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Aligning sales and marketing, with Intercom’s Brian Kotlyar and Jeff Serlin

Director of Demand Generation, Intercom

Brian Kotlyar

@bkotlyar

Senior Director of Sales and Support Operations, Intercom

Jeff Serlin

@jmserlin

Marketing and sales may employ different tactics, but their goal should be singular: help the company sell its product.

Sometimes, however, blocks can develop in the pipeline. They can be difficult to diagnose, and if sales and marketing don’t have a healthy relationship, things can devolve into pointing fingers instead of working together to find solutions.

As we’ve discovered, it all comes down to alignment and communication.

We recorded a free-flowing conversation for the podcast, where we flipped the script and interviewed each other about everything from how to stay relevant in marketing to strategies for digging into tricky metrics.

If you enjoy the conversation, check out more episodes of our podcast. You can subscribe on iTunes, stream on Spotify or grab the RSS feed in your player of choice. What follows is a lightly edited transcript of the conversation. Short on time? Here are 4 quick takeaways:

  1. Many early-stage companies fail because they scale sales too quickly. If you can’t easily answer questions like: “What’s my opportunity-to-close rate? What pipeline am I expecting for each of these reps and so on?” you’re not ready to build out sales.
  2. A successful sales and marketing partnership is based on a mutual understanding that we’re all manufacturing the same thing — revenue for the business.
  3. Sales and marketing tactics can vary, but to succeed, the teams need to be aligned around one plan: a revenue plan, not a sales plan and a marketing plan. If the ownership isn’t shared, finger-pointing creeps in.
  4. Marketing needs to be a revenue oriented culture and marketing leaders have a responsibility to create this culture. It doesn’t matter that we shipped a new website or ran 30 webinars if we missed our number.

Brian Kotlyar: Before we get started, Jeff, why don’t you give me a run down of your career and how you got into this chair across from me?

Jeff Serlin: Thanks Brian; it’s good to be here. I’m almost embarrassed to say I’ve been doing sales operations for about 15 years. When I started, there was no such thing. People weren’t recruiting for it. It wasn’t its own specific position. I actually had a marketing role where I helped build out lead scoring and lead nurturing processes before there were many automation tools for these jobs. But I was the guy in the back who was always suggesting that we should look at our pipeline. How many leads should we create this month? How are we moving them through? Where are we going to track these metrcis? I would run around trying to get forecasts from everybody, even though it wasn’t my primary position.

When I first started using Salesforce in the early 2000s, no one knew what to do with the tool. So I sat down and created a couple of basic processes and workflows. I just migrated toward the role of sales operations until it started to become something real. About 10 or 11 years ago, I was approached by a head of sales who knew my background and wanted someone who was very well rounded to run operations full time. So I took the plunge, and that’s when I started thinking about it as a career, as a function, as something strategic. Since that time, I’ve set up and run sales operations teams, done a little bit of marketing ops, and even a little bit of finance at times at about four different companies. And I joined Intercom about a year ago to build sales operations out here as well.

Your turn, Brian: how did you get into demand generation and marketing operations?

Brian: Similarly to you, actually. My mother always remarks that these jobs didn’t exist when she went to college and wonders how I ended up in this weird job she can’t explain to her friends. Basically, I got my start because it was what companies needed. My training was as an industry analyst, where I did a lot of writing. My entry into startups was timed really well for the emergence of inbound and content marketing as marketing tactics. Because that became the primary way that businesses were driving demand, it really enabled me to get a really good, holistic view of the relationship between what we want to sell, what we need to say, and how we are going generate leads. From there, I was able to experiment with tactics like email, advertising, and website optimization.

The natural question that follows is whether these tactics are making us any money. That’s generally where marketing operation steps in. In my case, I was at a small company, and there were no marketing operations, so it was my role to build out the team that would solve those questions in a scalable way. That’s what I’ve been doing ever since: devising the programs that will cause activity in the market, measuring them, making promises to the business about the revenue those programs will create, then holding ourselves accountable to those promises.

