The Legend of the Profitable Marketing-Sales Collaboration
By Ginger Conlon | 8.1.18
Once upon a time RingCentral reorganized its operations to align marketing and sales. Its effort to cultivate collaboration between its demand gen and inside sales teams
paid off. The unified communications company increased its monthly recurring revenue by 83 percent at a 12 percent decrease in cost per MRR.
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For far too many B2B marketers, stories of successful marketing and sales collaboration may seem like fairytales. Companies such as RingCentral show
that collaborative marketing-sales success is not only possible, it’s profitable.
And in the current environment of widespread misalignment, it can be a competitive advantage.
Business leaders cite missed opportunities (65 percent), customer frustration
(46 percent), and duplication of processes (45 percent) as the most likely outcomes from a lack of marketing and sales collaboration, according to a study by LinkedIn. In fact, the study uncovered a direct negative impact of misaligned marketing and sales teams, including weaker financial performance (60 percent of respondents), poorer customer experience (59 percent), and reduced customer retention
RingCentral faced its share of those challenges. Prior to reorganizing to improve align marketing and sales a couple of years ago, the company had inadequate communication between the teams, used metrics that were driving sometimes conflicting actions and behaviors, and had flaws in the teams’ shared processes. The company wanted to resolve those issues and close gaps in its funnel management to improve marketing-sales alignment. Central elements of its plan were to improve lead quality and to align metrics.
Quality is job one
RingCentral brought on David Cowings as its chief data scientist to help. When he joined about two years ago, the company was working to link people, leads, contacts, and accounts to a hierarchy of companies so its marketing and sales teams could understand reporting hierarchy and discover who RingCentral’s largest customers actually were, Cowings explains. The goal was to support a shift to account-based marketing and sales. “Sales had been selling and marketing had been marketing [each in a silo],” he says. “We wanted to shift towards unifying all of the disparate data up to a hierarchy of companies and a reporting structure of which subsidiaries rolled up to larger headquarters to enable marketing and sales to have a shared view of customers and align their efforts.”
RingCentral worked with SaleScout to improve and ensure the ongoing quality of that data. “At the time, RingCentral had about 400,000 companies they had determined to be their total available market — these are the companies they want to sell into,” says Chris Lynde, CEO of SaleScout. “Once you go through that exercise to identify your ideal customer profile, then you have to find the contacts you want to sell to.”
SaleScout helped to eliminate what RingCentral calls its white space — i.e., lack of visibility into a key contact. “They needed to have those records found and verified, so we filled in hundreds of thousands of records with a 99 percent accuracy rate,” Lynde adds.
Lead quality is essential in aligning any company's marketing and sales organizations, as well as building and maintaining the trust needed to retain that alignment. “There’s this tense relationship and mistrust between marketing and sales when the sales team tries leads and they don’t work; they aren’t going to come back for more. Sales needs to see conversion, then they’ll trust the leads that are coming in,” Lynde says. “So, aligning those two organizations starts with the technology and the quality of the leads.”
Improving lead quality has helped build trust between RingCentral's sales and marketing teams, Cowings notes. “Keeping that level of trust through high-quality data is definitely key to the relationship between marketing and sales,” he says.
And because lead quality is so vital, RingCentral has implemented strategies for ensuring its data’s currency. “The biggest challenge [with lead quality] is that people leave jobs quite frequently, so we’ve assigned a way of knowing, like a freshness date, to each contact,” Cowings says. “We go through the data at specific times and try to validate whether ‘these people are still employed with those companies.’” Along with ensuring data quality, RingCentral gets the added benefit of knowing when someone who engaged with them is at a new company that might also be on its target list.
RingCentral also uses “contactability” as a measure of data quality. Cowings cites as examples that the phone number actually rings at the right office for the right person, the email address is accurate for a high level of deliverability, and the job title, when sales reps speak to someone, aligns to the job title the reps are expecting when they make the calls.
Are you talking to me?
One essential element of RingCentral’s improved lead quality is normalizing prospects’ titles and roles. For example, clarifying who are the CIOs, CTOs, and other IT decision makers versus the sales decision makers, as well as which branches or divisions of a company they work in, Cowings explains. “We identify the key set of people we want to talk to,” he says. “We want to make sure we have the right people at each target company.”
This is especially crucial not only for RingCentral’s marketing and sales alignment in general, but also for account-based marketing and sales in particular. “It’s rare to find companies where one person makes a decision,” Cownings says. “It’s generally several people across different departments. So, we need to talk to people in finance. We need to talk to people in sales. And we need to talk to people in IT.”
