Why it Matters:
"The sales pipeline, aka the sales funnel is the long-standing measurement of the past, present and future for a company. Manage it well and the customers and shareholders are happy, manage it poorly and the company never reaches expectations for either one."
In the not too distant past marketing dumped demand into the beginning (top) of the pipeline and sales took responsibility for the rest of the process.
For years marketing has chipped away, usually unintentionally, at various steps of the sales pipeline to aid the salespeople. Most of this is made possible by marketing automation and telemarketing being managed by marketing.
After reading some of the more recent research from Velocify of late and comments by people I respect, I think that the sales pipeline ownership has finally shifted from sales to marketing. Marketing in more sophisticated companies probably manages more than 50% of the pipeline steps now and to me that means ownership has shifted.
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This is the literal, authentic transcript of the interview.
Permission is given to use quotes if credit is given to, Does Marketing Own the Pipeline, James Obermayer and Paul Roberts on SLMA Radio., March 1, 2018.
Paul Roberts: Welcome, everybody. It's time once again for another episode of SLMA Radio. Brought to you on behalf of the thousands and thousands of members of the Sales Lead Management Association. If it has to do with sales lead management or sales lead marketing, it probably starts here with the SLMA Radio Show.
Today, as always, we're privileged, honored, excited to have with us the founder and executive director of the SLMA, Jim Obermayer. Hey, Jim.
James Obermayer: Our announcer for this program, as all of you know, and commentator is Paul Roberts. This is a live program, and listeners can call in at (949) 330-7762 with thoughts, rants, and stories.
The whole programs are available as podcast replays from iTunes, Stitcher, Funnel Radio, the SLMA Radio site, and the B2B Podcast Directory.
Next week, we have Mark Godley on, from LeadGenius. He's going to be our host for SMLA Radio. After this program today, we've got Rooted in Revenue, and after that, Pipeline Radio, and Jill Konrath is going to be interviewed by Matt Heinz. We've got an interesting lineup today.
Coming up now, today's program, this is the title, Argument: Does Marketing Now Own The Pipeline? The sales pipeline, a.k.a. the sales funnel, is the longstanding measurement of past, present, and the future of a company.
In the not too distant past, marketing dumped demand into the top, the beginning of the pipeline, and sales took responsibility for the rest of the process. In many companies, it's still that way.
For years, marketing has chipped away, usually unintentionally, at various steps of the sales pipeline to aid the sales people. Most of this is made possible by marketing automation and telemarketing being managed by marketing and the beginning of the marketing automation program managed by marketing operations managers and companies.
After reading some of the more recent research from Velocify of late and comments by people I respect, I think that the sales pipeline ownership has finally shifted from sales to marketing, and I'm going to make the case for that. [inaudible 00:02:48] with us a little bit later, in about an hour and a half today, was gonna join me today, but he's at a conference, so we're gonna tackle this again in a couple of weeks.
Marketing, in more sophisticated companies, probably manages more than 50% of the pipeline steps now. And to me, that means ownership has shifted. Paul, weigh in on this. What do you think about that?
Paul Roberts: You know, it's a fascinating idea. I think it goes to an even bigger question that you should do a show on as well, that we've talked about on other episodes of other shows on this network, and that is, in a world of big data, who owns the overall data? Not just the sales pipeline data.
Your TV's going to start telling the manufacturer what channels you're watching. Your toaster's going to tell it how often you turn it on and off. You're going to have this flood of data coming back from all these devices and this flood of data that's going to be collected over the internet to be analyzed, about every customer and every transaction.
Whose job is it to collect and analyze that? Is it marketing, is it sales, or is it some new department, the data department?
James Obermayer: Well, it's the marketing operations department in most companies, which is gaining larger and larger strength and may eventually outweigh or out heavy, so to speak, have much more influence than the product marketing people.
Paul Roberts: It reminds me of what Matt [Heinz 00:04:13] always talks about. Marketing use to be ... When I was in marketing, it was what he derisively calls the "arts and crafts department". It was there to come up with brochures, and ads, and logos. It was there to generate some leads, but as long as we got something flowing through the pipeline, that's about as far as we went when I was in marketing.
We didn't worry about quality. It was quantity.
James Obermayer: It's changed quite a bit. HubSpot recently reported that more than 50% of marketers devote at least half of their total marketing budget to lead generation.
