Sr. Director, Global Marketing Operations| LogRhythm| LinkedIn
How to Increase Conversions Across the Funnel
Highlights from this Episode
Highlights from this episode
In this first episode, Mike McKinnon, the Senior Director of Global Marketing Operations at LogRhythm, talks about a case study from his days at Avaya where he drove significant increases in conversion across the B2B funnel.
Mike has 15 years of B2B marketing operations experience at companies like Avaya, ReadyTalk, and LogRhythm. He has spoken at a variety of conferences, like SiriusDecisions Summit, Oracle, South-by-Southwest, and the AMA Conference. On this episode we dive into what it means to run marketing operations, the importance of understanding the impact and connection between marketing and sales, and why you should be using baselines and benchmarks to guide your marketing efforts.
Key Points from This Episode:
- The B2B funnel as a key indicator of marketing maturity
- The crucial importance of having an acceptance stage at the handoff to sales.
- Most important funnel stages and conversion metrics for demand generation marketers.
- The purpose of baselines and benchmarks.
- The use of cost and revenue in his measurement framework.
- Key tools for building marketing credibility within the company.
- The insights that marketing KPIs can give into a company’s overall standing.
“As marketing matures, as a business and an organization, we require more and more technology.” — Mike McKinnon [0:01:52.1]
“The most important thing is to get better. Whatever you start at, just get better.” — Mike McKinnon [0:17:09.1]
“Ultimately, as a marketing group, bookings (i.e., closed-won deals) is what you should be after.” — Mike McKinnon [0:20:07.1]
Links Mentioned in Today’s Episode:
Mike McKinnon — https://www.linkedin.com/in/mimckinnon/
LogRhythm — https://logrhythm.com/
Avaya — https://www.avaya.com/en/
ReadyTalk — https://www.readytalk.com/
SiriusDecisions — https://www.siriusdecisions.com/
South by Southwest — https://www.sxsw.com/
AMA Conference — https://www.ama.org/Pages/default.aspx
Marketo — https://www.marketo.com/
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[0:00:33.2] DG: I have Mike McKinnon, who’s the Senior Director of Global Marketing Operations at LogRhythm with us today. Mike has 15 years of B2B marketing operations experience at companies like Avaya, ReadyTalk, and LogRhythm. He has spoken at a variety of conferences, like Oracle, South by Southwest, the AMA Conference, and the pinnacle of conferences in my opinion, SiriusDecisions. He’s had some fantastic successes that I’ll ask him to talk about and a case study that he talked about at SiriusDecisions for Avaya where he improved conversion rates over time across the funnel.
Mike, welcome and thank you for joining us today.
[0:01:17.6] MM: Thanks, Dave. It’s great to be here.
[0:01:19.0] DG: Well, tell me about the problems your company solves, the role that you have there and what it means to be director of global marketing operations, for those people that don’t have a marketing operations function inside of their company today.
[0:01:31.8] MM: LogRhythm is network security. We focus on using artificial intelligence to identify suspicious activity, both externally and internally, to eliminate bad actors. That’s our core mission. Obviously global operations, here my remit is the entire marketing technology stack. So obviously as marketing matures as a business and an organization, we require more and more technology, and it becomes more and more critical to be able to have a team that can optimize support and implement and run that technology, so your management team is getting the right metrics and the right process.
Tech stack, process, reporting all fall under the remit of marketing operations. That’s the typical remit of marketing operations. At LogRhythm my reach extends a little bit further. The tele-qualification team and the web team also reports in to me as well at LogRhythm.
[0:02:29.0] DG: Well I had, among other things, seen a SlideShare of the presentation that you did at SiriusDecisions last year. You talked about the conversion rate success and some of the journey you took, and I wondered if you could highlight that case study or any other one that you think would be worth hearing about.
