BDRs – Here Today, Gone Tomorrow

(5 use cases for BDRS that work)

There are a couple of flip flopping decisions that companies make on a routine base. Product marketing, for example, flips between marketing and product management. Product management is sometimes its own function, but other times it gets stuffed into engineering. Customer success teams can come and go. Product evangelists can move from marketing to product to the CTOs office.

With BDRs, they get flipped between marketing and sales. Sometimes they just get cut, only to reappear a few years later. Why is there no consistency with BDR programs?

My thesis is that BDR programs get put into place for the wrong reasons without organizational alignment to both internal lead flows and also the overall go to market strategy. Unless there is agreement on the strategy, their placement and even existence can be called into question routinely when they don’t produce the “ROI”. Once in place, without a disciplined approach to their goals, mission creep can set in as ambitious BDR leadership wants to take on more responsibility. This added responsibility might not align to the go to market strategy. Over time, this mission creep translates into added headcount, and a misalignment over the original mission.

Below are five use cases for BDRs and a recommendation on where to place the teams, how to compensate them, and what activities make sense for them I probably missed some use cases, so comment away.

#1 – Sales Development Program

This is one of my favorite reasons for a BDR program, but also fraught with peril. In this case, BDRs are hired purely as an onramp to the inside sales team to train new reps, and hire especially junior reps at a lower cost. Without mission discipline, however, these types of BDRs teams can hunt for an expanded mission. Other people see these BDRs “sitting around” and work to get them tasked. Suddenly your BDR team isn’t big enough, and you need to hire more BDRs to handle these “tasks” that are coming their way. Over time, the ROI goes upside down from the original mission, which was to train new sales people.

If done correctly, BDRs as a sales feeder provides great career progression for the BDRs with fairly low compensation and little variable compensation. An up or out mentality means your best BDRs become sales people, and other other BDRs might move out of the company or into other roles that match their career desires closer. These types of programs have to report into the sales team since they are essentially recruiting programs. Expecting high attrition is fine. The size of the team is driven by overall inside sales hiring demand.

#2 – Enterprise Sales and Marketing Bridge/ABM Support

With enterprise selling models, enterprise teams spend a majority of their time late in the sales cycle trying to move developed deals forward. Marketing, spends a majority of their time early in the cycle developing awareness and “leads”. In between is the gap of attention where opportunities go to die. BDRs filling this role providing the attention needed to early stage leads. Since these BDRs are handling enterprise accounts, this is no territory for first time sales reps. BDRs in this role should have selling experience and are using this position to understand how to do complex sales cycles work. Compensation should be based on leads moving through the sales process or in an ABM system, accounts penetrated. Payment should be made for meetings/demos, then opportunity creation by the rep, then deals closing. By keeping the compensation system aligned with the sales process, BDRs in this role will constantly circle back to opportunities the enterprise reps didn’t think were developed enough and will keep pushing them forward.

BDRs have to be senior in this role. If not, the sales team will not feel comfortable with them poking around their enterprise accounts if they are working to close high six and seven figure deals.

With an ABM process, reps have a targeted lists of accounts they must either engage and move forward, or convince the BDR manager that the account won’t buy for many years into the future. By keeping the BDRs focused on a specific account list, a company can methodically cover off their target account list.

Career advancement in this role is difficult. Jumping from inside sales/BDR type role to enterprise role has challenges especially if the field team is remote. In addition, the compensation jump between the two roles can be wide. Finally, this type of role will be most successful inside marketing as an extension of the marketing lead process. Placing the role in sales can result in the team becoming the admins for enterprise sales reps. However, by placing the team in marketing, the career progress becomes that much harder.

Staffing levels for this role depend on the rate at which the company wants to penetrate the target market. Let’s assume a BDR can go through 200 accounts in a year and either get them engaged with the company or prove that they are a prospect. For a target market of 200 companies, 1BDR is all you need. For a target market of 10,000 companies, one BDR would take 50 years. Marketing in this case needs to decide the most effective way to spend money to get the required growth.

#3 – Inbound Lead Catcher

BDRs teams in this role triage incoming inquiries and provide assistance to get buyers to their next step in the buyers journey. There are a couple of key nuances in the first sentence. First, is the use of the word “incoming inquiry”. These are actual inbound inquiries where someone wants to engage the company. The inquiries could be from Contact Us forms, or demo requests, pricing request, even someone asking product questions on a community site. In these cases, having a BDR rapidly respond, determine where someone is in the buyers journey, and assist them to get to the next stage is a highly effective use of BDRs.

The second nuance is the use of the word “buyers journey”. This is all about the buyers journey, not the qualifying of incoming leads. No one likes to be qualified. Prospects know they are getting qualified. In this model, BDRs help figure out where someone is in their buying process and help them get to the next step. BDRs get compensated when the buyer passes a checkpoint – maybe a demo, or a meeting, or a quote. Using BDRs for “lead qualification” ultimately ends up creating a lead cooler where leads go to die. Inbound inquiries don’t need qualification, they need assistance.

By using BDRs in this role and not relying on an inside sales team, buyers get prompt responses and the company gets a repeatable, measurable model for moving these buyers forward.

Compensation in these models is base plus some achievement component. Many times these companies are inside sales driven and career progression from inbound lead catcher to deal closer can be easily accomplished. Lateral movement to customer success teams is also a possibility.

This role can easily be staffed in the sales organization and the level of staffing is a direct correlation to the number of inbound leads.

