Peter Zaballos, CMO Peer Advisor at Authentic Brand, joins our host, Camela Thompson, in this episode of the Revenue Marketing Report. Peter shares how vital a close partnership between marketing and sales is to a company’s success, his opinion on the emergence of revenue operations, and which metrics a marketing team should rally around.
Based out of Seattle, Peter Zaballos is a CMO Peer Advisor at Authentic Brand.
Revenue Marketing Report
Full Podcast w/ Peter Zaballos
Where Does the Misalignment Stem From?
Several factors contribute to the misalignment of marketing and sales:
- Marketing communicates to tens of thousands; sales focuses on relationships with individuals
- Marketing focuses on systems and statistics; a salesperson’s income depends on their ability to close a sale
- Marketing needs to understand how generic personas think of the problem they’re trying to solve; sales is solving a specific person’s problem with a product’s features
- Marketing is often evaluated against an MQL (marketing-qualified lead) quota; sales income is dependent on opportunity bookings
But the factor that determines the degree of alignment (or animosity) between the teams is the strength of the relationship between the CMO and VP of Sales.
“Marketing can't consider itself done or achieving their goal if sales hasn't hit theirs. That is a surprisingly difficult level of organizational cooperation to get to. Frankly, it's the exception and it's not the norm,” said Peter.
“The very first breakout tech company I worked with was a company called LSI logic. It was a semiconductor company in Silicon Valley that created the technology that made cell phones and computers possible. That company had a phenomenal culture. Sales and marketing were just the same. As head of marketing for Northern California, I lived with the salespeople. We had no CRM. We had no data. It was early days, and it seems like the more data and more technology we've injected into sales and marketing, the easier it's become for them to operate as individual silos.”
While we believe that technology has the potential to make lives easier, we must admit that it’s easy to over-engineer. Peter brought up a great point—technology has made it easier to abandon ownership of a process once a handoff is complete.
“If marketing's role is reduced to delivering leads and that's where their field of vision ends, then I think the go-to-market motion has been completely compromised. With all this technology, a sales leader and a marketing leader can create their own set of metrics that tell the ‘truth’ that they see in their silo. If the marketing person says, ‘Hey, I delivered all the MQLs I was supposed to deliver, and my job is done,’ the salesperson can say, ‘Of those MQLs, the majority of them weren't relevant, and here's all my data proving it.’ It’s too easy to live in your own world, especially without tech stack integration and advanced analytics. It makes it too easy to get into a fight about data.
“The only real way around that is to say, ‘Okay, everybody gets measured on whether we hit the revenue plan.’"
The best way to understand someone’s perspective is to spend more time with them. People who are separated are more likely to dwell on the negative interactions they have with one another (people are hard-wired to remember negative interactions more than positive interactions), which breeds resentment.
But things are standing in the way of marketing and sales spending more time together that go well beyond the pandemic. Peter and I have observed that sales managers are very protective of their direct reports' time—and understandably so. Any time spent away from selling is bad, and introducing more people to a sale also introduces risk.
While sales ride-alongs or sitting on a sales call are wonderful resources for marketers, the sales team doesn't want to risk losing a deal.
Fortunately, there are applications like Gong, Chorus, and Avoma that record calls so they can be shared with marketing without risking a sale.
There will be lost deals. And sales will naturally take the loss harder than marketing. Marketing isn't losing a portion of their paycheck and can objectively look at the experience as a learning moment. So how do sales and marketing thrive despite this big disparity?
"To me, it's about leadership. That's why the sales head of sales and marketing have got to be fused together leadership-wise. When a big deal is lost, that's when the head of sales needs to be able to lead their team and say, 'We may have lost the deal here. What are we learning from it? How can we work better together so that we don't lose it the next time?'
"It's the rare and evolved head of marketing and head of sales who can look at each other and understand that the marketing person needs to have visibility and influence on everything that happens up to the completed sale. And the sales leader has also to share that same interest and influence about everything that happens before a lead getting in a salesperson's hands. If you achieve that, the good news is that with all the technology and data we've got, you can make transformative impacts on the business."
The Measurements That Matter
When I asked Peter what marketing’s North Star should be, he said, “The only metric that matters is whether we are hitting the sales plan. Everybody's job in any company, regardless of what department they’re in, but especially in marketing, is to help sales hit their number.”