[0:02:49.8] MM: Avaya is particularly relevant here since we’re talking about funnel metrics. I went to Avaya, I think it was about two and a half years ago, and they didn’t have a funnel. They didn’t have a handoff process. They did run Tele-qualification, but it was scattered throughout the globe, owned by different groups and different functions, depending on where it was in the region. The handoff was different, qualification was different, everything was different. They didn’t have a defined funnel.
So when I got there, obviously marketing was struggling getting any ROI on any of their marketing activities, because we didn’t have a process to drive leads through and then report on them. When I got there, we installed SiriusDecisions or a form of that and incidentally, everywhere I’ve gone we’ve installed some form of the SiriusDecisions waterfall, and obviously, every implementation is different and unique to that org.
But at Avaya, we went through the standard waterfall, which starts with an AQL, or an Automated Qualified Lead, which really means your automation system has qualified that lead and that’s basically just a fancy word for lead score. Eloqua, or Marketo, or whatever you use has lead scored that lead up to a certain threshold. Your automation system that is qualifying the lead. At that point, you’ll hand it off to your tele-qual team.
Any time you have a handoff, there’s always an acceptance between the handoff, and that’s really important, because what you don’t want to happen is for that handoff to go directly to the receiving team without an acceptance, because if you do that and there is no acceptance, when that receiving team gets that and dispositions it, you want to make sure that it passed the acceptance criteria that sent it there. I’m going to give you a really good example about where that messes up here in a couple of minutes.
We go AQL, then there’s tele-qualification-accepted leader. So the tele group is looking at that AQL and saying, “Yep, it’s a lead score of a one or two, and I’m only supposed to accept ones or twos, so I’m going to accept that.” If it wasn’t a one or two, they would reject it. That’s important because when they get to qualifying the lead, we only want them trying to qualify ones and twos, so we can get an apples-to-apples comparison across the group. It’s important that they accept the lead, make sure it’s a one or two before they work it. Once they work it, it becomes a TQL, if it’s a happy pass, so it’s a tele-qualified lead and that’s important because you’re basically saying my tele-qualification team has qualified it, not my sales team, which is typically a lower bar, usually has a BANT (Budget Authority Need and Timeline), very cursory questions.
Then they’ll hand it off to the sales team, and this is the most important part of the funnel and where it breaks down the most. They’ll take that TQL that meets the BANT criteria, and they will hand it off to the sales team. That sales team will accept the TQL, (converting it to a) Sales Accepted Lead (SQL). They’ll then have their own qualification call, and if it meets their qualification they move it to SQL or sales qualified, and that’s truly what the marketing team is looking for. They’re looking for their TQLs, basically the leads they think are TELE qualified, also for the sales team to agree and say, “Yeah, these are sales-qualified.”
This is where it’s really important that acceptance—that SAL—is probably the most important part of the funnel where most people break down, as well as at that handoff. I’ll give you one example that’s particularly illuminating. When I first got to Avaya, and this is pretty common at most organizations that have dysfunction at this handoff, marketing was saying, “Hey, sales, we’re handing you a bunch of stuff and you’re not following up on anything.” Sales is coming back and saying, “Yeah, you know what, you’re not sending us anything.”
Where Marketing was celebrating their KPI. They had met their KPI, which was the number of opportunities put into the sales funnel, and we had met that. Little did I know those opportunities are being tele-qualified by the tele-qualification team and then automatically converted and dumped into the salesperson funnel.
So I asked in that meeting, and it’s pretty funny. I said, “You know what? If we showed this number to the sales team, what would they say?” There was pretty much silence throughout the room. I said, “Okay, that’s a problem, right?” When we have a party that we celebrate our number, sales should be in that room having a party too. We should all agree that we reach that number. That’s particularly illuminating at any company.
What we had to change was no longer was that tele-qualification team dumping those ops over, the sales team had to accept them. This did two things: one, by accepting them, they were telling the tele-qualification team, “I’ve looked at your lead and it does meet the BANT criteria. I am going to accept it.”
