Caution! Flammable Material!                       CMOs and Pipeline

Caution! Flammable Material! CMOs and Pipeline

Perhaps the most critical, and complicated mission for a B2B Chief Marketing Officer is pipeline generation and progression. This amorphous beast is filled with twists, challenges, conflicts of interest and ultimately, the most quantitative validation of a company’s marketing investment. Conventional wisdom dictates that any strong B2B marketing organization must deliver net-new customer leads to the business. Over the past decade with the rise of SaaS and subscription offerings … and with scaling companies looking to new products and adjacent markets to find new growth,  the net-new mission multiplies with opportunity progression, deal expansion and customer retention yields.

For a CMO, operating and thriving in a B2B go-to-market pipeline generation model can be very tricky indeed. The matrix of motivations and interdependencies to make it all hum along is quite complicated. Engineering and product organizations want new pipeline for new product entries. And when is a new release or a new product minimally viable? Are product and sales on the same page on that front? Sales organizations are looking for deal accelerators, not distraction or deal elongation often brought on by new product engagements, particularly when products aren’t ready for the bigtime.

Marketing is often in the middle of these interdepencies. I believe CMOs have a fantastic opportunity to broker improved transparency and greater alignment across engineer/product development and go-to-market organizations, which in turn can produce significantly improved pipeline quantity and quality. If you get caught up trying to please both “sides,” you’re setting yourself and your team up for disproportionate blame when the topline is struggling. Avoiding such requires a good deal of diplomacy, influence and conviction backed by data. 

But first, it’s important to recognize critical flare ups that if left alone, can prevent you from gaining permission to broker better go-to-market outcomes for your business. These flare up scenarios are certainly dependent on industry type, domain and GTM model, but I do believe there is enough evidence out there to declare these as commonly experienced. 

Flare up #1: Your quantitative livelihood is often at the mercy of a sales rep who actually creates that pipeline opportunity in your CRM. The quicker you understand this, and what makes your reps tick, the faster you’ll be designing activities tailored to them, not tossing over the wall to them. How are they compensated for existing versus new business? Does the technical selling community BELIEVE in a new product for which you are generating new opportunities? And from a macro perspective, how is your sales engine doing on rep attrition and replacement? Are there pockets or geos of weakness? Or worse, is there leadership turnover and sales-wide attrition? And in turn, what is marketing doing to help ramp up those new reps as they are hired?

Remedy: Rise above the mounds of data, and get personal. Now! 

I recall a rather tense discussion with a CEO. The topic was quality pipeline, and from a macro perspective, the data told us that we were in the “green.” But the underlying health of the quarter and outlook weren’t where we wanted it to be. I was pounding the proverbial table, begging my CEO to “look at the data!” He then stopped me in my tracks with the following quote: “Don’t fall prey to the insidious nature of averages.” Here is what he meant, and what compelled me to start spending my time differently. It all started with the atomic unit of the sales rep.

This means moving from the comfort of heavily relying on quantification with aggregated data to balancing your picture with specific, visceral qualification. I took a break from the heavy quant reports, picked up the phone, and connected with several sales reps. I asked a lot of questions about particularly large opportunities that were slipping. Why? I also explored deal flow, with smaller transactional opportunities. What factors were in play that either sped up or slowed down progress. And critically, what was marketing doing, or not doing, to help not hinder? 

Of course, there can be a risk here of serving the “squeaky wheel,” which may not represent broader truths. But in my experience, there are compelling platforms and tools that can help you scale and see trends emerging from specific evidence. For me, I lived on Clari, both for tops-down and bottoms-up insight on opportunities. And delivered an invaluable view into the daily lives and activities of our reps. So it was the old-fashioned pick up the phone action, married with the scale and targeting of, as the folks at Clari call it, revenue management.

I learned a great deal through these qualifications. I learned about the impact of over-aggressive roadmap marketing, where futures reached the customers’ eye and ears before earning the trust of our most impressive technical sellers. I discovered numerous examples of teams being forced to produce technical validations, many times over, where none existed centrally. And I quickly uncovered huge disconnects between marketing DG investments in new product areas, flying straight by sales teams who had neither the belief nor incentive to engage in what promised for them to be a longer sales cycle.