#4 – Chat

Chat is a great way to engage prospects. I am no chat expert, and there has been lots of work done by companies like Drift on best practices. What I do know is that BDRs answering chat questions are a great way to engage prospects. I also know there a some large pitfalls with BDRs on chat depending on how you compensate them and the expectations.

Chat is like person at your trade show booth who asks people “Can I answer any questions for you?”. Chat is the person at the trade show booth whom someone randomly walks up to and starts asking questions. You never know to whom you are speaking. It could be a student, a job seeker, someone trying to sell you trade show space for next year, a potential investor, a prospect, or the CxO of your biggest prospect who wanted to stop by and see what you were all about.

You just don’t know.

The conversion percentages of this interaction to an opportunity can also be quite low.

Chat is the person who used to answer phones at your company.

With these expectations, how do you set up BDRs for success with chat?

First off, if you try to have them “handle chat” and also handle other leads, chat will get the short shift. Chat as a lead source is less effective than say the “get a demo” form. How you deploy chat on your site can provide some better predictability to the type of inquiries you are getting. But in general, there is going to be a broad spectrum of inquiries. BDRs want the Glengary leads. Chat might not be those leads. Getting stuck handling chat might not get them excited.

Second, while chat gets lots of random questions, you should also expect highly technical questions that should theoretically be handled by support or SEs. It is like someone walks into your company and starts asking the front desk technical support questions. Hence BDRs on chat need to be backed up by lots of different teams in the company to successfully catch inquiries and route them to the right team where they respond.

So how do you staff chat? Round robin assignments of BDRs might work if they are 100% assigned to chat for the day. This is super tough to pull off. Another possibility is to make chat your pre-BDR job or a new hire BDR position. First day on the job, a new BDR starts on chat and stays there for three weeks. In this scenario, they quickly learn their way around the company and figure out how to handle basic sales questions. Regardless, chat is a job itself that requires thoughtful staffing. It isn’t an adjunct position placed on top of a team. As chats increase, staffing to the chat lines should also increase.

Chat management is a marketing function. Anything with respect to site conversion sits in the wheelhouse of marketing. If the BDR function long term sits in sales, sales should agree to staff chat with new BDRs. If BDRs sit in marketing, then it makes the staffing easier.

#5 – Prospecting the Database

In an ideal world, prospects would raise their hand to be contacted. The reality is that many customers are engaging in a buyers journey just without you. They might stop by for a quick white paper, or ask an innocuous question on chat. Behind this question might be a large enterprise deal. Outbound prospecting might be the only way to reach these people.

If you have a primarily inbound model, asking inbound lead catchers to go outbound is a strange motion. It also needs to be supported by a campaign team in marketing that drives email, advertising, and list selection for the BDRs.

The yield is also really, really, really low.

So low, that unless you have a high ASP, the ROI model starts to break.

Outbound prospecting is one of the hardest BDR jobs. Compensation should follow with more leverage than an inbound job. With the case of outbound prospecting, the sales team is essentially dividing the sales function into two groups. On group is for early stage pipeline development and another group for later stage pipeline development. BDRs in this capacity are fulfilling a sales motion and hence should be in sales. In addition, there should be some common agreement in sales as to why this function is needed and the regular inside sales reps are not prospecting.


The BDR function is a generic term applied to people who work early stage leads/deals. Depending on the company’s go to market model, the BDR team can sit in sales or marketing. Mission discipline for BDR teams is critical so mission creep doesn’t make the model turn upside down.

Photo by Louis Hansel @shotsoflouis on Unsplash

Shifting to Product-led Growth

A common theme in a lot of CMO searches is the desire to find someone who knows how to do product-led growth models. The story for the hiring companies is somewhat similar – a company is looking to drive more volume sales with freemium models, or more e-commerce from what is today a classic MQL/SQL sales-driven model. Of course, product-led growth models are somewhat specific to software companies, and other types of companies where customers can experience the product before they pay for it.

The question for CMOs tasked with this change, is how do you make the transition from MQL driven to product-driven revenue?

Here are some ideas for those of you contemplating this change from MQL/sales to product led/e-commerce/sales.

Classic SQL Model is Sales Driven, Not Customer Driven

In the classic MQL/Sales model — the marketing team drives MQLs/SQLs and hands them off to the sales team. This is followed by endless meetings about bad leads, good leads, bad lead follow-up etc. (I couldn’t resist adding this). The sales team then takes these leads and turn them into money. Ideally, there might be a BDR team in the middle to help move leads through.

The product team, of course, is also engaged, but tangentially. The product team is generally responding to product questions and issues during an evaluation with the sales engineering team working as the front line of product information. The sales team and sales engineers are there to support customer trials in a very hands on approach. If the product is hard to install? No problem as the sales engineering team can help install. In a heavy sales approach, many product sins can be overcome. A customer looking to experience the product can even be gated requiring they talk to sales before getting a demo or the product. The sales team is very much the gatekeeper to products, demonstrations, product knowledge.

For a lot of companies and go to market motions, this is the correct model, and it works.

Product Lead Growth – The Customer is in Charge

Now let’s flip to more of a product lead growth model.

In this model, marketing drives trials/product downloads. Once the customer has the product, the sales cycle is somewhat out of the control of everyone. Product design is actually what is in control. A customer either gets to “wow!”  in the product or not. Sales and marketing can attempt to talk to people trialing the product but theoretically, there might not be a lot of information about who is even using the product.