How to scale sales and marketing

Jeff: You mentioned you led marketing at a few early-stage companies. What advice do you have for startups that are thinking about building and scaling their sales and marketing functions?

Brian: Because I was a part of some early stage businesses that maybe scaled a bit too quickly, I’m naturally a little conservative. Some might say that this advice is too conservative, but my general guidance is that I’ve seen so many companies fail because they scaled sales too quickly. It’s very easy for a very enthusiastic founder group – at the advice of a bunch of venture capitalists – to say, “We’ve sold $100,000 worth of stuff. We’re ready to scale. Let’s go hire a hot-shot director, a bunch of account executives, 10 sales development reps (SDRs), and so on.” In my experience, that’s rarely what you need in the first initial push. It’s a pattern I see time and again. Just because you’re making some money doesn’t mean you’re ready to build out a complex, full-board sales organization. If you can’t easily answer questions like “What’s my opportunity-to-close rate? What pipeline am I expecting for each of these reps?” you’re not ready.

So many companies fail because they scaled sales too quickly

On the marketing side, the thing that’s on the mind of many marketers these days is that we’re all paying Google and Facebook “rent”. We pay rent to show up in people’s news feeds, and that’s just how it has to be to be visible and relevant. To some degree, it’s a necessary thing to do so we can be effective. But for an early-stage company, it’s easy to burn a lot of your cash really fast on things you’re not really set up to do effectively. You have to ask yourself: do you have a sales team in place to monetize those leads, or can your product do it for you?

I believe strongly you need to come up with a portfolio of tactics, and those tactics have to range from the very expensive to the very, very cheap. You pay your rent where you have to, and you mooch off the land for free where you don’t – and the combination of those things is what gives you the right portfolio to help you grow.

Brian: Jeff, you’ve done sales operations in businesses across the whole spectrum of scale. As companies mature, how do you see the relationship between sales, marketing, and operations changing as they grow and become more complex?

Jeff: When you start off as a company, you first have to validate that people are willing to give you money for your product. You do this before you even come up with the strategy about what size and what type of companies you want to sell to. In the early days, you’re just trying to acquire customers, figure out why they’re buying, and go get more of them. I don’t know that you need much sales operations or even a big sales team, as you mentioned. You just need enough bodies to handle the leads and people with a optimistic mindset to find customers.

As you start expanding to multiple offices and customer segments and you hire a sales manager or two – that’s when you need to start thinking about putting operations in place. When marketing and sales teams start to get bigger, that’s when they start to diverge. They sit at different places of the building and go through different processes of figuring out what they need to do. The role of both of our operations teams is to pull them tighter.

As a company matures, both of those organizations are going to mature, and without that operations glue that tells you what my team does and what yours does and make our work into one continuous supply chain, you’ll start to see things like marketing targeting the wrong customer segment and sales using sales motions that are not compatible with the leads coming in. That’s when bad things happen. You’re either spending money on pipeline that isn’t getting converted, or sales is converting pipeline that you otherwise would not want to convert. So operations needs to get more sophisticated. You need to start documenting things. You need to start aligning your processes. You need to start having more structure and governance in how you do everything. If you have these things and you’re staying on the same page with the same KPIs and constant communication, then you can typically grow your sales and marketing team together in the right sort of way as the company scales.

Brian: It seems like you get that alignment and that sense of being one team for free when you’re small. And as the company gets bigger and more complicated, the role of operations is to preserve that oneness and single team mentality in how we work.

Jeff: One hundred percent. Let’s take hiring a dedicated events person as an example: we know how challenging it is to manage logistics of setting up and executing a great event, and that’s a core skillset that not a ton of people have. And you’re going to hire someone who’s optimizing that, but they might not be fully aware of the full process – how you gather leads, how you nurture them, and how you pass them over to sales. And that’s okay, because the role of that person is to put together really great events. That’s where the marketing ops team can work with the sales ops team to help pull that specific tactic you’re investing in into the overall process. The events person might not even ever think of sales other than who’s going to staff the booth to do what they do best.

