Our Points Of View On Sales & Marketing

Thought Leadership

by Jon Russo Jon Russo No Comments

SaaS: Customer Retention is EVERYTHING!

SaaS – software as a service is a business model that was pioneered in the early 2000s to eliminate the costly software license model.  There are now a handful of global public company comparables with metrics that are published on the performance of these SaaS companies (Salesforce.com, Successfactors) and emerging fast growing companies (Appsense, Eloqua, Marketo, and Qualys to name a few).

An attribute to the SaaS business model is recurring revenue with shorter duration contracts, with resign upsell opportunities that typically range from 0-20% of the annual value.   With shorter duration contracts than that of a typical software license sale, retention of customers in a SaaS model becomes CRITICAL for the organization to make it’s overall annual revenue number.

Here are 5 techniques that I’ve used to help aid in retaining SaaS based customers:

  • Formal interviews with exited customers:  to be done by an external 3rd party to eliminate any survey bias and to get accurate information, you’ll be amazed at what your former customers will say about the onboarding process, their interactions, and the touchpoints they have with the organization.  This will also give a roadmap to win back their business.  I’ve used Primary Intelligence in the past with success.
  • Implement Net Promoter Score with existing customers:   to test periodically how customers see progress in your service offering or where the pain points lie on your customer service side.  This is typically done with larger, global enterprise B2B SaaS companies.  There are newer, more cost effective companies emerging to help smaller SaaS companies to run similar surveys.
  • Study and understand the compensation scheme for how your sales organization gets compensated on new and retention business.  A compensation model that is effective is how Gartner Group compensates their reps on new business and retention business (NACV model is what they call it – ask your rep, he or she will know all about it!)
  • Bundle and drive new feature/functionality around the resign period.  This bundling is key to drive price increases, I’ve had instances of other SaaS companies approaching me for annual renewal increases ‘just because’.  That line of reasoning is difficult to justify!
  • Involve your customers in global customer advisory boards so they can help shape product direction.  Engage your customers in regular field communication via newsletters AND LinkedIn (and opt-in customer forum), thus keeping them in constant contact with new developments on your product so they are always informed and never surprised.

What do you find that works for your organization’s customer retention efforts?

by Jon Russo Jon Russo No Comments

4 Reasons why Marketing Automation changes a Marketer’s SaaS Career.

I just read an interesting post from a fellow EMEA CMO/head of marketing @JWATTON with a thought provoking viewpoint that marketing automation for SaaS (software as a service) US headquartered companies would have less need for heads of regional marketing in locations like EMEA as automation replaces local headcount.    My view is slightly different.  As a head of marketing  for 3 software and service companies with 2 successful exits, I’ve hired in region expertise, spent significant time in Europe, and implemented MAP (marketing automation platforms).   He had some really interesting viewpoints that I wanted to elaborate on – some of which I agreed with and some my view differs.

Here’s how I’m seeing things on what changes marketing automation means for a marketer and her/his career:

  • Marketing automation on its own with no marketer senior level supervision is like a train running downhill without tracks.  The potential to do more harm than good exists when investing in these systems without a clearly defined business objective up front.  The caboose is the MAP, the engine is the objective, the trains that link the caboose to the engine are the process.
  • Marketing automation is a means to an end, not the end itself.   A measurable business outcome should be set with sales tying them to the outcome of the process and also involving them on why this benefits y/our selling cycle.  When automation is performing correctly, revenue is accelerated and sales teams are more informed about their prospects prior to actually contacting them.  A marketer now needs to run that dialogue, that is a new dialogue for ‘dated’ skill set sales people as well as ‘dated’ skill set marketers – it can also be ‘dated’ skillsets for board members who do not know how to measure marketing, adding another complex communication vector to the equation.
  • As @JWATTON identifies in his blog post, Marketers who are not proficient in the latest digital tactics are not going to survive in this new world.   Those that are not steeped in the language of Eloqua, Marketo, SilverPop, Pardon, Hubspot, or any other marketing software that integrates with Salesforce.com will become known as the ‘marketers of the 80s’.  Those that are not proficient in social media like LinkedIn, Facebook and Twitter (follow me @b2bcmo) and understand the social media tie to business objectives will also be ‘80s marketers’.   Lastly, those not proficient in SEO techniques an integrating SEO into the MAP platforms for B2B will also be yesterday’s marketers (NOTE:  today’s integration is challenging).
  • In my mind and contrary to his post, there is always a need to be geographically close to both internal customers (sales) and external prospects and/or customers.  It is nearly impossible for a head of marketing in the US to know and understand the marketing nuances of in region challenges.  Marketing within Germany is a challenge in and of itself;  it’s often a NA centric software company *incorrectly thinks* EMEA is one ubiquitous region to market into (just like the US!) without understanding each country has a different market and a different way of receiving information.   Privacy laws differ dramatically in EMEA and in certain countries moreso than that of the US;  this makes a marketers job in both EMEA and US more complex and raises the bar for a marketer to continually learn, as his post correctly points out.  Also note that contact software today (Dun and Bradstreet, InsideView) are largely North American centric databases, thus requiring another level of thought from an in region marketer.

