Most service providers like to say they “eat their own dog food.” Not Jon Miller, co-founder and VP Marketing of Marketo. Miller prefers “drink your own champagne,” and not just because it sounds classier. This preference is based on the stunning fact that Marketo is according to Miller, “currently the fastest growing software-as-a-service company in the world,” a feat accomplished by using their own software to turn marketing into a science.
Founded in 2006, Marketo already has over 1,000 clients, who pay just under $30,000 per year with the goal of improving the yield of their marketing activities. Miller and his team rejected the notion that marketing was an art form, relegating that to the “Mad Man” era, preferring to focus on “process and analysis,” and in doing so delivered to this interviewer 8 delicious ways to drive revenue.
1. Don’t call a lead before its time
For most marketers, a lead is a lead, entered into a CRM system like Salesforce and treated with equal urgency. According to Miller’s research, this approach means that, “only 6% of leads ever close” and “only half of the sales people make their sales goals.” Having been able to identify key buying signals, Marketo’s system separates leads into two buckets, the 20% who are “ready to buy,” and those that require nurturing.
2. Know the buying signals of your prospects
Just because a visitor to your site gives you their contact information for something like a white paper, doesn’t mean necessarily that they a qualified lead. Explained Miller, “if somebody downloaded our webinars or thought leadership [documents], we know they’re at the early stage.” However, reported Miller, “if you go to our website and see the detailed pricing pages or register to watch a detailed demo, you’re very likely to enter a buying cycle with us.”
3. If they give the sign, call your leads post haste
When all leads are given equal value, they naturally clog up the sales process, wasting the time of both the prospect who isn’t ready and the sales person who then becomes skeptical of all the leads, further diminishing the yield. But if only truly qualified leads go into sales pipeline, the sales force is reading and willing to jump all over them. Added Miller, “if you show buying signs, we’re going to be dialing your phone in 3-4 minutes!”
4. Reward your marketing team more and raise quotas
At most companies, marketing generates about 30% of the leads, which means the sales force needs to be heavily incentivized to not just close but also to find the leads themselves. “At Marketo our marketing team generates 80% of the sales pipeline,” explained Miller. This has allowed them to “radically reduce the salesperson’s risk” and “change how [we] compensate the marketing department.” And because Sales has better quality leads, they close at a higher rate, allowing Marketo to raise quotas and hire fewer sales staff.
5. Focus sales team on closing not educating
According to Miller’s research, at most companies “almost half of the salesperson’s time is spent on unproductive activities.” This includes educating prospects on the category and the product. “This is outmoded thinking,” explained Miller, since today “70% of the buying cycle is complete before the buyer wants to connect with Sales.” Assuming you are providing all the necessary educational material online then you too can “optimize the demand chain” by only giving Sales leads that are ready to be closed.
6. Hire a CRO not a CMO
After all this talk of marketing efficiency, one of the more surprising outcomes of my conversation with Miller was his suggestion that companies hire a Chief Revenue Officer and place Marketing and Sales underneath that person. Explained Miller, whose company just hired a CRO, “I don’t believe you can have a CMO and a CRO.” This is not “a glorified Head of Sales,” added Miller, but someone who can lead “a fundamental transformation about how you think about generating revenue.”
7. Nurture all your other leads
While the bulk of this conversation has focused on identifying and converting hot leads, this is only half the secret to Marketo’s success. The other half is the recognition that today’s tire kickers are tomorrow’s buyer as long as you have a strong “nurturing process to educate and stay in touch with them over time,” noted Miller. He added, “a full half [of our leads] are coming from seeds we developed earlier.”
8. Invest heavily in content development
When explaining Marketo’s success to-date, Miller revealed that they invest heavily in marketing, spending three times the ratio of most companies but because of their lead conversion rate, they are also more efficient and profitable than these other companies. A huge portion of that investment goes into content development including webinars, white papers, blogs and social media. In addition to creating “a lot of inbound leads and SEO, [this content] also helps to build trust and credibility with buyers who are starting to perceive us as innovators and thought leaders,” explained Miller.
Final note: A magna cum laude physics major at Harvard, Miller’s desire to find the math in marketing shouldn’t be all that surprising. What may come as a surprise is the extent of Miller’s foresight as exemplified by the fact that he “actually started writing [his] blog before writing any product.” For more on Miller, see my follow up interview on TheDrewBlog.com.