Middle of the Funnel
I was on a call with the director of revenue operations of a 200 employee company recently.
She reached out to me because she wanted to know more about the time we nearly destroyed my entire revenue team. (https://blog.saleswhale.com/
“I really liked your article. It really resonated with me and the issues we have been having internally. This is exactly what’s happening in our company now, and we have had a civil war for months.”
She wanted to convince the leadership to wean off the MQL drug, and to focus on “demand gen” over “lead gen”.
“86% of the leads we passed to sales last quarter were unqualified. This was terrible for morale. And ruined the credibility of our marketing team. Can you tell me about the tactics you guys used? How did you actually transition from lead gen to demand gen?”
I felt a wave of embarrassment. What could a Series A company of our size possibly teach her?
But I thought it would be useful to share our challenges honestly. And not portray a "Potemkin village" facade which most transformation stories do. The marketing world is full of narrative fallacies.
“We made this bold, visionary shift. And immediately after, everyone is blissfully happy and nothing could be better.”
We’ve hit lots of roadblocks and bottlenecks along the way. And we certainly haven’t figured everything out. Maybe the journey, struggles and challenges could be useful too.
So, here we go. Here's a summarized version of our conversation with all the gory details.
What were the first things you started doing differently when you decided to shift from Lead Gen to Demand Gen?
The first thing we did was to stop measuring the marketing team by MQLs.
Our marketing team at the beginning of 2020 were obsessed with MQLs.
Marketing constantly pointed fingers at Sales for not following up with their MQLs. Sales kept complaining that the MQLs were shit.
The conflict kept getting escalated to the CEO. Marketing wanted me to withhold commission from Sales until they were accountable for the MQLs. Sales wanted me to fire the Marketing leader because “all he did was generate crap leads.”
Here’s the thing. Humans are weird. We are susceptible to Goodhart’s Law.
The aphorism "you make what you measure" is true, so measure carefully.
The first hard decision I made was to get Marketing to stop using MQLs as a success metric. And force them to stop reporting MQL numbers to the rest of the company (especially the sales team).
“Look, you can talk about MQLs all you want internally in Marketing meetings. Use it as a leading indicator, use it to debug your funnel, whatever. But, let's nottalk about MQLs during Sales syncs, Board updates or company KPIs.”
We decided to measure ourselves by Stage 2 pipeline - sales accepted opportunities with the right decision maker and right pain point. If we don't hit our Stage 2 pipeline goals, even if we crush our MQL numbers, we considered that as a fail for Marketing.
Remember the truism on "you make what you measure"? A lot of pieces started to shift the moment we changed our measurement. The marketing team started to relook at all their initiatives.
Happily ever after, right?
Nope, my Marketing leader resigned 3 months later. You don’t hear about these casualties when all the bold “B2B influencers” share about their marketing transformations, do you?
Eventually, we would grow the confidence to go even further, and measure Marketing entire by marketing-sourced closed-won revenue, but that's a story for another day.
What are the tactics you guys used to make the shift from lead gen to demand gen, concretely?
We broke down demand gen into two strategies.
The first thing we did was to sit down to interview the Sales team and really listen to them. Which was an oddity for us at the time.
The next thing was we got the Marketing team to attend live sales calls, and also systematically listened to Gong calls -- closed-won deals, closed-lost deals, stuck deals etc.
The goal was to figure out the difference between hot and cold prospects and try to close the gap with Marketing instead of relying on raw sales prowess.
Here’s an example.
We figured out that one of the highest propensity, solution-aware segments of leads were leads who started an evaluation process with our largest competitor called Conversica. We also noticed our sales team were having trouble articulating our differentiators succinctly and repeatedly.
Yet, we also noticed high win-rates in this segment -- almost a standard deviation higher than any other segment. Time to double down.
We interviewed a few customers who chose us: “Hey Mr Customer, why did you choose us against Conversica?”
Selected the three key points that we felt were most compelling, and put up a landing page: https://www.saleswhale.com/
We trained the Sales team on these 3 points and got their buy-in to use the same message.
We set up Gong competitor alerts whenever “Conversica” is mentioned on a sales call.. And then we send HubSpot marketing emails to these prospects after the demo with a link to the above landing page.
The more interesting strategies were around Creating Demand though.
How do we get people who have never heard of us, are not in a buying cycle for an automated lead conversion solution, who are not solution-aware, and probably not even pain-aware… and get them in front of the Sales team, ready to open their cheque books?
We decided to focus our efforts around a two-pronged strategy: building affinity, and reducing friction.
In the past, when we marketed in awareness channels, we were in “lead gen” mode.
"How do we collect more email addresses?"
We gated our forms, our on-demand webinars, eBooks etc. And this created a lot of junk leads.
We made a bold decision to get rid of all our gated forms. There was some contention around an eBook the marketing team spent 6 weeks to produce.
“You mean after all these money, time and effort spent producing it, we are just going to give it away for free, and not even get an email address in return?”
In the end, we decided to convert the eBook into a long-form blog post - which hopefully served as a worthy tribute to the SEO gods.