Why no information? If the goal is to get usage, and usage drives purchase, then anything you put in the way of someone trying your product causes a reduction in conversion. In some markets, like developer tools, asking them for any kind of information drops trial amounts precipitously. Even when you collect information, the amount of Gmail accounts and spamminator emails can be high. Few prospects want to talk to you and get on your email and call lists.

A better approach is to create casual modes of on-demand communication where trialers and prospects can decide to engage with you to ask questions in a very safe manner. Slack channels, Twitter, online forums are all great venues. To do this, however, you have to staff these channels with people that can answer product questions. These aren’t primarily sales channels. If you treat them this way, prospects figure this out.

This product-led model is just very very different than an MQL/SQL model. In one model, product trial support is metered out to the most qualified prospects. It is a give/get model. I will help you if you tell me your budget process etc.

In the product-led growth model, it is a give give give model. Everything is focused on product adoption that hopefully at some point results in an e-commerce transaction or someone calling in for a quote.

Even with a product-led growth model, there are still MQLs and SQLs. Some customers want help with an evaluation. Other customers won’t try a product unless they first discuss the product with the company. This alternate MQL/SQL channel is perfectly acceptable provided you don’t warp your process by giving someone in marketing a goal to drive MQL/SQLs (Guilty! I did this once). Having MQL goals while also having product trial goals just doesn’t align that well. However, there will be a natural percentage of trials that will result in inbound inquiries for more formal evaluations.

Going from MQL to Product Led Growth

The main difference between these two models is the linkage between sales and marketing. In the MQL model, marketing drives MQLs. In the product-led growth model, marketing drives trials, and MQLs are not the focus. In fact, attempting to both collect MQLs and drive product trials will introduce a huge amount of confusion to the marketing team.

With a product-led growth model, prospects have your product. You want to provide them everything possible so they decide to purchase. This could include support, white papers, technical documentation – everything. Your entire goal and the goal of the product team is to remove friction so that customers can experience the product, and call you up to buy.

The MQL model is much more of a controlled approach where deal control is maintained with the company and sales. In a product-led growth model, the customer is solidly in control. Attempting to take back control, just causes friction internally and with the customer.

So how do you move from an MQL model to a trial model?

First, the product team has to drive this. The product team has to do everything possible to drive friction out of the product experience. When I have talked with company’s looking to go more with product-led growth, they are sometimes surprised that the CMO candidate is sort of saying “not my job.” You need to stick with this. There is nothing worse than trying to drive a product-led growth model where you as CMO see product issues in installation, adoption, and getting to WOW, but the product team is focused on features for enterprise customers, and the sales team is asking for MQLs. You can have your goals be “drive product-led growth”, but you can’t do it without the product team having this as their primary goal.

Second, marketing now drives trials. MQLs will happen, but you can’t goal marketing on this. So everything marketing does on the web site is to drive trials. You can still have a button that says “Talk to Sales” or “Get a Demo” — but withholding pricing? Don’t do it. People won’t try products unless they know the cost. What about registration pages before you can get product support? Don’t do it. It is friction. Believe the product will generate demand. You have to trust the process. You have to trust the product trial will result in product purchases through e-commerce or online quotes.

What is Sales Doing?

With this change, what does the sales team do? Is the sales team waiting around for people to call up or email and order? What do they do all day?

The answer is that sales is now a seperate channel to revenue. As e-commerce ramps up, more and more product revenue should go direct to e-commerce. The sales team can now figure out how to wrangle additional revenue from either existing accounts, or by trying to divine what is happening with the trials and being proactive in the larger accounts.

But wait, doesn’t this contradict some of the earlier comments? Not really. It just changes how sales interacts. In stead of being gatekeepers to information, they have to be more passive intelligence agents working to figure out what is happening in larger accounts.

Ideally, your product works great, and there are no issues. Ideally, there are no political issues in an account preventing adoption. Ideally, everyone reads your website and knows exactly how the product works and how it stacks up against competitors. But we know this is never true. So sales role shifts from responding to inbound leads, to trying to figure out how to add value during trials. The best reps know how to do this. The worst reps call up and try to qualify trials. If sales then pivots and spends a good amount of time watching product usage data, connecting the dots between users in large accounts, helping run best practices calls, roadmap sessions, sales becomes a value add in a customer-controlled sales approach.


This transition is not easy. But with the right set of metrics and goals, you can get the product, marketing, and sales team aligned and move to a product led growth strategy. The key is the role of product management to drive to wow, marketing’s requirement to drive trials, and a shift in sales thinking from acting as a gatekeeper, to constantly trying to figure out how to add value in the trial process.

Good luck!

7 Reasons Not To Modify Your CRM

A LinkedIn post the other week from someone who got HubSpot for Christmas got me thinking back to the simplicity and efficiency of having a fresh CRM without modifications. After working 20+ years with CRMs as a CMO, COO and VP of Sales, the modifications we do to our CRMs rarely provide the value we think. In fact, heavily modified CRM systems actually hinder operations, and eventually leave an organization ham strung by spaghetti workflows, fields no one knows what to do with, and a fear that they are one change away from breaking the system. My belief comes from inheriting everything from fresh installations of a CRM to joining a company that had spent over $500K customizing it. In all cases, the modifications did not help over the long term. The sales and marketing teams were anywhere from 3 to 100 reps, selling anywhere from 3 to 30 products. It is just too easy to modify these systems for what appear to be good reasons in the short term, but in the long term, these changes only create problems.

Here is my checklist to consider before you modify the system. If your modification doesn’t involve any of these items, you should be OK.