It’s a round world and we all see things from different viewpoints – how do you see things if this relates to you?

by Jon Russo Jon Russo 1 Comment

The B2B Buyer Cycle – Starting Point

If you are a marketer (or any professional in a company that is non-sales oriented), how do you get informed of your buying cycle in a B2B sale and map your buying process to make sure your tools and messages fit with their needs?

At a recent Sales2.0 conference in San Francisco that I attended, there were a number of interesting trends mentioned in b2b selling cycles:

  • 70% of buyers already have information about your product prior to contacting a sales person
  • The sales profession in 2020 is estimated to be a profession of 3 million, down from 18 million today.
  • Inside sales as a profession is growing at a 20% annual rate while outside sales is stagnant (and likely trending downward).

Here are some suggested approaches on how to best start mapping your buyers process – these are techniques that I’ve used in the past with great success.

1.        Go on face to face calls (after getting permission from sales of course):  If you look at some of these trends, it is becoming more challenging to participate on external sales calls in hopes of learning what a sales professional faces.   I highly recommend going on external sales calls if possible, I’m still amazed at the number of marketing professionals that seldomly or never participate on calls to get sharper at their own knowledge!

2.       Go on calls – internally with inside sales:  With the growth of inside sales occurring, there is a very cost effective way to get smarter about how your buyer sees your value first hand.  Usually there is low cost for a sales person to involve an external entity on a call if one participates quietly.  Listen to the language your buyer uses (and where they are getting their data from).

3.       Run surveys:  either through regular customer advisory boards or SurveyMonkey, figure out how your customers are getting so smart so quickly.  If you have established communities (LinkedIn, Twitter), regular surveying is easy to do.  The survey can be of your existing direct sales channel, your indirect channel, your prospects (if run over your home page website) or of your customers.  Get the data to make informed decisions!

4.       Be active monitoring social media:  in a B2B environment, Quora and Focus.com provide a prospect a forum to learn what others are saying about your product in long form (more than 140 characters).  LinkedIn questions also have a similar structure to Quora and provide visibility to what your customers are saying.  An active monitoring at a minimum augmented with a strategy to be responsive to customer service or product issues within these forums is a must.  The other social media outlets (Twitter, Facebook) are also valuable, though the longer form of LinkedIn and Quora give someone the opportunity to vent at length.  Also, I’m finding very few businesses relying on Facebook for their B2B purchase!

There are other processes to map along the buyers journey including all customer touch points.  We’ll save that for another post!

What do you use to make sure you are understanding how your buyer thinks?

by Jon Russo Jon Russo 1 Comment

Dashboards – Marketing and Sales – Driving Revenue!

There are several challenges to establish ‘board level’ dashboards that report on marketing activity that tie directly to revenue generation.  Here are 5 tips that I’ve used in creating dashboards for executive level reporting.  (NOTE – LETS TALK REAL TIME IF YOU NEED HELP IN CREATING A DASHBOARD, I HAVE ACTUAL EXAMPLES OF THEM.)