As a result, he adds, RingCentral wants to equip its sales and marketing teams with names of the top five people in the key roles across departments at each target company. Those buyer personas will change based on industry and solution type, to ensure that they have the right audience for discussing key topics such as total cost of ownership, Cowings explains. “This way, we can work on building awareness with those customers and then building up levels of engagement with them, so we can move them through the pipe,” he says.
A view to a thrill
Lead quality has been central to marketing and sales alignment and collaboration. So have shared metrics.
“RingCentral is focused on specific in-depth metrics,” says David Morrison, the company’s senior digital marketing channel manager. “We [in marketing] have to align closely with our sales partners to get the full picture.” For example, if lead conversion is unusually high or low in a particular time period both teams want to know the source of the sudden change. Is a particular rep is doing a great job, or is one lead source dragging down the percentage?
“You need to be able to dig in to the specifics and see what’s causing changes,” Morrison says.” Often that requires me to go to the sales leaders and ask, ‘What are you seeing on this particular lead source?’ Or, ‘What are your people saying about this new collection of leads?’” Morrison asserts that he couldn’t do his without having a tight, aligned relationship with the sales team. “I would almost guarantee they’d say the same thing — that without us over here in marketing looking at these same numbers and being able to answer these questions, they’d have a difficult time doing their jobs, as well,” he adds.
Not all metrics are shared, of course. Each team does need to track their own marketing-specific or sales-specific numbers. But metrics that give insight into processes that go across marketing and sales, such as funnel data, are shared. One shared metric, for example, is number of opportunities in a given quarter from a given channel.
“I don’t just worry about, ‘Well, I got my lead quality done and delivered; have fun sales.’ It just doesn’t work that way,” Morrison says. “We measure everything all the way through the funnel: lead to op, pipeline ops, op to close, monthly recurring revenue from each business; sales, basically. But then we also look at longer-term metrics such as the lifetime value of the business generated from a program, the cost per lead or op, etc., for a particular program, cost per LTV, and lifetime value ratio — that’s the big metric we measure everything by.”
It helps that both teams use tools such as Salesforce, which helps to ensure the accuracy of the metrics. “We’re all on the same systems, looking at the same data,” Morrison says. “If something looks weird, if I’m not calling my sales leader about it, he’s certainly calling me; whoever sees it first.”
Morrison points out that when you’re looking down the funnel, you can’t just look at the marketing piece of it or just the sales piece of it. “It’s essential to look at the whole process of the lead getting generated and delivered, how it gets followed up, how that gets qualified, passed onto an account executive, how the AE works with it to close that business, and then even to the onboarding and where the customer marketing people take over,” he explains. “All of that means that I have to have a strong partnership with sales,” so if they see any patterns or opportuni-ties, they can work together to eliminate any problems or harness more opportunities where leads are converting better.
“Communication helps make the entire process function much better,”
It also reduces friction. “It’s so much more efficient when we look at the numbers, and say, 'We have to do more of that,’ he says. “It doesn’t matter what the CMO thinks versus what I think versus what someone else thinks. The data cuts out a lot of that other discussion that just isn’t productive.”
The protocols of process
Linked through the trust that lead quality and shared metrics bring, the RingCentral marketing and sales team are also aligned by shared processes.
One is, simply, regular communications that keep the teams close. “We meet on pretty much a daily basis,” says Cowings, who reports in to marketing operations. “The sales operations team and marketing operations team work in lock step almost to the point of being revenue operations. We’re essentially one team even though we report in to different departments.”
Another is lead routing — not just handing off leads, but also ensuring that sales reps know the lead source and context, so they can follow up appropriately based on that source and how it’s been qualified, Morrison explains.
“We have a lot of different lead routing rules built into Marketo and Salesforce,” Morrison says. “So, we have a weekly process that checks all that lead routing and then corrects for any misrouted leads.”
This process ensures that the right teams are receiving the leads they’ve been trained on and know how to follow up on, he adds. “I have to believe our lead-to-op conversion rate has gone up since we’ve added this process because we have far fewer stagnant leads sent to a random person who doesn’t have any clue of what it is and probably never follows up with it, versus the person who’s hungry for that lead and can’t wait to receive it.”