#1 – Fields that Require Manual Data Entry

But wait – this is almost all fields? Exactly. See the title of this blog post. Everytime you create a field that requires manual data entry, you are creating work for someone – your prospects, your sales team, your support team.

If you create 5 lead fields to capture information from the first sales call, with a sales team of 50 people, that connects 40 times per week, you just created 10,000 weekly field completions. At five seconds a field, you just added 14 hours of work to the sales team each week.

Don’t add manual collection fields unless you really really really have to. If you have to create a field, calculate the weekly field load number for the organization. Come up with the total number you are willing to tolerate and maintain that budget. Add a manual field, then remove another field.

#2 – Behavior Enforcers

Sales and marketing leadership is notorious for wanting to add fields to opportunity or deal objects to enforce behavior. For example, creating an opportunity requires that you record the “business driver” or “budget amount”, or else you can’t create the opportunity. Or you might be able to create the opportunity, but it is obvious you haven’t recorded the value.

These are just bad reasons to create fields. First off, you can enforce this discipline by asking people to record info in the Notes section of a deal. Second, a hot topic now, may not be hot in 3-6 months as leadership changes and other priorities come into play, the field gets used less and less. Third, sales reps will pick the fastest pick in a list to move on. Use the notes, and enforce the discipline at the manager level when doing account reviews. Hubspot, specifically, has the ability to use snippets to paste into notes. These snippets are incredibly effective implementing your favorite sales methodology.

#3 – Check Boxes

Check boxes are perhaps the worst type of field that a marketing organization can create. The problem with a checkbox field is that unlike say an address field, where the data is generally static, unless the prospect moves, a checkbox is binary and records no meaningful information. It records the state of the company, prospect, or deal at a particular point in time only. If that information changes, unless there is some automated way to uncheck the box, these fields are just worthless over time. Worse, if they trigger workflows you end up with a bunch of checkbox fields that you don’t want to delete least they break something. Avoid checkboxes.

#4 – Fields that Record Duplicate Information

You are holding a webinar and someone wants to create a field that records the webinar name that a prospect attended. This type of a field makes reporting super easy since you are adding a simple field to a record. But, this is an inelegant solution. CRM systems already have a method to record this type of events/calendar data using an activity object. Almost all CRMs have the ability to record completed activity. A webinar is a completed activity. Use the system as designed.

#5 – Fields with No Long Term Value

Ask yourself – “Will this field still be in use in 2 years?”. If the answer is uncertain, then don’t create it. If the CRO demands a field gets created for whatever reason, ask them if it will be used in 2 years. If the answer is “Of course it will”, that is fine, create it, then track monthly usage, and let the CRO know you are deleting it when usage falls before 50%. Don’t build workflows off the field until you use it for 6 months and you see that it is actually getting usage.

#6 – Fields without Queries

One of the main purpose of a field is to pull data into a discrete identifiable block so you can query and summarize the data. Before you create a new field, ask yourself, what query will be run off the field, when the query will be run, and what ongoing report/dashboard this information will show up in. If the answer is vague, then don’t do it. Think through how many dashboards have been created and which ones are actually used. It takes a lot of value to break through the noise and provide information of actual value. If your new field isn’t going to do it, then don’t create yet another field that doesn’t get queried.

#7 – Complex Nurture Streams

If you are a B2C marketer, then you can stop reading this. For the B2B people, I have seen crazy complex email marketing nurture streams that took months to design and implement. Some won awards. At the end of the day, I was never able to prove that they outperformed just a good weekly content distribution email to the entire database. The cost in peoples time and maintenance for these complex streams was very high. When the person who created the streams leaves the company, good luck. Before you embark on this quest, have the team prove through A/B testing that this complexity is really worth it.


Some modifications to CRMs are a good investment. The vast majority are not. Downstream maintenance costs, poor documentation of changes and the workload placed on your end users ultimately makes the ROI highly suspect.

Five Ways to Be the cMo – chief Mentoring officer

One of the best parts of being a CMO is mentoring sales and marketing talent. Mentoring shouldn’t just be 1:1, however. The key is to build an entire culture and organization that supports mentorship and career growth. Here is my list of 5 ways to create a mentoring culture in marketing and to become the cMo.

#1 – Be a mentor for the long haul

A person’s career usually will transcend your time with them at a company. Let employees know you are in it for the long haul for their career, whether it is at the company or not. Unplanned turnover stinks, but you can’t stop high performing employees from getting better opportunities elsewhere if your company can’t offer the same.

However, if you have built-in long-term career sponsorship and assistance as a benefit to being on your team, it makes it more difficult for top talent to leave.

If you love someone, set them free…..

Same for top marketing talent. Encourage their long term career growth, and they will appreciate their time on your team that much more. This starts with your direct reports and cascades down.

#2 – Encourage speaking at marketing industry events

Encourage your team to speak at conferences. A linked-in profile filled with speaking engagements at Inbound, Marketing Nation, Salesforce among others reflects on the caliber of people on your team but also helps with external recruiting and it also drives your employee’s career advancement. Yes, they might get more recruiter calls, but remember rule #1- you are in it for the long haul, which paradoxically helps with the short-haul also.

Getting your team to speak early and often isn’t easy. Push the team to submit speaking abstracts. When someone does something truly amazing during the year, encourage them to imagine the presentation they could make on the topic and push them to submit an abstract.

Most junior marketers have never submitted speaking abstracts before. Hold a training session on how to do this. Involve your PR person to assist and drive deadlines. Nothing energizes a marketing team and gets the competitive juices flowing than having some members of your team flying off to Copenhagen on the company’s dime to present at a top marketing conference. Everyone will want to do this. Goal your managers on the number of their direct reports who are marketing stars.

