Marketing vs. Sales: The Epic Battle for SDR Ownership
Highlights from this Episode
Highlights from this episode
Today, we're talking SDRs and who should own them. Our special guest is Mike McKinnon. He is the Senior Director of Global Marketing Operations at LogRhythm. He's an award-winning and published B2B marketer with 20 years experience in demand generation and marketing operations experience and expertise in marketing automation, demand generation and RPM. He's got a very qualified opinion on the topic you're going to want to hear. LeadCrunch[ai] uses artificial intelligence to drastically improve the performance of B2B demand generation campaigns through account-based "lookalike" modeling. Click the link for more information. https://leadcrunch.com/solutions/
Posted by LeadCrunch on Friday, May 17, 2019
Host: Jonathan Greene
Guest(s): Mike McKinnon
Topic: Placement of SDRs in B2B Organizations
Subtopic: The Evolution of Marketing
Duration: 21 minutes
In this episode of the Green & Greene Show, the LeadCrunch B2B podcast, seasoned marketing experts discuss the the placement of SDRs in B2B organizations and the evolution of marketing.
- Introducing Mike McKinnon, Game of Thrones-style
- Real Talk: Who Really Owns SDR?
- How a Complex Sale Impacts the Positioning of SDRs
- Process & Personality: The Argument for Marketing Ownership
- Economies & Efficiencies in Properly Aligning Your SDRs
- Why a CRM Is a Marketer’s Must-Have
- How Marketing Has Modernized
- Marketing Tech: Beyond Testing to Full Lifecycle Attribution
- Business Intelligence Tools for Marketers
[0:00:07.9] ANNOUNCER: Live from the city with the most perfect weather ever, San Diego, California, all the way to the gleaming shores of Jacksonville, Florida, it’s the Green & Greene Show. Here are your hosts, Dave Green and Jonathan Greene, goofing off instead of working, while unlocking the mysteries of demand gen. The Green & Greene Show is brought to you by LeadCrunch, which creates B2B look-alike audiences.[INTERVIEW]
[0:00:34.0] JG: Play that funky music. I like it. It’s actually the most truthful intro music to any podcast in history. That’s exactly what we do. We goof off instead of working. Mike, are you a Game of Thrones fan?
[0:00:49.1] MM: I am. I read the books and watch the series. Yeah.
Introducing Mike McKinnon, Game of Thrones-style
[0:00:52.6] JG: All right, so here we go. I’m going to introduce you as Michael McKinnon, Senior Director of Global Marketing Operations with LogRhythm. Breaker of ERMs, Lord Demand Generation, Protector or the ROI. How do feel about that?
[0:01:07.1] MM: That’s good. I like it. Yeah. As long as I don’t get backstabbed, I’m good.
[0:01:12.9] JG: Awesome. Yeah, I can’t even with that show right now. I have no idea what happened last week.
[0:01:19.1] MM: It jumped the shark a long time ago.
[0:01:21.4] JG: All right, so tell me about LogRhythm. What are you guys doing over there?
[0:01:25.2] MM: We’re a security firm. What we do is protect networks from bad actors and we’re the underlying engine that does that.
[0:01:36.5] JG: You mean like Keanu Reeves?
[0:01:38.5] MM: Yeah, exactly. Yeah, people who are trying to get into the matrix, if you consider your network a matrix, we would prevent people like Keanu Reeves trying to get into it. Yeah, correct.
[0:01:47.0] JG: Wow. We could totally take this to a new level right there.
[0:01:49.8] MM: Exactly, exactly. This should be our marketing slogan. Yeah.
[0:01:56.0] JG: Well, you’re more or less an expert at all things B2B marketing, but specifically, tell me a little bit about your background and what you’re really good at.