  • With new automation tools like Eloqua and Marketo, from interviews I’ve done with a number of CMOs of B2B companies, a surprising number of teams use Excel to report out on activity despite having capabilities elsewhere. Whether it’s Cognos, Salesforce.com, Eloqua, or Excel, the tool really doesn’t matter as long as the data is consistently measured month over month or quarter over quarter.  The trick is to baseline the activity based on current information, especially as a new leader or CMO.
  • Dashboards (or numbers) can sometimes not paint a complete picture as a stand alone entity on campaign effectiveness.  I augmented my quarterly board dashboards with a ‘green, yellow, red’ status indicator on QUALITATIVE indicators in addition to QUANTITATIVE indicators to help paint a more complete picture of actual marketing activity that impacted revenue.
  • Measure global/regional impact and channel impact that marketing had on sourced revenue – in other words, what did marketing contribute and at what cost point by region.   This analysis can be further filtered on a timeframe to close, no different from a sales funnel, where leads are predicted to close. (predictive analytics).  Also, be aware for you global marketers – activity within region should be compared within region and not across regions.
  • Web traffic is worth measuring as is the impact social media has on web traffic.  Social media in and of itself did not contribute to my dashboard foundation, my experience so far is social media (linkedin, twitter, facebook), more of an enabler than an actual converter of revenue in B2B marketing.  LinkedIn seems to be the most relevant here (I plan to create another post on this later).
  • Tracking contacts to opportunities allowed for better tracking of marketing influence/sourced, this is particularly true for those that leverage the campaign module of Eloqua.  This tracking can be further augmented by the Microsoft Outlook plug in leveraging Eloqua.

Dashboards vary with mileage and will change as your company changes it’s needs and growth patterns.  What dashboards have you found to be effective for you?

by Jon Russo Jon Russo No Comments

Revenue through Marketing Automation

Increasing Productivity through Marketing Automation Platforms (MAPs)

My experience in this post comes from implementing MAPs in 3 different companies – in one of those companies, the MAP providers (Eloqua, Marketo, Aprimo) were a channel of distribution for us, so I had unique visibility as to their effectiveness.  When a process is followed, time efficiencies can be gained;  skipping implementation steps risks losing significant time to see effectveness.  When investing in these systems, you have to commit as an organization to move QUICKLY else you risk the ‘Ferrari collecting dust syndrome…’

You’ve heard of the brand new Ferrari collecting dust syndrome – someone buys a new car and it collects dust due to lack of use.   This same analogy has been used in investing in what is perceived as expensive marketing automation software to run routine marketing campaigns to accelerate revenue.  Implementation of these systems is very challenging to say the least in larger enterprises – outlining business process, integrating with sales ready tools, identifying KPIs and metrics, getting buy in, etc.  There are several key considerations when evaluating the need to increase productivity through marketing automation efficiency.

1.        Map out your lead flow process from inquiry to close by studying your Salesforce.com information, your marketing automation information, and interviewing your key sales stakeholders.  I’ve done this in two different companies and have found stunning results in both the process and in the experience that sales expects from marketing.

2.       Implement lead scoring through progressive form input/dialogue.  The progressive lead scoring will allow only the most qualified prospects deemed worthy a real time conversation (which is more costly than an automated touch).  The idea is to pass only the best qualified along to a telequalifying or inside sales entity.

3.       With the MAP platform, synthesize ALL campaigns to maximize effectiveness, to include SEO (search engine optimization).   It’s no good just to have campaigns for the sake of campaigns.   Some of the MAP platform providers are VERY early in on this process themselves which is somewhat shocking but true!

4.       Engage your marketing automation vendor early and often in your process flow (Eloqua, Marketo, soon to be Netsuite).  They do have best practice information as does other companies like SiriusDecisions.  You are better off engaging the MAP platform provider directly.

5.       Engage an outside party to help to move things more quickly.  An outside party can take the pressure off difficult conversations and can have the added insight of having been through other operational deployments.

What have you found that works for you?

by Jon Russo Jon Russo 3 Comments

Maximize revenue as a goal – Aligning Sales/Marketing

If you read the last post, you saw the importance of tying revenue to results in both sales and marketing.

Let’s dig into some key steps to tie revenue to results:

1.        Adopt common language between sales and marketing on tracing inquiry to revenue – an exercise like this that is NEW to an organization has the potential to be tricky if expectations are not properly set in advance– the objective is not spend oodles of time on the adoption and process portion but to focus on the outcome of why this is needed.  The focus is aligning sales and marketing to measurable, tangible results at day’s end.  With common language, a baseline measurement can be established to make further improvements in and on.

2.       In advance of the above discussion, get buy in with key executive stakeholders on the measurements so baseline measurement is established.  As an example, it would be good to get buy in on the framework of what the outcome will look like in advance of digging into the details between sales and marketing.

