Myths about sales and marketing alignment
Highlights from this Episode
Highlights from this episode
Today on the podcast we welcome David McKie, the Vice President of Marketing Operations at Medidata. Before joining Medidata, David worked for SAP in marketing operations. In today’s episode, David discusses the inherent
Key Points from This Episode:
- How companies should measure the success of marketing.
- Why marketing organizations often try to become more like sales organizations.
- Importance of understanding the gap between marketing and sales timelines.
- Understanding the marketing campaign halo effect.
- Why it is much easier for small companies to finely target specific needs in the pipeline.
- The power of prioritizing the marketing message rather than the sales number.
“There are so many things that marketing does that does not have that easy, direct tie to revenue.” — @damckie [0:03:29.1]
“Marketing doesn’t work on the same timeline as sales.” — @damckie [0:06:48.1]
“The role of marketing, I think it kind of gets distracted from its original purpose when you try to be an add-on to the sales team trying to fill up demand in specific buckets.” — @damckie [0:13:26.1]
“People who got traction on the marketing team were the ones that were able to be better about delivering messages or stories rather than trying to deliver on the sales number.” — @damckie [0:14:15.1]
Links Mentioned in Today’s Episode:
David McKie — https://www.linkedin.com/in/davidmckie/
David on Twitter — https://twitter.com/damckie
Medidata Solutions — https://www.mdsol.com/
SAP — https://www.sap.com/
Sapphire Conference — https://events.sap.com/sapandasug/en/home
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[0:00:33.9] DG: I’m here with David McKie. David is the Vice President of Marketing Operations at Medidata. Before that, he had worked for quite a while in SAP where he was also involved in marketing operations. Really, probably one of the early people in that area.
David, thank you so much for joining us today.
[0:00:52.1] DM: My pleasure.
[0:00:53.4] DG: If you would, tell the audience a little bit about what your company does, the problem it solves, the markets it serves, just to put everything into context that we’re going to talk about today.
[0:01:02.1] DM: So Medidata Solutions is a company that focuses on the life sciences industry and we have software and services, expertise and data that helps pharmaceutical, medical device and contract research organizations with conducting the clinical research necessary to bring new drugs to market. So that ranges from everything around trial feasibility and design, all the way to patient enrollment, data collection and gathering, file management and even to some of the more sophisticated capabilities around ingesting and analyzing genomic data as part of clinical research.
So it really runs the whole gamut of clinical research, and every time – It seems like every time a new quarter rolls around and we’ve just expanded our product line and we actually just recently did that with the acquisition of a company called Shift Analytics. So now we’re also getting into the commercial side of the life sciences business. So if you think about the whole process of drug research and conducting clinical trials, what happens once the FDA approves it?
Well now, it needs to go into market and it needs to become adopted by various positions and there’s a whole process around optimizing the market penetration. So Shift Analytics as they would describe it, they help pharmaceutical companies get to peak revenue faster by optimizing sales force, increasing awareness. There’re a lot of different pieces of the whole life sciences and treatment lifecycle that we now play in. So hopefully that’s an easy enough overview.
[0:02:45.8] DG: It sure is. Thank you so much for that. We were talking about, I think, a topic that’s very near and dear to anyone in marketing who has a budget or aspires to get a budget and that is how do you really measure the success of marketing? I think it’s something that everyone struggles with. Obviously, everyone’s come a long way with measurement because of companies like SiriusDecisions and all the work that is being done in that area. You’ve been at sort of the center of this in some fairly significant companies. I’d love to hear your thoughts about that topic.
[0:03:19.0] DM: It’s deceptively easy to say, “Well, I can just measure the impact. With all the digital tools and technology. It’s just really easy for me to show the impact of marketing on revenue,” and there are so many things that marketing does that does not have that easy, direct tie to revenue and when we try to tie everything to revenue, what ends up happening is people feel pressure to then start to create linkages that really don’t exist and they start dropping focus on activities that potentially add a lot of value, and because they can’t tie it to the revenue, they don’t want to spend time on it. It’s not really worth it.
[0:04:01.8] DG: Boy, is that ever true? I’ve certainly seen that a lot.
[0:04:05.6] DM: So just as a little context, I spent from 2009 until 2016 at SAP and one of my early roles at SAP before I got in the marketing operations was what we called demand management. The idea was, oh, we should be able to manage our pipeline of different products with sales very focused on in-quarter revenue. The idea was that this demand management team could help with managing Q+1, Q+2, Q+3. So what we call the rolling four quarter pipeline.
Our goal was really to look at the health and shape of that pipeline and try to determine, based on historical trends, “Do we have enough? Where do we have gaps? Then how are we going to fill those gaps?” You do that by trying to look at the tactics and activities that have historically performed in the past, and then try to get the marketing teams to conduct campaigns to target some of those gap areas. All sounds reasonable in practice, right?
[0:05:10.2] DG: Right.
[0:05:13.6] DM: Yeah. Unfortunately, what ended up happening was, fundamentally, marketing does something very different than sales and what I saw happening was the marketing organization trying to contort itself to become more like a sales organization. Just to give you a small sense of some of the challenges we ran into — okay, we would notice a gap in our Q+2 pipeline in data and analytics. So then it would be a scramble to try to get the marketing teams to run a campaign to fill up that gap.
What ended up happening was that marketing tends to do bigger bets, right? We talk about bigger themes. We talk about value proposition to the customer. We try to come at it from the angle of, what’s in it for the customer, what do they care about, what are they talking about? So you create these bigger campaigns, these umbrella campaigns that have many different moving pieces that need to be planned out months in advance.