[0:02:05.5] MM: My background has mostly been in mark-ops. I do have three or four years when I started in demand gen, but I’ve been probably in marketing operations for the past 15 years. I remember, way back in the day, I think I was Marketo’s 50th customer. I was on Salesforce in 2001, and believe it or not, we actually moved to Sugar at one point, because we thought that was a better solution back in 2001. We immediately moved back to Salesforce in 2002. I’ve been at it for a while. I’ve seen a lot of tech come and go, seen a lot of consolidation, seen a lot of stuff.
Real Talk: Who Really Owns SDR?
[0:02:35.4] JG: Right on. What I wanted to talk to you about specifically today is the SDR function, particularly who you think ought to own that. There’s a lot of conversation around this topic right now. People, particularly people in ABM scenarios and stuff like that, are beginning to find that SDRs are the way to go. It’s an emerging topic, but it’s a turf war, like a gang war almost, between sales and marketing over who ought to own that functionality and why. I’d like to draw out your perspective on that. Let’s just start with saying, where do you think that ought to live? Then we’ll get into why you feel that way.
[0:03:14.8] MM: In order to tell you where I think it ought to live, I have to tell you a reason. If your B2B firm is mostly a mid-market SME firm, small deals, meaning small deals under 150K, under a 100K, which is most firms, maybe you have a SaaS solution. You have a lot of web traffic, right? If you have these things, an SDR group, that SDR group, typically, is fielding those inbound calls and then doing an outbound work to some lead-scored leads.
That group, I feel, should live in marketing, usually. That group is basically a qualification group, and it’s bound a lot by process. They have to really be in alignment with the campaigns that are driving those customers into marketing. I consider the ADR as basically the equivalent of ABM world account development rep. Typically, you see, I think I looked at engaging and that’s where there’s a big turf war.
I feel the SDR group in a B2B firm with a low price point that doesn’t have a complex sales cycle, that’s pretty much a no-brainer for me to be in marketing. The ADR group, that, I think, is where the turf war is really happening. That’s a long sales cycle. You’re really into the account, you’re typically an outbound caller, or you could be considered inside sales, but in my opinion, I think that group should also live in marketing.
[0:04:50.7] JG: Interesting. What would you consider to be a long sales cycle, just to clarify that?
[0:04:54.6] MM: Anything over a year.
How a Complex Sale Impacts the Positioning of SDRs
[0:04:55.9] JG: Okay, that is long. What do you feel is the breakdown of businesses in that space that have that length of sales cycle?
[0:05:03.5] MM: Let me qualify, now I say 9 to 12 months. Well, you’re looking at any SaaS software that looks to sign a year contract, any complex sale where contract structure is a driver of your sales cycle once you renew. Also, I think the complexity of the sale and how many people you have to thread in that company, how many demos you have to give, is it a rip and replace? Typically, in our industry, we’re selling a large suite of software and we’re replacing. If you’re displacing all the time, that lengthens the sales cycle extensively.
[0:05:40.9] JG: All over the world right now, salespeople are watching this. Well, let me not overstate, all over Facebook, three salespeople are watching this. They’re going to be sending me nasty e-mails here in a minute, talking about, “Who do you think you are to own any sales functionality at all, including the SDR?” Let’s talk about specifically what happens if sales owns that and why it’s less efficient or less desirable then for marketing to own it. Let’s start with that and then we’ll get into, I guess, the opposite perspective: What are the benefits of marketing owning that?
Process & Personality: The Argument for Marketing Ownership
[0:06:17.4] MM: I think if, you’re looking at both groups, really, what you don’t want to happen is it reports in to sales and their KPI ultimately changes. Typically, with an SDR group, your KPI is not bookings, it’s an SQL. It’s a stage three op. You’re meant to qualify incoming stuff that marketing is driving.
What happens is you’re process bound, very, very process bound. Typically, sales leaders are worried about bookings. They lose sight of what that group should typically be doing. They move them down to the bookings, and it loses focus. That’s one reason. The other reason is operations people are typically more structured and process-oriented than sales leaders. If you’re going to have a sales leader running that group, I think that’s fine for a field sales group, where the structure is that there is no structure, or very little in a field sales group. Field rep is pretty much off to do what he wants, but in an SDR group, “I need you to check these 10 things, I need to move these four boxes, and I need it off this way.” That needs to be done every single time in repetition, driving it forward.