Sales and marketing partnership

Jeff: You and I believe sales and marketing need to be closely connected. What does a successful partnership look like?

Brian: I would echo something you mentioned a little while ago, which is that it’s really helpful when both parties think of the partnership as a supply chain. We’re all manufacturing the same thing on behalf our employer, which is revenue for the business. The foundation of a successful partnership is understanding that.

It’s really helpful when both parties think of the partnership as a supply chain

It might sound routine or boring, but not everyone gets it. Some sales organizations are just in the business of acquiring logos rather than actually trying to make money for their business, because that’s the way their comp has been set up or what their leadership has set as a goal. Or more commonly, the marketing team might think, “Our job is building brand.” Being the revenue and operations person, my question is always, “To what end? We don’t sell our brand. We sell stuff, and the brand is supposed to help us sell that stuff.” Even if your job is actually to build a brand, you always have to ask that follow-up question, “To what end?”

Once you understand the end outcome marketing and sale are driving at together, then you get to the fun part of the partnership, which is what you and I get to do together. Yeah, we may give each other a hard time about our respective contributions to the supply chain, but we can help each other figure out: How are we going to get to the revenue outcome we want? What’s the efficient way for our business to get to that goal? Are we staffed correctly? Do we have the right capacity? Can I actually drive the leads you need in the timeline that you need them?

That’s where the art comes into our roles. Because there’s not a playbook you can just execute. I wish there were. There’s rarely an obvious answer like, “Hire 10 reps, buy some Facebook ads, and the problem goes away.” That playbook has never worked for me. I don’t know anyone who it’s ever worked for. I don’t expect it ever will. So that’s why it’s key to get aligned in how we work, forecast, and shape the future.

Because of that mentality, my experience working with sales generally has been good. At times when it has been very very bad, it’s because there’s a misalignment of expectations of what the supply chain’s trying to make and of the plan that we should have co-developed but often did not. Lastly, sometimes there can be a lack of understanding that both our jobs are hard. You can both know you’re supposed to be making money. You can both agree on a plan. But I’ll be a little folksy for a minute: my uncle has a saying that you should “never take out the trash when no one’s looking.” No one appreciates how hard everyone else’s job is if they don’t see it or feel it. You have to have empathy for the party on the other side.

Driving leads of quality is super hard. It’s super expensive, and it takes time. Closing those leads – of any quality, at any scale, on a timeline, and in a predictable way – is super hard. You start to see the fissures between departments when people forget that.

One revenue plan

Brian: If you could just draw on a whiteboard the perfect planning process for a sales and marketing organization to go through, what would it look like?

There has to be a revenue plan, not a sales plan and a marketing plan

Jeff: It has to be done together. There’s only one plan. There has to be a revenue plan, not a sales plan and a marketing plan. Certainly the tactics beneath the plan can vary, but I want to make sure we’re aligned around the idea that we’re going to generate X amount. And we’re probably going to spend X amount to do it. You have to have a shared objective, which is to get to our number and generate revenue.

You have to build the plan together so that every inflection point – every point that we measure, every definition we use, every way that our systems are set up to capture and display those metrics – and the hand-offs between our teams are 100% aligned. It should get into the details. For example if we are given a customer acquisition cost target, by planning together I can choose to have fewer SDRs if I know that you can use the money I save to generate lower-cost leads. By putting the plan together, sales and marketing can answer, “What are we trying to achieve? What are our boundaries and barriers?” We can then construct the plan to maximize our output and help us accomplish more than what we could have done separately.

So, it’s one plan, one spreadsheet, one set of metrics, one approval process. But we also need to be aligned on the incentives against that plan. You and I should, in a sense, be measured against the same thing, so that anything we decide to work on (or not work on) is meeting both of our goals.