We also started to create valuable content with thought leaders in the space. Content like our Masterclass series (https://www.saleswhale.com/
And we gave it away all for free.
No gated forms, no need to submit an email address. The entire video series, transcripts and all, is free for all to consume.
I believed this built a ton of affinity for our brand -- because we would hear our content being mentioned time and time again on Sales calls.
“I first heard of you guys because of your Masterclass. I really enjoyed your content.”
Did you see a decrease/collapse in leads?
The truth is, yes. Not just in terms of raw leads. But also in revenue and net-new sales opportunities in the first 3 months.
This was really scary.
And I have to admit, my faith wavered for a bit. There were many times I was tempted to revert all the forms and go back to “lead gen” mode.
But slowly, in the weeks and months following, we slowly started to see ICP demo requests go up. We saw shorter sales cycles, higher win rates.
Our sales team validated that whatever we are doing was working.
“Whatever you guys are doing now, don’t stop.”
It took courage and conviction, but I’m glad we stuck it through.
What didn’t go so well?
The efforts were too little, too late to repair a fractured revenue team. We churned through our marketing leader and a couple of sales reps before we managed to get our act together.
It was not all roses and rainbows, and pretty scary at that time.
What other concrete tactics did you deploy?
A lightweight ABM campaign which I detailed here: (https://blog.saleswhale.com/
You mentioned about Marketing taking over SDR duties. What’s that about?
Marketing took over “SDR’ing”.
It became Marketing's job to follow up with the leads and MQLs, since we are no longer measured on just creating them. This was controversial at the time.
We wrote the sales sequences and messaging ourselves. We experimented with dozens of value propositions and insertion points for various personas.
It gave us a high degree of control because we could test and experiment for resonance, without having to bother the sales team.
The goal was to put meetings on their calendars, so that the sales people can just focus on having sales conversations.
Tell me more about how you pivoted your gifting program.
Back then, we experimented with gifting in exchange for demos ($100 DoorDash gift cards, Starbucks gift cards etc.)
While they worked to a certain extent, they were really expensive. And the sales reps would complain that “The guy only took the demo because he wanted the gift card. What are you guys doing giving us such shitty demos and wasting our time?”
One of my philosophies is that customer advocacy is a huge part of demand gen. So we pivoted. Rather than using gifting to secure demos with net-new prospects, we would send gifts to existing customers and users, for no other reason than just to thank them for being such a great customer.
It was a pleasant surprise when some of them started to post our gifts on LinkedIn, further amplifying our brand to their network.
I can’t speak to concrete figures, but the ROI from this customer love and advocacy was certainly higher than giving away a $200 gift in exchange for a cold meeting.
Now, here are some interesting stuff I've come across (and a secret offer at the end)
What Does Sales Really Want From Marketing? 5,261 People Played CMO for the Day by Adam Schoenfeld
Adam Schoenfeld is the VP of Strategy at Drift, and I follow him quite intently. He runs a podcast called Built in Seattle which is pretty good.
So when he launched a new newsletter focusing on data-driven insights around sales and marketing, I paid attention. Quite a few insightful nuggets, but I wish there were more qualitative data and/or anecdotes from interviewing the front-line sales reps.
Ep 33 - Crushing Your Next Case Study w/ Joel Klettke by The Industrial Marketing Show
I enjoyed this podcast hosted by the fabulous MJ Peters, on creating compelling case studies. While the overall podcast series is geared towards industrial marketers, there’s a lot of relevance and wisdom packed into this podcast, especially on breaking away from the tired and staid method of how many B2B companies do case studies today.
Chaos Monkeys: Obscene Fortune and Random Failure in Silicon Valley by Antonio García Martínez
Not quite marketing related - but this is an interesting one.
I recently picked up a copy of Chaos Monkeys after learning about the controversy around Antonio García Martínez (https://www.theverge.com/
Social commentary aside, he’s a hell of a writer.
And some wayback machine sleuthing on his previous blog posts (interesting tidbit: his blog posts were what led to an acquisition of his startup by Twitter) were provocative and fascinating, to say the least.
I enjoy reading posts like these (https://web.archive.org/web/
My wife and I by contrast, were childhood sweethearts, dated for more than a decade, before deciding to have a kid. And we invested so much time and energy into learning and reading books about childbirth, labor and parenthood even before my daughter was born.
Exclusive to newsletter subscribers: Free tool - AI generated emails that convert
So, we managed to finally get access to the coveted GPT-3 API last week.
What’s GPT-3, you might think?
It’s the most powerful language model ever built by this company called OpenAI - which raised a cool $1 billion from Elon Musk, Microsoft, and others.
You can read more about it here: https://www.technologyreview.
Our team was playing around with the technology, training the algorithm on our best performing email sequences, and the results were shockingly good.
Here's a soundcloud of a few folks I showed our prototype to: https://soundcloud.com/
We are thinking about building a free tool -- using AI to generate high performing email variations to test and experiment at scale -- and are looking for alpha / beta testers. Are you interested to design this together with us, and be one of the first few to get this in your hands for free?
If so, just reply to this email, and I would love to show you what we have built, and ask you some questions so we can add you to the waitlist.
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