If that sales leader has run an inside sales group before, that can be effective. That’s the caveat. Typically, still, what happens is they lose sight of the ultimate goal of the SQL, and then they’re not aligned with the campaigns that are driving those people.
[0:07:46.6] JG: Basically, we have a mismatch in two areas. One is in the KPI, or what people feel the terminal objective is. The second is in the personality, or the type of human being that ultimately will be successful running an SDR team. Your sales leader is not that guy as a general rule, right?
[0:08:10.4] MM: Correct. Unless he’s run inside sales groups before. I have seen success there, and that overcomes that disadvantage, but you still have this other in terms of process and in terms of the way and misalignment with marketing itself. They’re the ones driving all that interest. It’s better for that ADRs to be in those meetings all the time when that messaging is created, when those playbooks are created, when those cadences are created, right? That’s where they’re all created, typically, is in marketing.
[0:08:44.4] JG: I feel this is a little controversial. I mean, I feel people are going to push back there. I feel this is a Kardashian video about to hit the internet. What do you think? Is this some highly debated topic?
[0:08:57.2] MM: If you think you’re talking about the SDR group, I don’t think there’s a lot of controversy there. I think you’re seeing a growing, growing, growing amount of that SDR group that qualifies high traffic, because that’s an easy discussion with their sales leader. “Hey, sales leader, now we have a large amount of traffic filter into our site, a large number of downloads. We do a lot of OCS. We don’t want to send it all to you. We want to just put someone in front of you to qualify and send it on.”
Here’s the caveat that now you say, “Okay, mister and missus sales leader, you’re going to define to me. You tell me what you want this group to get,” and then that’s the alignment right there. Now the sales leader is like, “Okay, great. If I can define that and I get a chance to reject that, perfect.”
[0:09:55.4] JG: I think I get it. Let me ask you this. What are the economies or efficiencies that you’re realizing by aligning the SDR functionality with marketing and having them own that? What’s the potential upside? Do you have any use cases where you’ve seen this be wildly successful?
Economies & Efficiencies in Properly Aligning Your SDRs
[0:10:20.2] MM: Yeah. Back in my old company, ReadyTalk, we actually moved the SDR function from the sales team through the marketing team that took it over. On the sales team, all those things that I discussed happened. They were actually being more concentrated on lower-funnel stuff. They were ignoring the highest because they’re chasing reps around, trying to get reps to convert stuff deeper in the funnel, because their compensation was based on transitions through the stages to close one, right?
Yet, we were one of those small SaaS B2B firms. Free trial was our best offer and drove a ton of traffic, and the SDR group was meant to filter that free trial and live demo stuff. There’s a lot coming in. It was just stacking up, so we switched it over to marketing. We’re the ones who control their free trial PPC, the AdWords, the display. We control all that traffic, and driving it right to them, we can monitor the flow and volume going to them. Then, of course, we move their KPI backup to SQL. Still in alignment, right? Just much, much, much better efficiency.
[0:11:25.8] JG: Let me ask you this. Obviously, you’re very good at this and very deep on this particular topic. I have this problem a lot. I’ll say, “Here’s the strategy that I’m using to achieve fantastic ROI.” Then, some other marketer will try to do it and they’re like, “I got abysmal results.” I’m like, “You can’t fix stupid, right?” Is this because you’re a gangster at managing SDR, or do you feel it’s scalable and pretty much proliferable to most marketers?