Paul Roberts: Wow.
James Obermayer: In many companies, it's a lot more than that. Almost a quarter of the marketers don't know ... But I think it's a lot more than a quarter, maybe only a quarter of HubSpot's customers, but it's a lot more than that in the average company.
[inaudible 00:05:05] leads can increase sales by more than 20%. The reality is, you can get two or three hundred percent increase in the actual conversion. Two or three hundred percent sounds like a lot until you really measure it. Out of a hundred leads [crosstalk 00:05:20]-
Paul Roberts: You've been a sales manager and an interim sales manager at a variety of big companies. I always smile because you say the first thing, when you step into these new roles, to increase sales is just to get them to follow up with every lead.
James Obermayer: It's really interesting, simply because marketing has assumed so many roles in the traditional pipeline. Now, let's take a look at what a pipeline is. A pipeline is a series of steps in most CRM companies, correct?
Paul Roberts: Yes.
James Obermayer: It's awareness, interest, consideration, intent, evaluation, and purchase. Some companies, instead of A to F, have A to Z. They've got a lot of steps in there. They may throw in demonstrations. They may throw in reevaluation. All kinds of things, but most CRM systems beg for steps. That's the sales pipeline.
In our early marketing days, we used to dump everything in the top of the funnel and then step away from it, right, Paul?
Paul Roberts: Exactly.
James Obermayer: It was sales' responsibility to take care of the rest of the funnel. Now that marketing operations is taking control and marketing automation, it's become common for the marketing people to start taking a look at, "Well, it's only awareness, but I'm going to help on the interest areas. I've got that content marketing. We're going to pound into those people who show specific interest in specific products, sizes, shapes, colors, whatever it might be.
Oh, they hit consideration level? Then we're going to give them a totally different group of content. It may be telephone calls. It may be emails. It may be invitations to webinars. We're going to bring that along any further.
Oh, they've got an intent now? Well, I'm probably going to go ahead and give them totally different emails and content based on their voiced intent."
Well, gee, we're 50% of the way through the funnel. At that point, the marketing's controlling the funnel.
Paul Roberts: Let me ask you a tough question, then. Through those early stages, as you said, marketing's job, we were the arts and crafts department. We came up with the pretty ads, the pretty pictures, the clever taglines, and that supposedly created a direct response. People wanted to reach out and know more.
Then we just collected those, dumped them in the top of the funnel, and stepped back. Now you're saying as they progress through the funnel, we're continuing to engage with them with different content, different messages, and keep feeding them, pushing them through the funnel.
Will marketing people ever be responsible for actually talking to the customer? For calling them and pre qualifying them?
James Obermayer: Well, they are now, yes. I thought you were going to go to the next step, which is actually making the sale.
Paul Roberts: Well, that, too, yes.
James Obermayer: Yes, in many companies, like [Madison 00:08:12], so many other companies out there, they're responsible for not only qualifications, but taking them all the way through. Some of the big consulting firms out there talk about, and have for several years, about three years now, that 70% of the people who inquire about a product have already looked at the product in depth, gotten literature, been on the website, and now they're ready to talk to a salesperson.
That tells you that marketing is already addressing 70% of those prospects' needs in some way, shape, or form and the salespeople are getting into it after the person says, "Look, I already ... Don't waste your time with telling me about all the features and benefits. I only want to know one or two things. I want to nail down your price, and I want to nail down your delivery, and I want this proposal in the next three days. I don't need anything else from you. I'll make my decision."
Salespeople are just sitting there, saying, "Whoa. Well, who did all that? Who got them there?" Marketing.
Paul Roberts: So what is the role of sales in this new process?
James Obermayer: They're the closers.
Paul Roberts: They're just the closers.
James Obermayer: They're the closers. Now, they don't like to hear that because they obviously have to take people through demonstrations. They've got to take people through evaluations very often. That's all part of it, depending on the product that's being sold, but if it's not software, if it's other hardware, those things are knocked back.
We're talking about software, yeah, you've got evaluations, you've got trail periods, all those kinds of things, but once you get away from software and it's into hardware, it's in the medical devices, it's in the machinery, it's into industrial goods, they take people through marketing is really responsible.
In many respects, marketing is actually running the inside sales department, and they're completing the sale.