I think the planning just has to be together. And having the financial planning and analysis team facilitate that process of revenue planning is a very good way of doing it. It creates a natural tension where you’re asking, “Is this going to be impactful? How are we going to manage this?” If it’s not our plan, then we can easily point a finger at each other. That’s when you get into the dangerous territory of pointing at each other instead of at the challenge or the problem you’re trying to solve.

How to avoid finger-pointing

Brian: I think we’ve both been in that situation where things have gone awry. Because it’s inevitable that a number will be missed, and while we all like to think we’re altruists who will take on the burden alone, that’s not realistic. Is there a good way to avoid that situation?

Jeff: To your point, you have to start with the premise that numbers will be missed. A plan is trying to predict the future, and if we can predict the future we might as well be in Vegas instead of in a room talking to each other about sales and marketing. You have to be aware that the plan is based on assumptions, and we’re putting together tactics, timing, and objectives against them. Some months we’re going to out-perform, and some months we’re going to underperform. And some months, it’s going to be the complete opposite of what we saw the month before. When that happens, if we have joint KPIs that we can explain together, we keep the organizational lines out of the situation. We can get down to talking about what’s working and what’s not working. We’re going to tackle the problem together.

I believe you can attribute almost every issue in the revenue cycle to marketing in terms of the quality of the leads and to sales execution. You have to step back and take a hard, critical view of the world we’re in — a world where we constantly run the risk of dropping leads, of systems not working. We have to constantly work on driving more consistency and better top-of-the-funnel marketing tactics so that we get the right leads in and nurture them in the right way.

The truth always lies in both sales and marketing. And if you have the culture, governance, and relationships that encourage working together to solve problems, you avoid the finger-pointing. The finger-pointing often happens when it’s not just the two of us in a room, but a CEO, COO, or CFO comes in and thinks, “I need to knock heads and assign blame.” When that happens, it puts both of us in a tough spot. But if we’re truly partners, we’ll figure out a way around it and get back to the business of accelerating our growth.

Modernizing marketing tactics

Jeff: Sales is constantly working on our tactics and tools to stay relevant. What are are some of the things marketing should do to stay relevant?

Brian: Going back to basics and reinventing the game are both constantly happening right next to each other. I often say B2B marketing is boring. For any given campaign we’re going to run, I could probably jot down every channel we’re going to use seven months prior to the campaign. There will probably be an event. There will probably be some ads. Those ads will probably run in a certain number of places. We’ll probably send some emails. They’ll probably go out over an established period of time, with a pretty standard cadence. They will probably have similar CTAs. None of this is where marketing innovation lies, in my experience.

But the really interesting stuff happens when you start to mix those tactics in different orders and different sequences to reach different audiences and get different outcomes. Here’s an example: If I’m trying to get a CEO, I know that CEOs often have administrative assistants. I have two people that I have to influence: the admin and the CEO. My toolkit is the boring one I just shared. But I can now apply it to two different people and hopefully cause them to interact in a way that’s favorable to me and my rep, who’s going to be doing the outreach. Maybe I send a gift to the admin and then two weeks later, I send a package addressed to the CEO, referencing the gift. And I’ve made follow-up calls in between. All I’ve done is make phone calls and send packages, but I’ve gotten the outcome we need.

Meanwhile, maybe I’m trying to affect a director at a small company, and they don’t have a listed number. They also don’t have an admin. The phone tactic is out. In this case, I can swing through the office and drop something off. I might get walked right up to that director’s desk and hand them the gift. Again, we didn’t invent a whole new way of marketing or reaching people, but we’re applying it in the right way to the right person.

Jeff: You guys are taking old tactics, making them modern and seeing which ones work, which is really impactful for us to see in sales.

Sales and marketing incentives

Jeff: One of the areas of tension that exists between sales and marketing teams, is around comp. A high percentage of the compensation for sales reps and managers is tied to an annual result, in terms of deals closed and revenue generated. That’s not really the case for marketing, so what are some good incentives for teams you manage?