#3 – Defined, stretch jobs with onboarding guides and mentors

Nothing helps with career advancement more than giving people stretch jobs. On my teams, I generally put people in over their heads and see if they swim. All kinds of employee research probably says not to do this. But if you provide enough support, a trusting environment where people can ask basic questions and mentorship, you can make it work.

Onboarding guides are key for each job. For each job, have the subject matter expert build a skill list of the requirements to be successful. List the subject matter expert for each skill so your new hire can ask questions. When you are done with the process, have them update the guide. Using this process, you can build a great catalog of key skills for a job, and mentor your new hires at scale. This also builds confidence in each employee and builds overall organizational competence. And most importantly, it makes every subject matter expert a mentor to others in the organization. I served in the Navy on a submarine. This form of mentorship and onboarding is how you take a submarine crew with an average age of probably 23 and have them operate an extremely complex piece of machinery in a very hostile environment. You can make this work in marketing.

#4 – Embrace the 9-Box

Using the 9-box system to evaluate employee performance and potential is a key component of mentoring. If you can’t objectively discuss with someone in the organization where they are along these dimensions, it is difficult to provide meaningful mentorship. Institutionalize the 9 box and push your managers to have tough career discussions.

#5 – Mentor your PROS and career climbers differently

Long ago, I worked at PepsiCo (career mulligan #1 of 2), and Pepsi had a very defined method for building talent. I am probably not getting this all correct, but essentially, you end up with two types of people in the organization. PROs, were people who were never going to advance into management, but are extremely capable in their specialty. If you use a nine-box performance review method, these are people with limited upward growth, but they are tremendous performers. The other group of people is those who are climbing upwards, taking on new skills, learning.

To run an effective marketing org, you need both types of people in the org. The question is the mix, but the commonality here is that performance for both groups is high. PROs are your bedrock, the stability, the people who know where all the bodies are buried. The career climbers sometimes have sharp elbows that need to be coached. Not all your career climbers will survive, or stay as you promote some and others become unwilling PROs stuck in a role.

From a mentorship standpoint, you want to make sure you have tools, programs, and experiences for both. A career climber wants a broad set of experiences to build out their marketing stack. A PRO wants to be a deep specialization in their role. Training and mentoring these two types of people is fundamentally different.

Being the cMo is critical to building a healthy, effective marketing organization. An organization filled with mentors and teachers is a joy to be a part of.

PS- The Yoda in the ferns picture. The stock pictures of mentoring looked so boring. Yoda in the ferns, staring at you all day? You better mentor. Photo by Nadir sYzYgY on Unsplash

Ignoring the Sales Forecast and 5 Other Revenue Tips for a CMO’s First 90 Days

I have had a bunch of exits in my career. But all has not been smooth sailing.  From talking with other marketing leaders about their failures, and also thinking through the issues I have had over my career, a lot of the issues have come about when as a new marketing leader, you fail to figure out fast enough where marketing is actually driving revenue.  This is critical, since if you don’t understand what is actually working down to the details, it is very difficult to figure out how to pull the right levers to get growth going.  Pulling those growth levers takes time, and time is something you may not have depending on what is actually happening at the company.  Many CEOs without marketing experience assume that you can just spend your way out of everything.  That just isn’t the case.

So here are my six steps to use to understand what is actually happening with revenue and the impact on marketing.

  1. Ignore the sales forecast – To start this exercise, you need to ignore the sales forecast no matter how glowing it might be. The sales forecast is at too high a level to do you any good and can lull you into a sense of “everything is ok” when it is not.
  2. Understand the five funnel cohorts – Starting from the bottom of the funnel, start to work backwards seeing what you can understand and not understand from the data presented to you.
  3. Get to the true nature of revenue generation – it is important to get to the true nature of revenue. The following list of items might be getting reported as “revenue” or “sales growth” but in fact can mask underlying issues:
    • Bookings – bookings can mask all kind of issues especially when bookings are multi-year, or for products that aren’t shipping yet.   It is OK to tie marketing to bookings, but be careful that you understand what you are actually tracking.  Bookings make me nervous since boards may not care about them.
    • Bookings backlogs vs. actual shipments – especially in hardware companies, you can take bookings for future products.  This can mask the actual effectiveness of your operations.
    • Expansion of existing opportunities vs. net new revenue – There is a huge difference here between landing net new logos or divisions of existing companies and just getting more licenses into an existing account. Unless you are careful here, you can fool yourself into thinking that marketing efforts are driving net new revenue.
    • Multi-years – Sales teams love multi-year deals especially if they get comped on all of it upfront. Be careful here to really understand what is happening with revenue generation and be careful to split out what is a multi-year rollup from net new logos driven by marketing.
    • VAR sales, demo sales and other non-customer revenue sources  — careful about sales to channel partners obfuscating actual revenue growth
  4. Get to the source data – When you are doing #1, #2, and #3, make sure you get to the source data to prove to yourself you can show causation between marketing efforts and some portion of the revenue. This will also make you get personal with the data structure and the amount of data you have available to work with. Modern B2B teams are data rich, but poor in analysis. By the end of this exercise, you will understand your blind spots.  There are always blind spots requiring some assumptions but getting everyone on the same page of revenue scoring is critical. This is perhaps the toughest item to accomplish since it involves getting finance, sales, sales ops and marketing on the same page.
  5. Decide if you are in a growth, turnaround or steady state situation – This is probably the most important decision you will make and it must be based on all the above factors.  No matter what the sales forecast is saying, you need to determine what is actually driving revenue and make the call on how you will be operating. Sales is looking quarter to quarter for revenue from any source. Marketing needs to be looking several quarters out, understanding exactly what is driving revenue.
  6. Get the CFO, the CRO and finally the CEO all aligned on what is happening.  Only then can you take action and move forward.