Why a Great CRM Is a Marketer’s Must-Have
[0:11:54.7] MM: Yeah, it is. No, I am not a gangster. It’s something that’s easily scalable and easily taught, but you need technology to do it. You obviously need a CRM. The most important thing for an SDR group, I would have to say, is some kind of dialer program. I’m not talking about an automated dialer that just blasts phone numbers. I’m talking about something like SalesLoft, that you can build cadences in. You can drive MQLs into those cadences, and the SDR is really just going down those cadences and running plays. It’s very structured. Every SDR is running the same play. It touches every call, every MQL before it’s DQ’d. All the touches are the same and you can measure performance across the board.
Then you can tweak. If my TQL conversion is too low, I can lower the volume coming in until it starts coming back up. If marketing owns that function, I can play with that funnel all the way from inquiry to SQL, because marketing owns a ton of that. Whereas, if sales owns that function, they can’t. They can only play from SQL to close won with sales operations, and then they have to come to us for the rest and that’s most of it. Inquiry to SQL is three-quarters or 80% of that funnel. SQL to close won is probably the hardest part, I’ll bet, but in terms of journey, it’s a small part of the funnel that’s going on.
[0:13:23.8] JG: That’s a great point, and I think, probably an overlooked one. When you look at the modern marketer in 2019, most of us are pretty well-qualified in incremental testing and optimization of things. If you’ve had any level of success and you’re a director, or senior director or above, probably that’s a core competency of yours, to incrementally improve things by split-testing and manipulation of A/B scenarios over time. I don’t feel that’s a core discipline of sales.
It’s very, very important to understand that one of the main tenets of marketing owning this is that we can have a closed loop of feedback that not only affects lead quality and the sources we use to generate leads, but also, we can actually manipulate the materials themselves through our expertise and probably increase yield in a way that sales never could.
How Marketing Has Modernized
[0:14:18.9] MM: That is correct. You did mention something that I just want to tease out and I hope there’s no one who gets upset. Back in the day, marketing was the lacquer. We would throw out ads and not measure them. I would say now, in terms of tech and measurements, the firms I’ve been at, marketing has been the leader, when it comes to what can be measured, what can be tested, and what can be responded to in an agile way. Sales is still stuck in pipeline and bookings and stages. If they know the velocity between those stages, I would consider that advanced. That’s an advanced thing. I would consider probably most sales operations don’t know the language of revenue—velocity, conversion, revenue, and reach—throughout each stage of their opportunities. I mean, one or two of those.
[0:15:08.7] JG: I feel that’s probably another 20-minute conversation. We can have you back on to talk about measuring velocity and late-stage conversion metrics and stuff like that. I think you’re right. I think there’s a stunning majority of people, definitely salespeople and a lot of senior level marketers, who have no idea how to measure funnel velocity for instance.
[0:15:33.0] MM: Yeah.
[0:15:34.6] JG: Yeah. All right, man. That was extremely informative and really compelling, and I can’t wait for people to argue back with us on this. We will do a follow-up episode to put the smackdown. This is the Green & Greene Show sucker. We ain’t scared.
[0:15:51.4] MM: Exactly. Welcome any comments. Yeah.
[0:15:55.2] JG: All right. Take a minute. Tell us anything you want to tell us about the marketing landscape at large. What do you see emerging? I want to pick your brain for a minute.
Marketing Tech: Beyond Testing to Full Lifecycle Attribution
[0:16:06.4] MM: Oh, yeah. I think two things. Obviously, there’s still tech consolidation going on. That is continuing to go on. I think the tech is moving into more of a full lifecycle attribution. I think that’s where it’s going, and as a marketer, that’s where you should be heading. I think that’s probably because tech never really supported it before. It’s really hard in Salesforce alone. It was very hard in something like Eloqua or Marketo alone. Unless you were really smart, it was very hard to tie those two together to get a full funnel five, six, seven years ago.
Now there are tools that do that for you. I think, as a marketer, we’re really good at testing stuff; AB split testing, e-mails subject lines. We need to start split testing the funnel and actual campaign attribution and larger things. I think, as marketers, we need to apply that rigorous methodology we apply to our own individual tactical tasks, to a more strategic, impactful set of metrics, so we can raise the importance of marketing to the board, so everyone in marketing, not just marketing ops, understands their impact on revenue. I think that’s where you need to start going.