Brian: I agree with you that we’re trying to achieve a marketing organization that’s focused on driving revenue for the business (and feeding the sales organization in the right way). Initially, you might have the impulse to create a performance plan tied to revenue – or the closest metric that can affect it, which is probably lead generation. But that’s hard to do because marketing is like a zoo with tons of different animals in it. All those different animals have different attributes: the content team makes such a different contribution to the pipeline than the email team or the operations team. So it gets really challenging to come up with a fair plan to generically apply to all of marketing.

I fall back on two things. First, everyone in my team should have some degree of variable compensation that should either be tied to closest metric they can affect that drives revenue or to some kind of equity that’s effectively tied to company attainment overall. The second thing, which actually trumps the first in a lot of cases, is culture. You can have marketing departments that are revenue-oriented in their culture and you can have marketing departments that are not revenue-oriented in their culture. As a leader, regardless of incentive plan, it’s your responsibility to set expectations for the team that it doesn’t matter that we shipped a new website if we missed our number. It doesn’t matter that we did 30 webinars if we missed our number. Now, those tactics have some long-term benefits that we can’t fully compute at the moment, but the fact is that if the business is failing, marketing is not succeeding. That’s a cultural thing that you need to establish first, and from there you can align incentive comp appropriately.

Keep in mind: you still have to be fair. It’s hard for a designer to affect revenue the way a sales person can, and if you just apply a blanket comp plan tied to revenue, you can sometimes put folks who don’t have a lot of control in very difficult positions because they feel helpless. That’s a really bad outcome because they’re making less money in a given month and coming to me asking, “What should I have done differently to change that number?”

Jeff: You’re right. The people who generate the pipeline for leads are the ones you can most closely align with those metrics. I even question whether parts of the operations team should be on variable comp that’s tied to sales and delivery. The more dots you have to connect, the harder it is to do that. But I think there are opportunities to align incentives across both our teams.

Generating the “right” leads

Jeff: I know I care, but in general should sales care about how we’re getting the leads? Or should we leave it to marketing to get the right set of leads at the right level of buying intent and let you figure out the rest?

Brian: I suppose, if I was good enough at my job, it’s possible that you wouldn’t have to care. However, I don’t think any marketer is that good. The truth is that for me to be effective, you need to care. Because you need to be able to look at what is going on and tell me: “You did what? Why? How? Are you insane?” Or, “Wow, this is really working. Oh my goodness, I’ve been cold calling for six months and it feels like the skies have parted and it’s a sunny day for the first time and I’m getting some traction and building pipeline.”

The earliest indicator that you’ve got the right leads is happy sales people

Eventually, if your systems are set up right, you see the results in your CRM and in the pipeline reports. But the earliest indicator that you’ve got the right leads is happy sales people. The canary in the coal mine is a bunch of SDRs that are making money. Or, in the case of a product-oriented business, it’s a bunch of trials that have just come through the pipeline. That stuff is going to be visible so long before your company ever actually makes money. And you need to be tied to sales to get the flavor of what’s going on.

Most of the best sales reps I’ve worked with are secretly marketers. They’re testing different headlines for their emails. They’re playing with different calls to action. I knew a great salesperson who used to send out his own direct mail campaigns. I told him, “I have an intern here. I have budget. Let me send this for you. I won’t even change anything. I’ll just lick the envelopes and put the stamps on.” He said, “No, this is my process. I like to touch the marketing. I like to know what my people got in the mail. I like to know what they’re interacting with.” Those are great attributes, and you can learn the most as a marketer from the people doing the work, as long as they take an interest in what you do.

Jeff: I agree with you there. I think sales reps should understand how things come into their pipeline and how to hone the tactics along with their partners. I love it when sales reps go up to the marketing floor and say, “Hey, I see you’re doing this event or this webcast. How can I help? How can I get involved?”