3.        Once the framework and language is agreed upon, both sales and marketing can establish measurable goals to be held accountable to.   These agreements can be measured monthly, but the results will likely be in quarterly or half year increments.

4.       Create a lead flow process via marketing automation platforms (Eloqua, Marketo, Aprimo) to drive that delivery effectiveness (this will be the next series of posts).

5.       Avoid speaking in ‘Star Trek’ marketing language/speak in this measurement process – while the establishing of common language is important, it always needs to tie to revenue.  Marketers who talk in their terms (Inquiries, MQLs, SALs) can lose people in translation in companies that may not be familiar with that language.  This is particularly true with non-marketing executives which are typically less analytical in nature and board members who do not operate at the marketing tactic level.

What do you find that works?

by Jon Russo Jon Russo No Comments

Connect B2B Marketing to Revenue!

This is the first in a series of posts of tying B2B marketing result to revenue.  This is the framework for the discussion on how marketing drives revenue for their enterprise organization.

A key aspect for business to business marketing to focus on is delivering activity (sales qualified leads or sales ready leads) that close to actual revenue – ‘revenue’ is language the head of sales, CEO, CFO, and board of directors understand.

But what do I measure as someone in a B2B marketing organization?

Too often, marketing teams and leaders measure their internal impact for the sake of measuring and are not making the direct connection from their activities to revenue either by channel type or geographic region.  Some call it ‘activity’ vs. ‘impact’.  Measuring followers on Twitter, Facebook fans, webviews, etc. while impressive to those in marketing really have no true tie to what non-marketers truly understand – the contribution to revenue.  This is what drives business!

Let’s take an explicit example.  The contribution marketing makes can vary widely by the type of company and it’s distribution channels.  I’ve been involved with companies that marketing has sourced 16% of annual contract value and have seen other companies, particularly SaaS companies sourcing beyond 50% of revenue through their marketing activity.  Benchmark companies like Forrester and SiriusDecisions also have similar percentage contributions for enterprise companies – your percentage will vary on company type, geography, and buying cycle characteristics.

Look for this trend to continue of more revenue getting sourced through marketing – prospects today are spending more time in online communities or researching online their needs before engaging with sales organizations.

To do this kind of measuring, automation fundamentals need to be in place (Eloqua, Marketo, Aprimo), processes need to be installed, and an executive agreement needs to be discussed on outcome.  Our next posting will dig into key steps on how we will tie revenue to results in these areas!

http://www.alphainventions.com/

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Mr. Jon Russo


Jon Russo is a senior marketing executive with specific expertise in Software as a Service (SaaS) and recurring revenue service models targeting business to business segments. With twenty years Silicon Valley and global operational experience in high technology companies with annual revenue from $2 million to $2.5 billion, he led two companies through 300% growth supported by innovative marketing programs and marketing automation. As head of marketing, he has participated in two successful exits of service companies through an Initial Public Offering (I.P.O.) as a corporate officer and a $180 million acquisition. He has overseen 3 marketing automation implementations, the latest implementation leveraging Eloqua, InsideView, and Bulldog. He has partnered with SAP, Marketo, Aprimo, and Eloqua among others.

He earned an M.B.A. from the Haas School of Business, University of California at Berkeley, and an undergraduate degree in Finance from the University of Connecticut.

 

Jon consults on marketing automation, dashboard measurement/creation, marketing ROI, marketing strategy, and channel strategy on a global basis.

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Steve Gershik – Founder, Demandcon

We just kicked off DemandCon, the premiere demand generation event which attracted several hundred sales and marketing professionals.  Jon’s CMO/Executive presentation was outstanding for this event – he clearly articulated the right metrics for the executive and board level – an area sorely needed by many companies who struggle to connect marketing investment to new revenue. As a speaker and strategist, I highly recommend Jon!

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Corey Livingston, Demand Generation, Level3 Communications

“Jon and his team accelerated our Perpetual Demand Center global vision. He enabled proper segmentation through our CRM system, architected a marketing database capability for us, and improved campaign accuracy through implementation of best hygiene data practices.  He assisted us in our KPI and dashboard process to measure more marketing sourced revenue.”

…..Corey Livingston, Demand Generation Leader, Level3 Communications