[0:17:31.2] JG: Actually, that fundamentally changes the nature of the marketing organization, if you think about it, to have full-funnel ROI from ad sets or revenue. It turns marketing from a cost center into a profit center, if you think about it. That’s a significant change in your standing in the organization at the C-suite table when you become a profit center. That’s actually a big deal.
[0:17:56.7] MM: Absolutely. Correct. Yup.
[0:17:58.1] JG: All right, so one more question and this is just more for my benefit. You mentioned technologies that are bridging the gap between your marketing, HubSpot-, Marketo-type suites to Salesforce and other CRMs. What technologies are those in particular? Do you have any on the top of your head that are extremely effective that maybe we should look at? Honestly, this is still the problem of my career, figuring out cradle-to-grave full-funnel attribution.
Business Intelligence Tools for Marketers
[0:18:30.6] MM: Yeah, I certainly do. In general, this has been the bane of marketing’s existence, and it’s solved by a BI tool. Essentially, what we’re asking is, “Hey, I need a BI tool that is marketing specific, or I just need a BI tool.” The problem is when you say BI, IS jumps in, IT jumps in and says, “Hey, you’re not buying one. Or if you do buy one, we’re going to buy it for you and it’s going to be power-BI,” or it’s going to be something that requires SQL that they’re going to run for you, because it integrates into all of the data systems and IT touches some of those.
A lot of times, marketing struggles with exactly your premise, because IT, IS gets involved and it’s quashed. Marketing just either stops, because they don’t want that solution, or they get it and they never get anything out of it because IT and IS run it.
So, now with that said, there are a lot of marketing-specific BI tools coming around, Full Circle, LeanData, Campaign Monitor, and I’m missing a couple, but they’re in that class and they’ll do a full funnel attribution. They will do lead-to-account matching. They will do account scoring. They’ll do lead routing. These are the next core functions you need as a marketer. You need your automation, you need your CRM, and then you need that, those suites.
Tableau is a nice one, right? I guess, that’s a big tool work, but Tableau could just be installed on top of your own system. It’s a tough play, but if you can just get something that’s a point tool for marketing like full circle, or lean data, or one of those other ones, I just say stay out of hair.
The problem is that you could be getting so much more. A full BI tool would ostensibly be a little harder to work with, but it gets you more. Full Circle and those tools are out of the box. “Here, you’re a marketer. I know you don’t know a ton about code, here’s all your funnel reports.” It’s working. Either one works, but it is a huge gap, I think right now in the marketing org, because typically, that is owned by IS and IT.
[0:20:42.4] JG: Yeah, it seems to be the limitation against which people I talk to are running the most, if that make sense. The hard layer that people are bouncing off of is that layer above the integration between Marketo and Salesforce, for instance, for reporting purposes. That does seem to be, even among very good marketers, the problem of the date.
[0:21:03.5] MM: Yeah. Tough, tough nut to crack.
[0:21:06.0] JG: That’s a whole bunch of extremely valuable information. I’m in your debt. We’d love to have you back.
[0:21:10.9] MM: Happy to come back.
[0:21:11.9] JG: Yeah, thanks a lot, guys. This has been Mike McKinnon, the Greene & Greene show minus one Green for the day. Hey, you know what? It’s better-looking without him. No, I’m just kidding. All right, roll the music. Have a great day. We’ll talk to you guys next time.
[0:21:28.6] MM: Thanks very much.[END OF EPISODE]
[0:21:36.3] ANNOUNCER: Thank you for tuning in to the Green & Greene Show by LeadCrunch. Green & Greene think differently about B2B and want to start a movement to transform demand gen. If you have ideas for topics or would like to be a guest, send an e-mail to firstname.lastname@example.org. If you’d like to find more customers, visit our website to talk to one of our demand gen guides, www.leadcrunch.com.[END]