This is the last blog in our 3-blog series on aligning sales and marketing, with the previous blog having started getting into the issues around executive and sales and marketing buy-in into the shift to ABM, as well as how to drive needed cultural changes into the organization. I often say that pipeline analytics is an organization’s equivalent to what free press represents for a democracy. Ultimately, it’s about being data-driven vs. being emotional, hierarchical, or political.

That’s a deep, profound cultural shift that benefits from starting with alignment around the question of “what are we solving for?”. This third blog addresses that issue and more.

3) Agree on common measurements and analytics:

• • Exec staff, sales and marketing all need to agree on a common pipeline definition: What are the pipeline stages everyone agrees to use from raw lead to close and post-sale?
    • A typical lead and sales pipeline might look like this:
      1. Raw lead (i.e. a name or an IP address if it’s an online lead)
      2. Lead (complete information, they have been identified)
      3. Marketing Qualified Lead (“MQL”; the lead has a minimum score)
      4. Sales Qualified Lead (“SQL”; a lead that is deemed ready for sales)
      5. Sales Accepted Lead (“SAL”; a lead that a rep has accepted and has converted to an opportunity within the CRM system)
      6. Developing (sales has contacted opportunity, established need)
      7. Proposing (sales is formulating a proposal for the opportunity)
      8. Negotiating (sales is in contract negotiations with the prospect)
      9. Closed Won (the deal was won)
      10. Closed Lost (the deal was lost)
    • Measurements then are what percentage of leads progresses from one stage to the next in the pipeline, what percentage gets returned to nurturing or to a prior stage, and how fast are the conversions happening. For example, how quickly is a typical lead moving from one stage to the next. The complexity then starts when these statistics need to be generated for all marketing campaigns, lead sources, sales reps, territories, segments, and so on, to ensure sources of slowdown or friction are constantly eliminated, and patterns of rapid potential growth are identified.
  • Throughout these pipeline stages, different organizations touch leads. The handoffs between these organizations need to be precisely defined in terms of desired quantities and lead quality.
    • Getting these handoff criteria right is crucially important if the ABM system is to function smoothly. To illustrate how complex things can get, these organizations could typically be involved in owning / managing the above 10 stages:
      1. Marketing Operations – Raw lead
      2. Marketing – Lead, MQL, SQL
      3. Sales – SAL
      4. Sales, SEs – Developing, Proposing, Negotiating, Closed Won
      5. Customer Success – Closed Won, Closed Lost
    • A crucially important handoff is from marketing to sales. This often becomes an emotional issue because sales reps bet their livelihood on the leads that marketing generates for them, and in turn marketing / sales development gets paid by the number of leads that sales accepts. We have always made it a practice to put a heavy emphasis on marketing producing the SALs, i.e. leads that sales is willing to accept. This breeds a lead quality consciousness that if marketing were to get paid on SQLs (i.e. the leads they submit to sales, be they accepted or not) would not be there. We always train our demand generation teams that supply sales with lead flow to ensure they understand that we reward success (i.e. SALs) and not just effort (i.e. SQLs).

4) Jointly work thought leadership and compelling, differentiated content and sales narratives:

• • Technology startups are founded to disrupt existing sectors. More and more this has become the Silicon Valley’s raison d’être, which for B2B startups means that they must compellingly explain why they do what they do better than anyone else in concise, easy to understand language. Getting their messaging right is non-trivial and requires a lot of understanding of the marketplace, the competition, and a good sense for what not only is logically defensible but also emotionally compelling. We have found it useful when all parties involved in external communications collaborate on how best to craft the associated narratives.
  • The sales team typically has a keen understanding of what sells today, what customers are looking for, and often have become masters at knowing how to sell “what’s on the truck” now (i.e. the available offerings). Marketing, on the other hand, often views the market more strategically, looking at competitive differentiation, what the analysts say, and so forth, and thus often has more of a sense of “the larger story”. The overall messaging benefits when both, sales and marketing collaborate constructively on the formulation of a compelling “why us” story.

5) Agree and execute on a joint events strategy:

• • Finally, marketing and sales collaborate on a joint approach to maximizing the lead generation potential of events like tradeshows, public speaking events, and conferences where the startup can interact with buyers and influencers. Attending events, especially if there is a booth to be set up and manned, is an expensive proposition and thus maximizing the leads developed from events is key to getting a good ROI out of the events.
  • However, this requires the marketing team to closely work with sales who usually staffs the booth, and who meets with prospects. So, both organizations need to cooperate on which events the company should attend at what funding level, who goes where, which event formats work best, and who staffs the booth.

If these five conditions are fulfilled and everyone works together, then ABM can be a work of art. The upsides are a large volume of high-quality leads and lower cost pipeline, and after the initial investments the ROI is compelling. We have seen the “marketing yield” (i.e. $ pipeline generated per $ of non-personnel marketing spend) go from 3X to 11X and higher once ABM was implemented.

However, there also are potential downsides that need to be managed: An ABM system is more complex and takes time to ramp up. Targetable segments need to be precisely identified, and targeted with content and contacts they find compelling, then those prospects need to be nurtured with content. Systems need to be implemented, new content and artifacts created, and so on.

So, compared to, say, a tele-sales cold calling operation, an ABM system will not produce leads as quickly. But, within 6 to 9 months, depending on the size of the operation, it will outperform those more traditional go-to-market approaches, and will do so more cost-effectively. At one security company, we saw costs per qualified lead and per deal decline by 36% and 67% respectively over the first twelve months of the program, while increasing quarterly output of new business deals by 40%.

For anyone interested in further reading about Account Based Marketing, here are some additional links:

• https://en.wikipedia.org/wiki/Account-based_marketing
• http://www.heinzmarketing.com/2016/07/lead-based-marketing-vs-account-based-marketing-heinz-marketing
• http://www.heinzmarketing.com/2016/05/is-abm-right-for-your-business
• http://www.huffingtonpost.com/vala-afshar/accountbased-marketing-ma_b_10004668.html
• https://business.linkedin.com/marketing-solutions/blog/linkedin-b2b-marketing/2016/what-is-account-based-marketing–10-definitions-from-the-experts