Even for something like our Sapphire Conference at SAP, we would plan that. I mean, before we were even finished one year, the planning would already be happening for the next year. So you can imagine, going back to a marketing team and saying, “I need you to add more pipeline here for the next so that we can hit our revenue number in two quarters.” Number one, you can’t do that because you already have all these plans in place that you’d have to just throw out the window so that you could refocus everyone to deal with that gap area.
So that’s one challenge that came up that marketing doesn’t work on the same timeline as sales and we’re trying to build top of funnel and awareness and overall conditions so that sales can be teed up for success in the future. Now, when you start adding different sales segments and different product portfolios, which SAP has many of both, then you start realizing that you have these tiny little buckets. So we would have multiple product areas and multiple sales groups and they would each have targets for different solution areas for each of the rolling four quarters.
You might have gaps spread across each of those different ones. So instead of just saying, “Oh, I have a gap in Q2.” You could say, “I have a gap in Q2 for the data and analytics products for the west sales group.” Now you’re starting to say, “Well, now we’re getting more fine-targeted,” and marketing campaigns also don’t really necessarily work that way. You don’t have something in your toolkit that allows you to fill up that specific bucket, the data and analytics for the west region, for Q3.
I mean, if you think about what you really have, you could call them campaigns but then you’d have to have your marketing materials and marketing collaterals to back it up. You could do a physical event, like some sort of hospitality event but those are very tactical things. Those aren’t really what I think most marketers really want to be doing. I don’t think it’s necessarily the big value add that marketing can have. Now, I do want to layer on one additional level of complexity.
I just talked about all these different buckets that you could have gaps in and you could ask the marketing team to manage across—I don’t know, when all is said and done with all the different quarters, with all the different product lines and all the different sales groups, I mean you could have 120 different line items that you’re measuring, “Do we have enough in this particular category?” Now, to take it even further, you want to actually look at, “Well, who’s contributing to that?”
And you’d have different marketing teams and you would find accountability for each of those marketing teams to address each of those 120 gap areas. So the expectation would be that the industry marketing team would deliver 15% here and the small and medium enterprise marketing team would deliver 20% there and the online team that was doing the mass online campaigns at scale were supposed to deliver 20% here, 10% there, 20% here.
So now you’ve got not just the 120 but potentially six hundred different categories that you’re managing towards and I got to tell you, it just doesn’t happen. Nobody can manage that. That’s not how a marketer wants — If I’m a marketer, I don’t want to be looking at a spreadsheet with 600 different sales and trying to figure out how I fill up each one of those that happens to be a little bit red. I want to be thinking about, “What does my customer want? What is my customer struggling with? How can I help my customer?”
Delivering those messages at a higher volume and instead, what we used to talk about is that you used to be trying to fill up little buckets here and there. The fundamental challenges in a lot of cases when we ran campaigns, what you’d see is what I would call a halo effect: that when you ran a campaign, you never were able to target a campaign very specifically to one of those 600 different—well, technically, it’s 120 different categories. You would run a campaign, and then what you would get at the other end potentially could be something completely unrelated to the campaign.
In fact, when we talk about the ability of marketing to fill up the demand, you didn’t really have that great line of sight. So as an example, I am the person responsible for the small and medium enterprise business and I’m expected to deliver X number of dollars in the pipeline. What you would see is that the industry marketing team would deliver a lot of pipeline for that SMB team. What ended up happening was that some of these small companies wanted to understand how the big boys worked. So they would see a campaign for the financial industry or the retail industry and they’d go download a white paper and they’d explore a little bit more about it. When we did a follow up with them we actually discovered, “Well, that actually fit into this category.”
Or if you’re doing a proper qualification process, they may come in with one particular solution. But if you’re really trying to assess what their pain point is, you actually might steer them towards another solution once you actually get into a conversation with them. So this whole idea of, “I know how to fill up the pipeline,” at least at SAP, was so large that it was never that targeted. You’d have hundreds of different marketers around the world that were running marketing campaigns that could spill into different sales teams.
If I truly thought that I could significantly impact this one little bucket of stuff, generally speaking, you might be able to nudge it up or down 10% and a lot of the other stuff was just things coming through the door because of all the various campaigns running around the world. I mean, in the North America team, what was interesting is North America specifically would run campaigns and we would end up with pipeline all the way around the world because English tends to be the language of business.
So a UK person just going online and searching for things would find the US campaigns and then get redirected back to the UK team for follow-up and then go into the UK team’s pipeline. Even countries like India where they speak a lot of English or the European countries where maybe English isn’t their first language, but they’re still looking at content on the English part of the web. So it just creates this whole level of complexity around, “How do I meaningfully add to the specific pipeline categories that sales cares about?”
The role of marketing, I think it kind of gets distracted from its original purpose when you try to be an add-on to the sales team trying to fill up demand in specific buckets. That’s one thing, right? The whole complexity around, “Can I finely target my demand campaign to fill up specific needs in the pipeline?” and as you get to be a smaller and smaller company, the answer is it’s much easier to do. But as you become a bigger company with more sales groups, overlapping sales groups, more marketers marketing different things, different products and a much, much more complex overlap between all of that, it becomes much more difficult to be as finely targeted. At least in my experience at SAP, I saw that the people who got traction on the marketing team were the ones that were able to be better about delivering messages or stories rather than trying to deliver on the sales number, the revenue number, by themselves to the revenue number.
Maybe I’m totally riffing here, but in an enterprise sales company and I’ve heard this from multiple people, you don’t really get a seat at the big boys’ table unless you’re bringing revenue in the door and there are people that truly want to have a seat of that big boy table and to bring marketing along with them and that can be a little bit of a struggle at times.
[0:14:57.8] DG: I couldn’t agree more. David McKie, thank you very much.
[0:15:02.2] DM: It’s been my pleasure Dave, thanks for having me.
[0:15:04.3] DG: You bet.
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