These learnings prompted actions, in deeper technical validation content, in DG investment decisions, and most critically, in marketing mix shifts that leaned into deal acceleration, vs heavy door openers. Macro data could provide clues, but only getting personal with your best reps yields the visceral, powerful examples to effect change and help improve pipeline performance. And nothing endears a sales organization to marketing like proving that you listen.

Flare up #2: Reams of Pipeline Data. Conflicting Conclusions. Disconnected Actions. 

This misalignment factor causes a tremendous amount of angst, awkward moments and outright frustration across B2B sales, marketing and partner organizations.  This is a classic example of how a major business output that traverses across multiple organizational functions can fall into siloed traps. It just takes one flare up issue to create a great deal of business turmoil

Here’s one: Sales reps don’t like to show the breadth of the pipeline, particularly when quotas are being negotiated, new territories are being set, and/or new segmentation is being rolled out. It’s hard to count the number of times either I, my teammate or another CMO I chat with has that panic moment: pipeline has fallen off of the proverbial cliff! I’ve learned to ask simple questions in response to this panic moment: Have rep quotas been set? Have new segmentation and account assignments been delayed? Is a region experiencing unusually high attrition?  While not a universal truth, these freak out moments, where pipeline numbers crash into materially anomalous trends, almost ALWAYS feature 1, 2 or all 3 of these alarm signals.

Remedy: Launch a Unified Pipeline War Room. 

Throughout my career and today in advisory and mentoring calls, I hear a lot about tough meetings, inevitably when topline is under pressure, where sales, marketing and finance leaders are not on the same page in diagnosing pipeline performance. Too often, there are different sets of data flying around, with as many or more different conclusions on what is causing softness and slowness. Tension, unfortunate finger pointing, and far too often overly simplified conclusions about how to address topline challenges, ranging from “hire more reps” to “spend more in DG.” 

Enter the pipeline war room. This entails bringing together your best and brightest data experts, critically across finance, sales and marketing operations. Bring in critical leaders across all three functions, and choose a ring leader who can serve as an effective arbiter of disagreement, debate and coalescence. Have this group run a true, high cadence, outcome-based operation, powered by the platform of SFDC, Clari and other tools of choice. Invest in the necessary development required in such platforms, so that the awful phrase “we are running blind because we need SFDC changes” is rarely or never uttered in a meeting. And most importantly, flex the data. 

Per the stealth pipeline behavior I cited above, model the anticipated magical growth and expansion of pipeline post-quota setting, and stop the tactical panics. Debate and coalesce around actions that must be taken across all GTM functions to address regional flare ups.  Define a committed roadmap of SFDC requirements that serve the most critical reporting and forecasting needs of the business, across functional boundaries. And ideally, move as one. Use this team as the quorum to debate the finer points of top line pressure cause and result. And save the bigger questions for the big room.

I’m certainly biased, but I think top marketing leaders, with exceptional diplomatic chops, can do very well taking on leadership of such a war room. But that can certainly require work and credibility building to gain permission for the seat. Marketing leaders need to be vocal, both with right-brain intuition and left-brain data on the pipeline topic. And they need to understand when to do so behind the scenes, and front stage in front of your peers. I’ll have more on this delicate balance in a future blog!

Flare up #3: First touch attribution won’t build your fan base, and neither will isolated lead goals… 

I say “first touch” attribution and lead quantity goals should never serve as a primary business metric for marketing,  considering today’s always on, digital B2B marketing mission, where sales cycles can last weeks or months, but interactions happen daily, even hourly. Each should remain an internal marketing team measurement for performance, but not a topline business metric. 

Nothing lands like a rotten tomato (splat!) like showing off killer “green light” first touch attribution and lead metrics in your CEO staff meetings if your overall pipeline metrics are yellow-to-red. Chances are, they won’t believe your numbers, and you lose credibility. It actually doesn’t matter if you’re right or wrong. It could be that perfectly primed leads are being left to die on the vine. But if so, a CMO needs to have those tough, diagnostic engagements together with their sales leaders. And I believe that needs to start with abandoning attribution as a primary pipeline metric. 