Paul Roberts: That's what I was going to say. What if somebody, through those early stages, decides to step up, and just ahead, and say, "You know what? I don't need to talk to sales. I'm ready to buy right now."
James Obermayer: Yep. If they've got the price and there's no negotiation, they jump right into it. Now, there is something else, in the last couple years, called pipeline marketing. Pipeline marketers say they don't just focus on the top of the funnel, they focus on fewer leads coming into the funnel and the intense working of all those inquiries all the way through to the bottom with the sales people.
To me, that also smacks of what's currently going on. We'll probably have pipeline marketers screaming, sending us email messages, and etc., but the reality is, I think they've just renamed what's been going on all these years. They make a big deal out about tying marketing to sales, but that's what marketing is supposed to do to begin with, tie the product interest to sales, right?
Paul Roberts: Exactly. I've got another question, then. You're prompting all these. I know you have a process you're trying to get to here, but you keep raising all these issues. If marketing is becoming more sales functioning, if they are engaging more with the customers beyond the initial lead they generate, will they ever have to change their compensation plan, as you talked about many times?
Right now, they get paid whether they close deals or not. Whether those leads turn into sales or not, they get paid for the process. They don't get paid for the results.
James Obermayer: Yes, it is changing. As I look at titles for marketing people, Paul, and we run salaries, we see a lot of bonuses thrown in for a lot of the marketing titles. Sometimes, that's for on time performance for what they're creating, but many times, I also think depending on the role, it's also tied to the sales figure that comes in.
For some years, it was just inquiries coming in. Then they started to pay marketers for qualified inquiries. Then the marketing department started managing the inbound telemarketing department and the qualification department, two different ones. Then they started managing the outbound departments, which calls and create leads, because sales didn't want to manage any of those departments.
Those people require way too much attention for an average sales manager. They're paying those people on performance, so your answer is yes, many of them are getting paid on performance and a lot of CMOs get their bonuses based on revenue, the constant revenue that comes in. If they make their goals, they're going to get paid on those revenue figures.
Paul Roberts: Wow. Well, again, that's a major shift. I think that's one of the reason marketing and sales always function different. The marketing people were there to create something and to have it to generate some leads. They weren't paid on whether those leads are good or turned into revenue. Therefore, it was all about how many can you crank out?
James Obermayer: In smaller companies, that's still the case. The bigger the company, the more likely it's going to be shifting to those pay-for-performance metrics, especially on consumer, B2C.
I know we've got to take a break to pay for some bills, at Matt Heinz would say on his program, so why don't we take a quick break here and we'll hear from a few of our sponsors. When we come back, Paul and I will continue to discuss, does the marketing department own the pipeline versus the sales department owning the pipeline? Is that the future?
Paul, over to you.
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All right, back to Jim and his fascinating look into his crystal ball at the ever changing world of marketing.
James Obermayer: Yeah, the question is, the argument is, marketing now owns the pipeline. Is that the case? Hey, I just came back from the exhibitors' show in Las Vegas. There were half a dozen companies on the show floor, just talking about managing sales leads, but there were a lot of sessions at the exhibitors' show in Las Vegas about marketing ROI.
How you can prove it. How you can measure it at trade shows. Two years ago, there wasn't squat there, to speak of. In fact, I did a couple of them, one that we did with Victor, over at [Valigar 00:15:28]. Also, I did another one in the morning with Matt Hill of the Hill Group, how to train people, how to get the most out of your trade shows.
It's interesting, when I looked at the program, there are all these sessions on marketing ROI now. That's because trade show leads are some of the best qualified leads you can create. Who creates those? Exhibits manager.
Exhibits manager's the most powerful person in most companies. They create the most qualified leads. The qualified leads always turn into sales at a greater level. I content that the exhibits managers, pound for pound, create more revenue with a company that anybody else.
They're a marketing person. They're not a sales person. The sales people close. I've been in sales for years, managed sales people for 25 years, but they're losing power. Without the marketing departments today being driven by marketing automation, telemarketing, scraping the internet for prospects before they even raise their hands, using artificial intelligence to figure out what people want and where they're going, sales is turning into the closer, and that's about it in many industries.
What do you think, Paul?