That tells me as the manager of the TELE-QUAL team that my team is doing the correct thing and they’re getting a BANT in every single lead that comes in. The other thing it tells my team is that it’s now the salesperson’s team at bat. They’ve accepted it. By accepting it, they’re saying, “Yeah, you got the criteria you wanted,” but they’re also saying, “It’s my turn at bat. I have this. I will take it from here and I will either qualify it or DQ it after my second sales meeting.”
So I’ll stop there. Basically at Avaya, what we did was after I put this in, we went to a global TELE-QUAL, one company sourced across the globe. We brought our conversions across the funnel way up. We went from AQL to TQL from 1% to 5%. So the number of AQLs that came in that were making it to TQL was 1% and now it went up to 5%.
Then the TQL to SAL was terrible. That went up tom 90%. Then our SAL to SQL was really poor at 10%. We brought that all the way up to 25%, and that’s really the impact on the funnel that marketing wants to see.
[0:08:22.9] DG: Wow, that’s awesome. Let me just ask one nuanced question; I heard when the tele-qualification team was accepting something, the criteria was a certain lead score that everyone had agreed to. Since tele-qualification can be a qualitative and [use] a little bit of a judgement, what were the specific things that sales in this case were looking for that would say, “Yeah, this is acceptable and it meets whatever the criteria is,”? It sounds like before they talked to anyone, correct?
[0:08:52.5] MM: Yeah. There’s two acceptances. The tele-qual team — the only thing they would qualify was stuff being sent to them via Eloqua, that met a certain threshold. So they’re just looking in their queue and they’re just pulling leads from a queue. They all meet one or two, and that one or two is based on their digital body language. We would sit down with marking and sales and understand what are the most important touch points, which ones do we want to score, what’s content that means that they’re ready to buy and we’ve come up with a lead scoring algorithm. We could do a whole other session on that.
That basically, when someone met a certain threshold of digital body language, we would send those to the tele-qualification team. They would make that call. Then once they’re on the call, they’re trying to get really four things. They’re trying to get, do you have the budget, and it has to be within a range? Do you have the need for a solution like Avaya? Do you have a timeline to buy in a year? — Has to be a year — and are you willing to meet with a representative within a month? If they could get those four things, that was considered a tele-qualified lead that they would then hand off to the sales rep to accept.
Now they would mark all of those things on the lead record. That record would be sent over to the sales rep, and what they would have to do is just look at those notes and make sure, “Yep, I see the time frames within a year. I see the budget’s over $500,000. I see they currently use a competitor. And they’re willing to meet with me in two weeks. Okay, it meets all of the criteria. I haven’t called the lead yet. I just strictly want to make sure that the tele-qual team got the correct criteria. I’m going to accept it and basically say, “Yeah, thank you very much Mr. and Mrs. tele-qualification. You’ve gotten what I wanted. I am now going to have the meeting and then confirm that what you talked about on your call is indeed what is happening. Then if that’s how it is, I’ll move it into SQL.”
[0:10:38.9] DG: Perfect. Thank you. That is definitely illuminating. You have really stressed these handoff points as being critical. What’s the most important funnel stage, or stages, and conversion metrics for demand generation marketers, and why do you think so?
[0:10:54.3] MM: Yeah. I’d have to harp on that handoff. That’s the most important one, because that’s where the rubber meets the road in terms of campaign attribution, ROI, marketing bookings, marketing funnel, pipeline, influence; all of that is where marketing gets their bang for their buck. All right, so marketing can do all the activity they want to do, they can generate all the leads they want to generate, they can have the best programs in the world that generate the most highly qualified candidates. If those people are not getting to sales in a timely and efficient manner, your marketing is not going to go to show any ROI on anything.
That’s really the most important inflection point there. That needs to be buttoned up the most, because that’s where all the finger-pointing happens, and just let me go back to that handoff there. A TQL is generated. Let’s take the old way. A TQL is generated, the tele-qualification team just simply throws it over the fence to the sales rep. The sales rep comes into work on Tuesday and says, “Oh, wow. Look at that. I have an opportunity in my funnel. I have no idea how it got there. I don’t know who it is, but hey, let me call this person anyway.”