You have about 90 days to raise any red flags you see in this area and to come up with a plan to correct operations.

Good luck!

9 Considerations for Becoming a Multi-Channel Revenue Machine

At some point in a company’s growth, the inbound only, USA only, inside sales only revenue model starts to run out of gas.  I have seen this a few times, and it is a function of:

  • size of the market
  • growth rate of the market
  • your revenue relative to the size and market growth
  • market maturity using Crossing the Chasm nomenclature
  • product reputation
  • keyword volume that is relevant to the market

The better management teams will be attempting to predict when this will happen, or will at least have some alternative strategies already in place so they can ramp up additional channels to keep revenue going.  All too often, the CRO is left on their own to solve this issue, when in fact, it is a cross company issue to get additional revenue streams going.

A partial list of incremental revenue streams available to B2B company might include:

  • channel – if appropriate add some resellers, consulting partners, maybe systems integrators
  • enterprise motion – roll up larger deals
  • OEM
  • customer expansion – more seats, licenses, products.  Get your accounts to eat more.
  • new products
  • services
  • education – free vs. paid.  usually room for both
  • outbound – targeted account penetration to specific accounts
  • new geographies – expand to other geographies and languages

As a marketer, here are the 10 things you should do to successfully transition marketing from a one trick revenue Pony (do Ponies take offense at this I wonder?),  to a multi channel revenue machine.

  1. Revenue alignment – the CFO, CRO must be tracking revenue segments the same way.  Ownership for particular revenue segments must be reportable and accountable to specific people on the sales team.  Once this occurs, you can then assign these revenue streams for ownership in marketing.  Pay particular attention to compensation plans.  Sales team will do the easiest path to revenue which makes sense.  A revenue goal of growing the installed base revenue by 20% doesn’t really matter if the sales team isn’t paid as much on installed base revenue as they are on new revenue.  A plan to hit $100M in ARR that relies on $30M in expansion revenue, yet no team has this as a goal will be tough to hit. And if finance can’t track any of this, you are going to have hard time aligning people to the goals.  Alignment, alignment, alignment. Finance to sales to marketing. Once it is assigned to someone in marketing, they need access to resources to make it happen.  It is easy to overlook these new segments when the majority of your revenue might be coming from inbound.  Consider organizational changes to give the people responsible for the new revenue stream  a seat at the CMOs table.
  2. Hiring targets –  BDRs get applied to a lot of situations.  Most don’t work.  Adding extra steps to qualify leads for low ASP sales models is one example.  If you are in one of these models, my condolences. But even in high ASP models, BDR plans can run amuck.  Make sure you run the spreadsheet models to understand the required staffing levels based on current conversion rates required to hit the revenue goals. If you have 20 BDRs, are you really going to add another 20 to hit a revenue plan? Maybe, and if this is the plan then great.  Now factor in recruiting time lag, training ramp up and see if the plan is feasible.  Then see if you have the lead volume to keep them busy.
  3. Geographic saturation – it is so easy to add reps in North America if this the headquarters that many organizations will forget the fact hat North America might not even be the largest market.   So while you are trying to figure out how to support a sales rep whose territory is a zip code in Oklahoma (sorry Oklahoma),   Italy is uncovered completely.  The US isn’t the largest market for a lot of products anymore.  Adjust your revenue strategy accordingly. (see #8 below on thoughtful expansion)
  4. Brand – while brand isn’t as important early on (some might disagree), as the company grows, the brand image is more critical. Invest appropriately as more and more people will make buying decisions based on reputation and brand. The key is to invest in the brand at the right time.
  5. The end of tribal knowledge – the best companies should have been building their internal knowledge and training systems all along. You can’t scale revenue if people don’t have the information at their fingertips to get their job done.  A good internal Wiki is key. It won’t always be perfect, but it should have enough info in it for an employee to get their job done.  Similar to this – marketing training.  Every week.  Marketing is so complex, you have to constantly train and spread knowledge on your team.
  6. Long live team leads – every time you add a manager, you are adding someone who doesn’t do front line work.  Managers should be painful to add since you have to trade off output for better process efficiency.  A good interim step is to use team leads as needed. As the leader of the marketing org, you can set the example by pushing yourself to keep the span of control wide, and the depth of the org chart shallow.  More managers don’t necessarily help.
  7. Thoughtful geo expansion – “We have to go to ANZ” said the CRO.  Why?  Well she knew someone there who was a great reseller. Seriously?  These type of geographic expansion issues happen all the time. Use numbers to drive expansion – notably inbound traffic numbers are a pretty good indicator to market interest.  Picking which geography you are going to move into based on prior behaviors is the worst way to make a decision. The ANZ one is particularly painful.  That is a big land mass, they have cool accents, it is a great place to visit.  But for some products, the market is super tiny.  You are better off biting the bullet and looking at other economies.  There is nothing worse than having little inbound interest from a region, telling the CRO that, watching them hire for that region, then you start getting on calls to talk about lead generation for a region that made no sense to go to in the first place. Sorry ANZ. Expand by the numbers, not feelings.
  8. Built in resiliency – As the organization grows, you have to build in some resiliency on the team.  The revenue generation machinery is just too important to slow down if you lose a team member. Make sure you have managers that can step into the shoes of their directs if needed.  If that isn’t possible, make sure you have access to outside agencies or contractors if needed.  Finally, if this is just not feasible, consider over hiring for a few select roles to give you this resiliency. If the company is growing, the work will fill this persons role. Roles that are tough to fill temporarily with agencies and contractors require a lot of local, company knowledge.  Pay attention to product marketing, your front end web designer, and SEO specialists.
  9.  Wipe out the bureaucrats – I know that isn’t very nice, but how many times have you seen a marketing team of 20 people only able to produce the output of a team of 5 people?  When the company started, one person did all the work.  If you built the team correctly, you slowly kept dividing tasks out so that one person owned one part of marketing.  You might have had one SEO person or one events person.  Where organizations get tripped up is when people get octopus arms and think they have to be “in the loop”, “cc’d”, stakeholder aligned on everything that happens (these are buzzwords I look for in interviews). You ran a blog before with 1/10th of a person, why does it now take one person to write it, one person to check it for messaging accuracy, one person to copy edit it, one person to publish it?  Don’t go down this path.  You certainly want a blog that is well written, on message, and published professionally.  Rather than making this one job a job for five people, invest in the tools, processes, and training so that one person can still publish a blog on their own, to the higher standard that your now bigger company requires. Consider using outside contractors for specific, non-critical steps, like copy editing.  But don’t take the job of 1 person and spread it across five.