Remedy: Measure the Reality of B2B Engagement: Multi-Touch Rules. 

Getting new names, and getting them into the door is certainly a huge mission. But marketing organizations that obsess over WHO brought the lead in are far less interesting than those who are maniacal about a wholehearted, progressive approach, regardless of sourcing. Move ‘em in and move ‘em along, WITH the rep or partner, not in silo.  Measure that effect, and you are an interesting candidate for investment.

What does this take? It takes some hard work to refactor your systems of record to correlate opportunities with all “touches” across marketing and sales. It requires the classification of different touches with weighting that reflects reality. We all know this, but there are too many marketing practices out there who rank an eyeball on a retargeting ad as equal to participation in a technically rich, small group engagement. Fix this, and build a concept of a platinum, gold, silver or bronze opportunity, defined by the quality and frequency of marketing engagement. Understand the data and resulting trends that creates a Platinum opportunity that moves from lead to opportunity faster, expands more with cross sell and upsell, and closes faster relative to deal size. 

So then, what are the new primary business metrics for marketing that replace first-touch attribution and leads? I think it starts with a pipeline quality metric, proven by high quality marketing touches. If you are hitting the right opportunity at the right time with the right experience, that opportunity should be growing and/or closing bigger and faster. New business opportunities with quality marketing touches .. not just new logos but new buyers and budgets within accounts, should be another.  And marketing needs to lead the way to soften the ground for new product entries (see major qualifier below!).  

Pipeline velocity with and without marketing engagement. Pipeline expansion with and without. These are the conversations and perspectives that matter most to understand how marketing is making a difference, and whether or not to invest more.

This isn’t easy, and takes a tremendous amount of work and even cultural change across a marketing organization. But if done right, the conversation in the C-Suite moves from “who isn’t delivering enough pipeline across sales, marketing and partners?”, to a far more interesting view of how we are performing as parents in raising our pipeline from birth to graduation? It takes the proverbial village to raise our pipeline. Let’s measure that truth, and promote a community-based, not adversarial approach to doing so.

Flare up #4: “Where’s my New Product Pipeline?” 

Another common tension point I’ve seen play out: The desire to launch and ramp a new product runs into the cold, hard truth of the path of least resistancetypically means existing business, core products, and existing buyers. Forgive the obvious point, but any marketing effort that, in absence of mandate, incentive or belief, that bumps sellers off of that efficient path will at best be expensive and inefficient, and at worst doomed. 

This dynamic is a huge pressure point between product organizations and selling organizations as a company attempts to move from being a single product, to a multi-product company. And if you’re not paying attention, marketing will get slammed in the middle of it all. If a sales organization lacks compelling financial motivation to grab new business, with new products, marketing investment missioned toward that end will be doomed to low efficiency yields.

Remedy: Do NOT pass Go, do not spend $200, until… 

Resist temptation (or pleas, or commands…) to invest heavy time and resources into the new product until you’ve checked these critical boxes:

  1. Has your new product landed, not as shelfware (!!) but as production deployed at 3 to 5 (or more) of your best, most loyal customers who are willing to share their experience?
  2. Do your best and brightest technical sellers/sales engineers BELIEVE in your new product?
  3. Once you’ve achieved 1 and 2, have you thoroughly trained your GTM engine (reps, SEs, partners, etc) on who to target, how to compete and how to position and sell said new product?
  4. Here’s one that is almost NEVER this far down the sequence: Upon satisfactory fulfillment of 1, 2 and 3, Have you properly launched your new product to the market, complete with analyst validation, customer testimonial, web, and the brilliant press release and resulting press coverage?
  5. Can you identify who across your GTM engine has responsibility to sell the new product, based on bookings targets, quota and incentive?

There is a tremendous amount of “why” and “how” to each of these 5 steps. And that is actually what I will cover in far greater detail in my next blog!  This multi product transition definitely deserves its own real estate! Until then, I hope this discussion of pipeline flare ups and the role the CMO and marketing can play in avoiding such and thriving helps, or at least makes the reader think about a different perspective. 

Happy Pipeline Progression to All!

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