Paul Roberts: So let me ask ... If that's true, that's a shocking turnabout from my days back in marketing. I don't doubt it is, because again, we've got more data and more ability, more demand to connect with the customer through everything. You don't just ...
One of the things I talk about all the time is, the demise of direct response. You used to run an ad and then count the number of calls you got. You used to run a coupon and count how many came in.
Now, all it does is drive people to either want to learn more, so you've got to have something to follow up with, or it drives them to your website, at which point, you've lost how people came in. You can ask them, but they're not going to say, "I saw your billboard. I read your white paper. I listened to your radio ad. I saw you at a trade show."
They're probably just going to come there and anonymously start searching, so how do we figure out what's working and what's not? We need data. We need information. All that seen, as you're saying, the growth of the marketing wing.
My question is, what are the sales people doing? Are they just surrendering? Are they accepting this new role as the closer, because it's just easier, or are they fighting back and saying, "Let us be part of the process," and if so, how?
James Obermayer: They don't have much to fight back on. The last two or three years, most of the reports coming out of the industry said there's fewer and fewer outside sales reps being hired. These are route sales people and people go out and see people.
A lot of those jobs are shifting because of marketing or travel expenses to inside sales positions. Inside sales departments have been reported as growing year by year, so people are putting on more people to qualify inbound calls, qualify inquiries, do the demonstrations that sales people use to do.
The systems engineers that get on the phone to go ahead and help the prospect make a decision, and finally, the sales people who are supposed to control all this. Certainly, sales people are still involved in customer marketing, but inside sales departments are really inside marketing departments.
Paul Roberts: That's what I was going to say. Are they under the oversight of the marketing people? Are they being managed by the chief marketing officer?
James Obermayer: Still the sales manager is managing all this, but he or she's got fewer and fewer outside sales people, depending on the company. So many of these roles are shifting to the inside departments now.
Certainly, sales managers might control inside sales departments, but most of them don't want to. They've got somebody else that controls it, because these people ask for too much attention. They get too much rejection. It's very difficult to manage them versus outside sales people.
Very often, just because of them giving up, those departments are often managed by marketing people. As soon as they give that up, they've given up authority. They've even given up power. It doesn't mean they don't still have jobs and they're still not accountable, but it's not what it used to be.
Paul Roberts: It's a different personality, though, isn't it, to do an inside sales job, to be on an order desk, to sit in a cubicle and take calls all day long, than it is to go out and visit customers, and wine and dine them, and handle their needs?
James Obermayer: Yeah. The inside people have totally different talents. They're 100% different. Paul, they can be sitting there with a full beard and a t-shirt and be making sales. Oh, that's what you look like today. I'm sorry.
Paul Roberts: Exactly.
James Obermayer: But they can be sitting there and nobody cares what they look like. They just care about their voice and how much information they have to impart. Can they do the demo? Can they answer all the customer's questions?
Sales is continuing to be under pressure as marketing continues to gain influence. Influence is driven, I contend, by the marketing automation, artificial intelligence, the rise of the database marketer-
Paul Roberts: Yeah, and big data in general. We're going to have more data about our customers than we ever had before. I don't know what we're going to do with it all, but we're going to know much more about much more predictive analysis about what is likely to influence them, based on the data we collect on their past behavior.
James Obermayer: Look at some of the people we've had on the radio programs in the last six months. We've had some really interesting people. Laura Patterson, president of VisionEdge Marketing. Really bright, really looked at those databases.
MariAnne Vanella, Vanella Group, tunnel marketing. Qualified leads. She only takes on certain clients. She's very, very careful what she does.
We take a look at Jill Konrath. She's going to be on the radio program with Matt Heinz in couple hours. Rhoan Morgan, she's at a DemandLab. It's a marketing company, a demand generation company.
It's really quite interesting.
Paul Roberts: Jill Konrath's a good example-
James Obermayer: Katie Bullard. Katie Bullard, chief revenue officer, discoverorg.com. Big database company.
Paul Roberts: Fascinating. If you haven't heard Jill before ... I've heard her on some of your shows over the past few years. Fascinating discussion. She really thinks it's all about, if I'm not mistaken, social selling. It's all about how do you engage with your customer when they're just sniffing around.
How do you get them to believe that you're the best, and you've got the answers and the solution, and for them to start a dialog and a conversation with you? The kind of thing no sales person would ever want to do. I don't want to just answer your questions.