Why Marketers Need to Love the Opportunity Cohort

The opportunity creation cohort is one of the key cohorts for marketers.  The handoff in effort from marketing to sales begins at this point.  It is also the point where you can start to measure revenue impact from marketing efforts.  It is the one of cohort you need to love, nourish, and be 100% in tune with the sales team on.  This is the one cohort that can avoid all the way too common sales and marketing drama. 

The opportunity cohort is a measure of the opportunities created in a given month or time period and the disposition of these opportunities over time.  The disposition of opportunities is generally won or lost.  Each disposition can then have greater details depicting why a deal was won or lost.

This is where the revenue rubber hits the proverbial road. Opportunities and deals, and what is driving them.  If you can’t figure this out, you don’t know where to drive (continuing the rubber and road analogy).


Hence tracking the source of the opportunities is as important as tracking the disposition.  Sources of opportunities could be marketing leads, partners leads, sales rep prospecting, or unknown bluebirds.  The challenge with bluebird opportunities is that you can’t reproduce an opportunity if you don’t know where it came from. Tracking the percentage of unsourced opportunities is critical and should be kept to as small a number as possible by sales management.

Tracking opportunities created back to marketing leads can help drive overall demand generation strategy as well as providing a good indicator to the length of time required for a lead to ferment from initial contact to opportunity. 

Looking at the disposition of the opportunities is important to determine overall win rate, but also the timing of the wins.  Out of each cohort, a percentage of opportunities created will close over a fairly predictable time frame based on the actual sales cycle.  Of course opportunity creation is impacted both the seasons and by management oversight.  The key is to track opportunity creation year over year by month and quarter to get a good feel for its velocity.

Since opportunities created drive the total pipeline size for the company, there should be an opportunity creation goal for each month.  This number should be based on the required total pipeline to meet revenue objectives. Most sales leaders do basic math for pipeline to close ratios.  This can get the company into trouble however.  But looking at opportunity creation and closing as a cohort, revenue prediction should improve.

See the chart below.  Assume that the company has a stable 15% opportunity close rate.  Assume the close rate is 8% for opportunities created in that month, 4% of the opportunities created close one month later, 2% two months later, and 1% three months later. The January row below is an example. Look at the row for January and you see that by April, 15 of the opportunities from January have closed for yield of 15%.  Of course, if yield is this stable for prior months, you also see in the January column that 15 deals will also close. But this is only from 8 deals created in January, the rest are from deals created in prior months, but closing in January.



If you model the opportunity creation cohort this way, you should be able to predict future revenues.  Indeed, let’s assume that March is unusually strong in opportunity creation, if the same in month close rates hold, with 200 opportunities created, you would expect to get 8%, or 16 closed deals.  The strong March would also provide stronger follow on months if the yield curve held. The yields for February and March are less than expected since more deals will close from those cohorts in April, May and June. Month to month variations in close rates and creation rates are to be expected.

Next up- the nurture cohort.



Demos and Meetings – The Pre-Opportunity Cohort

In prior posts, we looked at lead cohorts. In this post, we look at the next cohort down, the pre-opportunity cohort.


Many sales processes include an intermediary stage between marketing generating what is considered a hot lead, and the sales team generating an opportunity. Many times this process involves a business development team that might set up meetings or demonstrations or calls.  This pre-opportunity cohort is important to measure to understand how leads and opportunities are actually flowing through the system.  For example, let’s assume marketing generates 1,000 hot leads that are passed to the BDR team.  Let’s also assume that during that same period, the BDR team generates 100 demonstrations.  Without cohorting, a marketing team could falsely assume that they have a 10% hot lead to demonstration rate.  In fact, what could actually be happening is that the BDR team is generating meetings, not from hot leads, but the team is generating meetings from their own prospecting.  Cohort reporting is critical to figure this out.

What does this cohort look like?