How to diagnose lead issues

Jeff: I know we want to be great partners. But let’s imagine that sales is feeling like they’re not getting the volume or quality of leads they need in order to hit their numbers. What are some areas you can try to dissect and understand what may be going on and, most importantly, take some action?

Brian: The first thing you want to do is go where the volume is. It differs by business. At Intercom – because we have a product you can buy with a credit card, and a large percentage of our sales comes from that – the thing we can do is to affect the web experience. Has something changed there? Or could we make a change to improve? That’s where the volume is, and that’s where a small change can make the biggest difference.

Unfortunately, there’s not always an obvious answer about where the volume is, and that’s when people start getting into the idea of growth hacks. I don’t believe in growth hacks. I think the term means that you’re sacrificing some long-term good for some short-term benefit, and that’s rarely the right thing to do.

If there is no obvious change you can make where the volume is, then I start to look at my secondary and tertiary channels for things that have not been optimized, especially in a growing business or in a large business that’s been around for a while. You have all these initiatives that have been done – all these things that were “good enough,” so you never really squeezed all the benefit to the business out of them that you could have or should have. We were in this situation recently, where I was overseeing a channel we had implemented. It was performing well so we stopped paying attention to it. A couple of months go by, and I’m looking at our portfolio thinking, “How are we going to get to the next spot?” Suddenly, it dawns on me that we never actually went step by step through the channel and made sure that it was set up right. We just never had time. We never bothered. And if we just go back and fix those things, it’s almost like getting free money. You’ve done all the hard work of implementing a process or a channel, but what you haven’t done is the harder work of seeing it through in a very detail-oriented way to get the benefit you want.

Brian: What about for you, Jeff? If every indicator is showing that marketing is doing their job, and maybe something’s going wrong in the sales funnel, how do you think about diagnosing the problem?

Jeff: The tension that exists in sales is that we’re very action oriented. If we’re a good, modern, data-driven, analytical sales team, we’re constantly looking at dashboards and trends and metrics on a daily basis and staying on top of conversions or first-response time. We also spend a lot of time looking at the individual performance differences between great reps and ones that are struggling – between offices, between sales managers, between geographies. Because there is so much data about sales activity, it’s hard for us to hide behind poor execution.

I would go back and look at a lot of the same things that you would: Are we converting at the same rate? We’re going to go look at the basket of leads we’re getting. We’re going to go look to see if people have left or if we’re ramping up a whole bunch of new reps. Are they doing the things we want them to do? Are they following the playbooks? Are they on top of first-response time and the other metrics? Is the quality of their interactions where we want it to be?

We also look at process change. A lot of times, things get put into the process or the workflow that we aren’t necessarily aware of. Or more directly, we’re not aware of the potential downside of the complexity or the inefficiencies we may have introduced. Marketing might have done a big event that was mostly about building brand and loaded up a thousand new leads and told the SDRs they have to go in and work those for this whole week. That will explain some of the leads not getting into the sales pipeline. So it comes back to back to alignment between our two groups and making sure we’re focusing on the right things.

If we see metrics that are often trending the wrong way, we have a responsibility to dig in, understand what’s driving them, and correct them. That could be through enablement and training. It could be through making some tough personnel decisions. Or it could be people like me or a CRO jumping in to review our pipeline and forecasting to make sure that we get the rules of engagement right.

Are we doing what we’re supposed to be doing? Has there been a change of process that’s impacting this? Do we have a shift in the mix of the people we have, and if so do we need to think about enabling or ramping or re-educating? Do we have something we can fix with technology? And if that’s all fine, you and I need to think about the bigger picture of what’s changed with our competition, or shifts in the market. It’s important for both our teams to constantly be on top of the metrics. I shouldn’t have to tell you that leads aren’t getting to where we need them to be, and you shouldn’t have to tell me that our conversions are trending in the wrong direction.

We’re on one team, one plan, one set of metrics, one set of dashboards, and we’re constantly reviewing them together. That way, things come to light far before we get to a point where we’re screaming and yelling at each other to fix them. When we work together, great results follow.