Cody Boyte, Head of Marketing at Jornaya, joins us for the latest episode of the Revenue Marketing Report and he means business, literally.
Listen to the report, or read on to learn about:
- Leveling Up How You Communicate
- Let’s Rally Around Revenue: How Marketing and Sales Scale Growth Together
- Get Started in Revenue Marketing — By Doing
Learn How Your Executives Think About Your Business
This is how your CEO, COO, CMO, and CFO are thinking about the business: How do I drive revenue, not for the sake of driving revenue, but because that revenue needs to translate into the business being worth more? Or, how do we drive toward profit to drive more value in the business?
So, how do you speak with the CxO when you have a Marketing need, or even just to give a general update? If you’re talking about leads, or website hits, or other vanity metrics, you’re actually making it hard for them to connect their metrics and their goals with yours. You know what that means: Less confidence and clarity; less money for your projects.
Take the example of buying a business. People buying or investing in a business only care about the relative enterprise value of the business. They don’t actually care about what’s going on inside of the business, except as due diligence to figure out how secure it is.
As a marketer, what you always need to be thinking about is: What are the things that drive value in my business? How do I drive value in that business?
(Hat tip to Adrian Slywotzky for his book, The Art of Profitability. Check it out if you want to know more about the different ways in which businesses make money.)
For some organizations, that may be bringing as many leads in the door as you can, as quickly as possible. For another, it might be to get someone in the door and keep them as a customer for as long as possible. Both require a different set of marketing tactics and goals, and an understanding of how the value of business is driven.
Leveling Up How You Communicate
To effectively communicate how you drive enterprise value, give these a shot:
- Let’s Stop Using Marketing Centric Terms. For example: Don’t talk about “lead scoring… or even engagement scoring”. To your CxO, it more easily boils down to “the likelihood that someone is going to close business with us in the next X-days.” You can follow that by explaining how tracking engagement activity will increase that likelihood.Stating your goal as it relates to business (upping the likelihood of closed business in the next X-days) lays the groundwork for explaining what you need to do to get there (track everything that can help you figure out what makes an account more likely to close).
That’s revenue. That’s money. And that’s what they will listen to.
- Want to Get In With Your CFO: Talk about the J-curve Effect. The J-curve Effect is how CFOs think about money. If you think of investing in a VC-backed company, everybody’s dropping in money at the beginning. You get zero money back, because it’s all being used to build the product. Over time, as you make sales and get relative value, the value of those dollars put in comes way back up out the top. That’s the J-curve.
Talk about your marketing needs in the same way. There are so many approaches you can take in marketing; so many tools in MarTech. You want to get to a place where you can run experiments to prove out a few small J-curves on a small dollar amount. If you like where one or two are going, double, triple, quadruple down. Experiments not producing the J-curve Effect get turned off.
- The Revenue-Weighted Conversion Rate. When you only talk to your CEO about generating X-number of leads, he or she is likely to say “Great, that’s 10 percent of what I need you to do.” You must look at the whole process, identify where you have drop-offs, and where you have the opportunity to make the biggest impact on conversion rate.
Technical marketers love conversion rate optimization (CRO). Make sure you’re doing CRO on the entire sales cycle, not just on the three pieces Marketing owns around awareness, business to the website, and form fills.
They filled out the form. How do you make that more likely to become an opportunity?
They became an Opportunity. There are several stages in that opportunity, but Marketing usually doesn’t know that (go talk to your sales team). How do you increase the conversion rate across each of those Opportunity stages?
Once they become a customer, how do you increase their on-boarding likelihood? Because if they don’t onboard well, they’re not going to up-sell.
If you can go from five percent to 10 percent at X-stage, it may represent a two X-ing of the business, while if you jump from five percent to 10 percent on lead generation, it may only increase the business by three percent. That’s what we mean by “revenue-weighted conversion rate,” and your CxO will get it.
- A Focus on Metrics, But Not At All Costs. Everyone thinks metrics are great. You want to manage your efforts toward metrics. That’s true, to an extent. But if you’re managing toward the wrong metrics, it’s really hard to get yourself out of that.
People get used to what you report on. So in addition to managing toward certain metrics, you should also manage expectations. If you don’t have a plan for how to discuss what you’re doing and why it matters, the CxO will default to wanting the sort of inherent metrics we have all been working off of the last 20 years. If you want to break away from that, you have to treat your conversations like internal marketing.
Engagement scoring, for example, doesn’t in and of itself readily translate to the business. But it’s still important. Your goal may be to drive more engagement across an account to soften it for sales so that they can close more opportunities. Those things can be hard things to measure right out of the gate, but they’re super important, and they drive value.
Let’s Rally Around Revenue: How Marketing and Sales Scale Growth Together
Yes, it’s about sales and marketing alignment. When you have predictability in process and outcomes between Marketing, Sales, and Customer Success, you’ll have an easy time relaying success to the CxO. Predictability from highly aligned Marketing and Sales groups are ecosystems in which the CxO can gain more and more confidence, that they can reliably throw money at, and know the business will grow.
If your organization isn’t thinking about the customer journey holistically across Marketing and Sales, or across its customer base, what is the impact not only for those teams, but also for the business?
When Sales and Marketing are run completely separately and looked at as separate metrics, it’s hard to pinpoint where issues might be rooted.
Sales leadership may see selling problems as an issue with their salespeople when it’s actually a problem with their marketing overhead. That can lead to a downward spiral where really good sales people who recognize the effect that really good marketing has on their ability to make sales leave for places that have the Marketing support they’re looking for. That impact trickles down to the bottom line.
It can also go the other way, where Marketing creates virtuous cycles by increasingly pushing sales people closer and closer to being order takers. Marketing’s job is to make the sales process shorter, easier, more predictable, and quicker over time, whether that means greater lead velocity, more brand awareness, or better sales enablement tools.
Sales scale linearly. The only way to scale sales is to hire more salespeople. There’s a finite limit to how many deals an individual salesperson can close. Meanwhile, Marketing scales logarithmically. You don’t need 50 marketers to support 50 sales people. You need five. Then Sales can go add another 50 sales people, and Marketing can add three more marketers. The stuff that Marketing does should be scaling across the entire org.
Get Started In Revenue Marketing By Doing.
Unless you want to go to business school for the three letters after your name or for the network, you can get almost everything you would get out of a business school by reading Personal MBA or perusing free content. MIT and Stanford both have open courseware with all of their syllabi and even lesson plans online. Your CEO, whether they’ve gone through an MBA or not, knows the language of business. So should you.
Read business books. Pick up Barbarians at the Gate: The Fall of RJR Nabisco, if only just to hear the language over and over again. Find some business books with stories you can read to learn about how your bosses think, and what things they’re being forced to do in their business. What are the metrics and the KPIs they are judged against? What are their inputs? What are their outputs? The more you understand that, the more that you can have empathy with them and explain and ask for things effectively.
It’s the same as any marketing you ever do. The more empathy you can have with your customer and their situation, the more likely you are to be able to create marketing that’s going to resonate.