This process helps with both quality and alignment, Morrison says. “We’re looking at lead volumes and it’s really clear when something is awry. I’m saying, ‘Hey, you should have gotten 50 of these leads last week,’ and they’re saying, ‘Hmmm, I’m only seeing 35.’ Well, then I can go try to find those other 15 somewhere and get them into their hands.”
The benefits of marketing-sales alignment
All the changes RingCentral has made to better align marketing and sales have paid off. For example, in the case of cost-per-lead (CPL) campaigns, the company has seen an 83 percent increase in MRR, a 12 percent decrease in cost per MRR, and a 66 percent improvement in opportunity-to-close won. Plus, its 12-month bookings have been 330 percent above average.
“We’ve seen definitely higher conversion rates,” Cowings says. He adds that there’s been a 5 to 10 percent lift in the ability to move from MQL to SQL, click-through rates are about 3 to 4 percent higher, and there’s a higher rate of sales qualifying and accepting the leads from marketing. Using SaleScout has improved the data accuracy of attributes such as title, role, and contact information by about 20 percent, Cowings notes. “That leads to a higher likelihood that someone will actually engage,” he says. “We want to ensure that we’re getting the right titles and the right roles, because when we talk to people and when we provide them with content, we want to make sure that that conversation or content is relevant to that individual’s role.”
One of the biggest benefits has been the insights that sharing data has brought. It enables the marketing and sales leaders to look all the way to the bottom of the funnel to see what’s actually driving business on the backend, Morrison points out.
“Where the rubber meets the road is that we’re always looking at revenue numbers and what’s driving the most revenue,” he says. “I might have a lead source where, if you just looked at something like cost per lead, you’d say, ‘Maybe we shouldn’t do that; it’s one of our highest CPLs.’ But, when you look at cost compared to the lifetime value of the business that channel is bringing us, you can see that it’s actually one of our most efficient channels.”
The road ahead
The successes RingCentral has had so far by aligning marketing and sales is just the first chapter of its story. There’s much more to come as it rewrites how marketing and sales collaboration is done.
Cowings is working on enhancing customer and prospect data to make it more robust. “We’d like to tie in information around companies’ growth signals, such as historical hiring trends,” he says.
On a bigger scale, Cowings is working on developing a single source of truth of customer and prospect data that RingCentral can use across IT, sales, marketing, and finance. “We’re looking to see what size a company truly is and make sure we understand that what our definition of company is may not necessarily match the corporation’s own definition, he says. “A good way of looking at it is, if Disney Corporation makes buying decisions for all of its divisions, then we would talk to Disney. But if ESPN is a subsidiary of Disney Corporation and makes its own buying decisions, then we want to talk to ESPN, as well as to Disney.”
As Cowings continues his work on data quality, Morrison is endeavoring to evolve and enhance RingCentral’s metrics. One project is implementing a multi-touch attribution model, such as the Markov model. “Today, we have a first-touch model and a last-touch model,” he says. “By getting to multi-touch, we’ll get a more accurate understanding of the contributing activities that take place throughout the whole process of bringing in a lead and turning it into business. That will give us more insight into all the different touches that can go into a deal, giving more accurate credit to each of the different touches on a particular deal.”
Morrison is also diving into full-funnel metrics to get a better view on a channel level, a vendor level, a segment level, and on an asset level, as well. “We’re
building an easier way for us to get at data that can show, for example, this particular whitepaper generated this much LTV,” he says. This will enable Morrison and others to look at cost against results to see which assets to use more of in which channels.
To be continued…
The moral of RingCentral’s story of marketing and sales alignment? It’s all about the data: Lead quality and shared metrics build trust and collaboration.
“It wasn’t long ago that marketing departments were primarily measured on the volume hitting the top of the funnel,” SaleScout’s Lynde says. “One of the best things that’s happened to marketing is that CRM and marketing automation systems are giving marketers visibility into conversion rates and true funnel metrics.” That’s led to more marketers being measured on the quality of their leads and on actual revenue contribution at the bottom line, he says.
Lynde’s advice: Route leads correctly, build context around them, and train marketers and salespeople on how to follow up with those leads based on that context. Most of all, he says, keep your data clean and current. Says Lynde: “The number one priority for CMOs is to enhance the accuracy of their CRM data.”
About the Author
Ginger Conlon, chief editor and marketing alchemist at MKTGinsight, catalyzes change in marketing organizations. She is a frequent speaker on marketing and customer experience, and serves in advisory or leadership roles for several industry organizations. Ginger was honored with a Silver Apple lifetime achievement award for her contributions to the marketing industry.