James Obermayer: That's a big part of it. You mentioned database. Back in December, we had Anna Fisher on, head of lead generation at ZoomInfo. They're a lot like DiscoverOrg in that they have huge databases, the customers buy the databases, they guarantee the accuracy of the databases, and they run marketing programs.
That creates the sales. It's a changed market and I believe that marketing management is in the most powerful position they've been in since the 1920's.
Paul Roberts: Wow.
James Obermayer: Which is nearly 100 years. They're in the most powerful position in B2B marketing and B2C marketing, because they are controlling so much of the pipeline.
Paul Roberts: Again, to go back to Matt's analogy, which I love, the people I met in the 80's and 90's ... It's hard to believe it was that long ago, but the 80's and 90's, when I was doing marketing for companies here, they were creative types.
They were ad agency types. They were PR types. They were people who were imaginative and creative. They were the arts and crafts department. They came up with the clever ideas to get people to notice a product and to show interest in it.
They were not the people who were analytical and data driven, so I would suspect you're losing some creativity. Are there still creative people in the marketing process?
James Obermayer: Oh, yeah. You've got great creative directors at agencies. You've got great creative directors at direct marketing companies, which are doing well, believe it or not. You also have a different kind of marketer, who is both creative and they're also math marketers.
Paul Roberts: Yeah, like Matt Heinz. I think Matt Heinz is an example. He always talks about both sides of the brain you have to use.
James Obermayer: Yep. They're using the numbers. They look at the total number of inquiries, qualified leads, what turns into demos, what turns into the final presentations, and the marketers today are interested in all those numbers.
Versus before, they just said, "I'm interested in the top of the funnel. I don't care what goes on," then they complain bitterly what goes on all the way through the rest of the funnel. It's really quite interesting how they back away from things.
A couple days ago, I had a blog up on the SLMA website, "The sales person didn't do it is just a marketing excuse". Marketing used to say, "Well, my program's are great. It's the salespeople that aren't doing their job." I used to use that mantra constantly while I was a consultant, but the reality is, today it's the marketers that are doing the follow up, the marketers that are doing the job.
Paul Roberts: So they've got no one to blame but themselves if they're leads aren't turning into revenue. They're now held more closely accountable for the quality of the leads, not just the quantity of the leads.
James Obermayer: I said in the blog entry, "It's marketing's role today to go beyond just filling the top of the sales funnel. The role has changed to fill and manage it most of the way into the funnel, until the prospects show, from their actions and responses, that they are in the buyer zone."
Paul Roberts: Amazing.
James Obermayer: It's getting into the buyer zone the salespeople have to take control of that last step or two.
Paul Roberts: Will they ever take over the whole process and become the closers themselves?
James Obermayer: Yeah, I think they are. Many are already. Where it used to be the head of sales and marketing, pretty soon you're going to see a lot of titles that revert to the head of marketing and sales. It's going to be a little different marketplace.
Hey, I know we've run out of time today. Paul, thanks a lot for stepping in. As always, you've got deep marketing knowledge, deep PR/sales knowledge-
Paul Roberts: I feel like a caveman when I talk to you about this stuff here, because what I experienced is a whole different world. This is a brave new world we've entered into. It's amazing. I really believe you're on to something. The two halves of the puzzle are shifting in power and they're going to shift in titles. It will be the director of marketing and sales.
James Obermayer: I think we've answered that question today. I think marketing now owns the pipeline. Paul, let's hear from Rooted in Revenue, our next program. Thank you, Paul, for your thoughts, and kind thoughts today, and deep analysis.
Paul Roberts: Thanks for your [crosstalk 00:26:29]-
James Obermayer: Boy, it really paid for you to be the owner of that Irish bar in Newport Beach.
Paul Roberts: It sure did. I don't know how.
James Obermayer: You're always willing to listen across the bar.
Paul Roberts: That's right. Exactly.
James Obermayer: Paul Roberts, thank you very much.
Paul Roberts: Well, you've been listening to another episode of SLMA Radio. Brought to you on behalf of the thousands and thousands of members of the Sales Lead Management Association. If it has to do with sales lead management or sales lead marketing, it probably starts here with the SLMA Radio Show, one of the many shows on the Funnel Radio Network for at work listeners like you.