They call the person and get on the line, and lo and behold, that person says, “You know what? I never told a tele-qualification person that I had a budget. I never told that person I had a need.” The sales guy says, “Oh, great. I’m going to disqualify the lead.” So he DQ’s it. Okay, that’s all well and good. Now as an operations person, I’m going to look at that report and all I see is a DQ’d lead. Now, I don’t know by looking at that report whether the tele-qualification person didn’t do their job and didn’t get BANT, or the sales person simply had their sales meeting and maybe the sales person wasn’t that good and he blew the deal.
Obviously, in the example I gave it’s the tele-qualification person’s fault, but I don’t know that looking at the report, because there was no express acceptance. Now let me extrapolate that report to the new way. The tele-qualification person doesn’t get the budget and doesn’t get the need like I said, when the rep goes to accept that, he’s going to look at the notes, he’s going to see it missing and he won’t accept it. Then I know right away that tele-qualification person didn’t do their job and it gets kicked back.
That’s the troubleshooting error reporting that you need at scale. I can’t be chasing down all of these different ops and actually getting anecdotal evidence about why they were DQ’d. I need to set up a system where simply by looking at what stage they failed to go through gives me, 99% of the time, gives me the issue, the person or the group I need to go back to simply by where that lead fell out of the funnel. That’s how you want to construct a system, should be it so discrete that there is no guesswork at each stage.
[0:13:41.8] DG: Avaya had to have hundreds, I don’t know, maybe thousands of sales reps. I’m sure a lot of the marketing people out there experienced different levels of friction. How in the heck do you get them to cooperate?
[0:13:52.7] MM: You’re right. Avaya’s sales staff, I think was 4,000, and it is a struggle, especially at an organization that big. The first thing we did was we brought tele-qualification into one vendor, brought it under the operations team, and we had one vendor running it in five different regions, in 15 different languages, but it was one vendor. So it was one process run by one vendor. That was the first thing. I knew right away I had confidence that on our end, it was a unified same process everywhere. Now you just need to work on the sales end. It eliminated one of the two factors.
That was never perfect. I can honestly say I was there for two and a half years and it was a constant struggle, and it was a struggle for different reasons in different regions. At a company like Avaya you’re involving channel, where a lot of leads will go to channel and it’s really hard to get closed loop on the channel. You also have leads that go to RSMs, or your regional reps, and then they hand them to channel. Sometimes you hand directly to channel, sometimes you hand to a distributor, who then hands it to the channel.
It can get really convoluted in there. Honestly, there’s two ways to solve that. You can solve it with technology and you can solve it with people. Technology is probably the best way to solve it, but probably has the longest lead time because you’re integrating systems. We solved it with people. The easiest way to solve that was we had a person that would look at all the leads hand it to all of the reps in each region, one person in each region that would basically just follow up with those reps once a week, or once a month, and say, “Hey, we gave you these five opportunities. What did you do with them?”
She would sit in front of Salesforce and she would just update them in Salesforce as the rep walked her through them. At first, people are thinking, “Wow, you hired one person to do all at the admin for a sales team,” but that person actually uncovered so much pipeline in so many bookings that they paid for themselves for the marketing team.
[0:27:01.9] DG: You just got down in the weeds on the ground with the individual reps and on a one by one basis went through there.
[0:27:15.0] MM: Yeah, we had a day called True-up Tuesdays, the first Tuesday of every month. We’d meet with the reps and their business partners and we’d just have a giant spreadsheet, and just go, “All right, here you go. Here they are. Tell me what stage are they in, and what’s the value on them.” That’s all we cared about. What’s the stage? What’s the value? We’d just go through them and update them all.