Marketing analysts are often tied up trying to integrate systems or merge spreadsheets to get metrics expected for quarter-end reviews. Not having fully automated reports means a lot of time is wasted looking back at what happened in the past rather than understanding what is or isn’t working today. It’s vital that marketing sets aside a budget for a strong analytics infrastructure.
“The best thing that the marketing organization and marketing operations could do would be to report on the critical conversion rates because those are going to reveal organizational issues. Conversion rates reveal interdepartmental issues. When I had a strong partner in sales, we figured out that the time that elapses between a form fill and a call from sales correlates to the probability the sales would close. When we waited a day, the success rate would fall off in order of magnitude. When we got the time from form fill to 10 minutes, our conversion rate went up to 37 percent.
“As an executive, I don't want to look at every single conversion point. I want to understand which conversion points are in jeopardy and what we are doing to address them. You may discover you need to hire different people if you're going to double next year. You may need to have a completely different content strategy. You may need to hire different salespeople. Conversion rate issues reveal so much.”
But that can only happen if your systems are calibrated a certain way, your sales and marketing team agree on conversion definitions and collaborate, and your leadership team is in lock-step.
Thinking About Adding Revenue Ops? Think About Why First.
Revenue operations and the CRO role are on the rise.
"There's no substitute for great leadership. And to me, revenue operations sounds like a bandaid for a leadership problem. The logic is if the sales leader and the marketing leader can't agree on how to orchestrate a constructive handoff between marketing operations and sales operations, then the only thing to do is put them under one person who will force it. That VP of revenue operations is going to have to unite two organizations that, at that point, probably don't like each other, probably don't trust each other. Having operations report to the same person is just a band-aid because that same person will have to exercise the same leadership that the two individual leaders would have had to exercise to get those two independent organizations to work together.
“I'm sure it can work well in organizations, but to me, the real issue is if you have a lack of leadership between marketing and sales. Combining revenue operations shouldn’t be viewed as the solution in this case. The reflex to spin up a revenue operations team is a symptom of a leadership problem.”
As a technologist, I had to advocate for revenue operations. As someone who has worked in operations departments spanning marketing, sales, and customer success, I've experienced the chaos that can be created when teams don't understand how the entire tech stack interacts. It's too easy for someone to make a unilateral decision and blow up a team's workflow up or downstream.
Peter said, "I can totally see that. And I can also see there's probably some economic efficiencies, too. You're going to need a developer in each organization. Why not have centralized development? I can see how that could be a real source of efficiency. In my last two roles, I spent a ton of time with the sales ops people to see what we could do to make things as efficient as possible. But I also feel like creating a revenue operations organization for the sake of efficiency is the minority case. The majority tends to be that marketing and sales leadership doesn't get along."
That’s a fair point.
It also brings me to the observation that the CRO title has been award to sales VPs at small companies because those companies can't afford both a sales and marketing executive. Marketing can be very effectively outsourced initially, and sales must have a leader in place as soon as the product meets minimum viable requirements.
“Sales and marketing are naturally very different disciplines. A really good marketing organization can do an effective job without being in the same building as sales. So much of what marketing is doing is machine-driven across thousands and thousands of discreet engagements. You can roll up metrics that will tell you how all of that's performing. People think of marketing people as being creative, conceptual artists. It's the most data-driven, nerdy, quantitative, introverted role you can imagine. Selling requires a totally different skill set, and sales leaders have to make so many judgment calls that can’t be validated with data.”
“I recently got affiliated with a fractional CMO firm out of Minneapolis called Authentic Brand. Their value proposition is pretty compelling because they can go to a small company and say, ‘You neither should nor can you afford to hire a full-time marketing executive, but you could probably use 10 hours a week and get the impact and the benefit from that.’
“You can't not have a full-time head of sales, but, eventually, if the company grows enough, that head of sales is quickly going to be way out of his or her depth trying to scale the marketing.”
Camela Thompson Camela Thompson is a trusted expert with a long history in sales operations, marketing operations, and customer success operations. She advocated for revenue operations before it was a thing, and has managed tech stacks and data infrastructure for multiple companies.
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