basis or even a daily basis. You should have exception reports that are produced every night. We have a nightly report, and InsightSquared makes the product that does this report, that shows how many of our hot or marketing qualified leads are not being contacted by the sales team. And, for example, one time it showed a lot of leads weren’t being followed up on and it caused us to bring in another inbound SDR (sales development representative) and put him on the team, we doubled the team in a few weeks, because we realized that marketing was significantly outgrowing the capacity of the sales team, of the inbound sales team, to handle our leads. It’s a good problem – it’s a champagne problem, right?

Louis: Yes, that’s a good problem to have. So do you have goals around what percent of your leads are inbound leads and what percent are generated by sales teleprospecting?

Zorian: We don’t look at percentage of leads generated. We focus more on opportunities generated. In terms of leads, it’s not so important at a strategic level but only at a tactical level in marketing. Opportunities are what you attempt to close in any given selling period – it’s all the potential deals your sales reps are pursuing to close but only 10% to 30% of it will end up as won deals for most companies depending on the business, industry, sales process, etc. And, basically, we look at that. And roughly 60% of our opportunities are generated by the sales outbound prospecting team and 40% by marketing, but marketing opportunities convert at about a 20% win rate which is quite higher than the win rate on other sources. So while marketing produces fewer count of opportunities, those end up converting into about 70% of the deals, so fewer opportunities which drive a vast majority of closed deals.  And this makes sense because those folks who inbound are ones who already have an interest and we were able to catch them with lead generation or, as we like to call them, dragnet and other fish net strategies for catching leads.

Louis: Most of the calls aren’t going to be successful. Or many won’t. So how does the information flow back and forth from the sales team, whether they’re following up on outbound leads or they’re doing the teleprospecting, how does that information go back and forth with marketing either to refine your message or to enter people into nurture campaigns or other activities? Let’s say you get a slew of inbound leads and sales calls them, but not all of them are going to turn into actual opportunities. And then sales is doing their own teleprospecting and that’s going to have probably a lower percent even of success. So sales is, as you said, the ones doing hand-to-hand combat, the ones talking to people directly. How does what they find out get communicated to marketing and is there a feedback loop for refining messaging, refining qualified leads and so forth?

Zorian: Yes, we keep track of that in weekly meetings. And we also have centralized documents. For example, with lead scoring we can understand it. So if we say something is a hot lead and we give it a score of 100, for example, does sales agree that it’s a 100-point lead? And there’s a document that’s on the network in which they describe for us what the issues are so that we can them pick up on them and then in discussions and meetings we can dig deeper and we have a constant communication cycle on that. Every week one of our sales team members does an audit of opportunities and gives feedback on them. So we definitely look at that data. Most importantly, we have our own product which we use to track how many of our leads are being successfully contacted by sales, what are the opportunities being produced by marketing, which ones are working and which ones are not, and knowing that we can easily dig in and look at what sales is saying about them in Salesforce. And we have that communication on a regular basis: “Is this working? Is that working?” Marketing can give things to sales, but sales can come back and say this is working or this isn’t working and we can adjust it. We give it to them, and we can measure whether there are more opportunities created, what are the conversion rates, win rates on opportunities.

Louis: Why don’t you describe for me what InsightSquared is and what the tool is and how it gets used by companies.

Zorian: It’s a really incredible product. I say that because I ran global demand generation for a number of highly successful companies, but never had an ability to see the visual analysis of marketing performance from leads to campaigns to deals and all in just two or three clicks of the mouse button, to immediately show on my screen which campaigns are working, what are the conversions from leads to opportunities and opportunities to deals per campaign, or per lead source. Most marketers show lead flow to their CEO but the CEO does not care about leads, despite what everybody thinks. The truth is the CEO just cares about sales. And most marketers need to spend days analyzing their impact on sales while I can do that with InsightSquared in a few clicks of a mouse button. As Steve Jobs used to says, “it’s an insanely great product” and I hope everyone in marketing gets to try it to make their marketing much more effective and efficient too.

Louis: So where’s it pulling the data from?

Zorian: It’s pulling the data right out of your CRM. All of the most valuable data is in there. We use Salesforce as our CRM and actually Salesforce is an investor.

Louis: You mentioned about the lead aging report. Do you have a dashboard? What else are you looking at every day or every week?

Zorian: Yes, absolutely. So I look every day at my leads versus goals; on an operating level that’s important to me. Every week I report on how marketing has contributed to the pipeline. And for myself I analyze lead to opportunity and to deal conversions. I also look at other things like campaign reports and marketing cycles. How is the marketing cycle changing over time for different leads or campaigns? Are we doing better in converting leads to opportunities – that’s the marketing cycle — versus the sales cycle which is opportunity to deal conversion.

Louis: How important do you think brand building is compared to lead generation? Do you focus much of your budget and activities on brand building and awareness, or do you really focus on the lead generation?

Zorian: I would say that brand is very important. But branding is a derivative of lead generation in the SaaS startup world. For any start-up I think the key is to generate demand, and an overspill effect of demand generation is brand awareness. We don’t advertise in the traditional sense. But we still go to a few select conferences like Dreamforce which also has an effect on branding but I’m also cutting back on conferences because they’re not cost effective. They’re probably the worst form of lead generation and the highest cost per lead. And I’m coming up with other ways of getting the benefit of what a conference does but in a much higher ROI manner, and I’m going to launch some new strategies to do that.

Louis: For you, what would be the three or four top lead generation activities?

Zorian: It’s a lot of content marketing that’s the foundation of inbound marketing. Then conversion optimization. So the goal is to get found and then convert the leads on your website. We also have a focus on freeware. We have a couple free apps for people and when they download them we market to them.

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