[0:27:36.4] DG: There’s one thing here that I think sometimes marketers that haven’t done this before don’t understand, is that when you have the winnowing process that you go through with marketing qualified, the automation qualified lead, the scoring and then a tele-qualification team and then an acceptance stage. You actually winnow out a lot of stuff, and the volumes aren’t nearly what they are at the top of the funnel. It really is more manageable and this is, like you said, this is where the payoff is, and so putting a little bit more light in there can make a difference.
Talk a little bit about what baselines and benchmarks are, and why you think they’re important.
[0:28:18.1] MM: They obviously—they help you improve, and that’s why they’re important, because there is really—I’ve installed funnel systems in a ton of B2B companies. The most important thing is to get better. Whatever you start at, just get better. Obviously, SiriusDecisions has best-in-class baselines. It’s important to know those, but really what you want to is benchmark yourself and improve. The only way you can do that is to actually build a discrete enough funnel system that you can only have one reason that a lead would move forward and one reason that a lead would move back, and that gets back to that error reporting and troubleshooting.
That’s ultimately what you’re what you’re looking for, is that tightly constructed funnel, so you can benchmark it properly. Then as you continue to benchmark it, you know at each stage it’s apples to apples to apples, and there’s no, for lack of a better word, shenanigans, going on within those stages, where things are passing to a different stage than they should be. Because then when you’re running conversion from one stage to the next, it’s not a true conversion rate, if you’re violating your own SLAs on what should be passing and what should not.
In general, benchmarking is super important, and really, you’re just benchmarking to see yourself improve. What you want to see is—if you’re going to prioritize what benchmarking should improve first—is to see it improve first at the bottom of the funnel as you mentioned. With a tight process, you’re winnowing it down quite a bit as it gets to the bottom, and also the closer lead gets to an opportunity, and the further it gets into the company’s funnel, the more expensive that lead has become, and the greater cost it is if you lose it. So it’s much better to lose a lead at the very top of the funnel because you’ve only maybe paid your PPC costs, or maybe you paid $2 whatever your pay-per-click was.
Disqualifying them, fine. Not a big deal. You’ve lost $2. But if it gets all the way down to an SQL and your sales rep has a meeting, and then they DQ it, you’re looking at a cost per lead that has skyrocketed as it was moved through and been touched by several different groups. So if you’re going to start benchmarking, I would start benchmarking at the bottom and try to improve the bottom, because ultimately marketing wants to drive bookings and pipeline, and that’s where it happens at the bottom. Tighten up that leak and incidentally, unfortunately, that’s the hardest part to tighten up. Start there, get it tight. It involves sales. It involves channel. It involves marketing.
I would start with the hard part, because the lead scoring, the AQL, that stuff, marketing has been doing that for a long time. The focus in the last five, ten years has been this marketing sales alignment that happens at that handoff.
[0:19:36.0] DG: On that front, you’ve talked about cost and pipeline of revenue. How do you use those in your measurement framework?
[0:19:42.8] MM: That’s a great question. We obviously have KPIs, and what we’ll do is back out marketing’s booking as a percent of the overall company’s bookings goal based on historical contribution. Then you take that historical contribution, and then you back out how many close- won (deals), how many SQLs, and you build the waterfall that way, and that’s how you back out the actual goals and targets that you need to meet the bookings goal. Ultimately, as a marketing group, bookings is what you should be after.
That’s a little nerve-racking for marketing, because they understand they don’t control bookings. The more the marketing group can talk a booking story to the rest—to finance, to sales, to channel—the more credibility they have. Really as you mature as a marketing group, you want to move to bookings. It is uncomfortable. What I like to look at is the evolution or maturation of marketing analytics at a company. You can really tell where that company is based on their marketing KPIs. If you look at the least sophisticated spectrum, and this is where Avaya was when I first got there, marketing generates leads. It’s names, how many names as a marketer can I shove into the database? While that’s important, that is one of the most immature measurements of marketing’s value.
[0:21:02] DG: Well, Mike thank you so much. I really appreciate the time today.
[0:21:06] MM: Yeah, no problem.
[0:21:07] DG: I’d love to have you back any time.
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