The pre-opportunity cohort looks at all meetings/demonstrations generated within a particular time period from leads that are passed to the BDR team.  Unlike the lead cohort, this cohort looks up and down the funnel.  Up the funnel, the cohort looks at the sources of these meetings, tracking the percentage that came from marketing leads and the percentage that came from other sources.  It also tracks the process status for leads passed.  How many leads have been worked? Not worked?  The quality of processing metrics is important to understand since a high percentage of unworked leads in the cohort means the outcome statistics are less accurate.


For meetings/demonstrations that came from marketing leads, it is important to understand the timing of when those leads were passed to the BDR team.  A percentage of leads will have come from leads passed within the quarter, but many times the yield for meetings from prior period’s leads might be higher. Examing this will help explain the delay from when leads are generated to meeting creation.

For meetings and demonstrations generated from other sources, understanding these sources is critical to understanding how to change or alter marketing resource allocation.  While digital inbound efforts are always great, what if a BDR team actually gets a majority of their meetings from outbound cold calling?

Looking down the funnel is as important as looking up the funnel.  For a given cohort of meetings set up, understanding the opportunity conversion rates is important to both understand the quality of the meeting, but also to unearth issues that might be blocking opportunity creation.  Human factors such as sales teams that are shy about opportunity creation least they have to explain opportunity loss can skew opportunity creation rates. Sales managers driving towards pipeline creation can inflate meeting to opportunity creation rates and provide a false positive to marketing.

Managing the pre-opportunity cohort correctly drives these behaviors:

  • marketing to provide quality leads that convert to meetings
  • marketing to modify their resource allocations to align with what actually drives meetings
  • the BDR team to provide timely follow-up to new leads and correct dispositions
  • sales team to maintain consistency in opportunity creation criteria

Next up, we look at the opportunity cohort.


Understanding the Lead Cohort

The lead cohort is perhaps the most popular and talked about cohort for marketing and sales. Surprisingly, it may not be the most critical depending on how revenue is actually generated. The lead cohort is one of five key cohorts.

Lead cohorts at the most basic level are the leads that come in during a given time frame. Months are good timeframes for analysis. Once the cohort is established, the cohort can be analyzed as far down the funnel as possible. Since this is a cohort measurement, you will want to measure the cohort and its disposition at the end of the month, then at some frequency after that until the cohort is fully processed. Depending on your business cycle, this could take from 1 to 12 months until all the leads in the cohort have reached either a final resolution or are no longer being worked.

In addition to looking at the cohort from a time perspective, drilling down by region, sources and calls to action can also provide insight into the best performing channels. Theoretically, a cohort model should be able to provide the ability to look at how leads in a particular month, from a particular paid source, from a specific campaign, and keyword group performed.

How far can a cohort model look down the pipeline? Theoretically, a lead cohort should be able to go all the way down to a deal giving the marketing team the best indication of which lead sources drive the best leads. However, as leads flow through a typical B2B sales process, significant noise gets introduced into the system impacting the quality of the cohort report.

sketches-10 2

As leads enter the system, the first introduction of noise into reporting comes from the scoring algorithms, assuming you are using one. No matter how good an algorithm, it is going to start to distort the cohort since it won’t catch all the bad leads and it will catch some good leads. The good news is that the algorithm is constant and machine based. There are no finicky humans operating it.

At this point, you can measure the lead to marketing qualified lead ratio.  This is important to monitor since it provides an indication of how many actual hot leads are being created.

Now the leads are passed to the BDR team, it is time to measure the number of leads that end up in meetings, or demonstrations or other down funnel events.  Like the prior stage, noise gets introduced into the process.  Not all leads will get routed to the BDRs depending on their worldwide coverage. BDR compensation will drive how aggressively they follow up with your leads.  With too many leads and too low a quota for meetings, for example, the BDR team can cherry pick what leads to pursue. The opposite is true for too high a quota and not enough leads.  In this case, your leads could have little impact on the BDRs reaching their numbers and they spend their time chasing sources that actually help them.

Training of the BDR team is also going to drive conversion, along with how long it takes them to process leads and what their touch process is.

At this point cohort quality is still good, however, it is the next stage where quality starts to take a dip. At this point, meetings, evaluations, or other pre-opportunity events start to yield actual opportunities.  As a marketer, we want opportunity creation as one of the key goals of progress for our efforts.  However, noise starts to get introduced into the system in a much bigger way at this point:

  • in Salesforce, leads must actually be attached to opportunities for full funnel tracking.  If the leads are not actually attached, attribution goes away.
  • sales leadership can drive opportunity creation simply by pushing for more “pipe”. These sales pushes can drive up opportunities creation, but also distort lead success
  • complex deals often have multiple people associated with them.  If marketing delivers 100 names that are all associated with one deal, that is very different than delivering 100 names associated with 100 deals.

Once opportunities are created, the next stage of funnel analysis for the lead cohort is whether a deal was actually closed.  Measuring lead to deal close rate by cohort is problematic for all the reasons above plus:

  • deals tend to close the last month of weeks of quarter causing a hockey stick and making lead to deal closure stats inaccurate except at the end of the quarter
  • good leads generating good opportunities are subject to sales execution and competitive pressure to close
  • product market fit are key components of any closed/won deal

Lead cohort is one of the most important cohorts to marketers. Measuring short term results like conversion to meetings, trials or evaluations provides good short term measurement of the cohort. The further down the sales cycle leads are measured, the more noise is introduced into the system making the final lead to deal numbers less reliable.

Next, we look at the pre-opportunity cohort.

The Five Key Funnel Cohorts

Funnel cohort reporting is critical for marketers to understand exactly what is causing revenue generation. The concept of cohort reporting isn’t new to marketers. The campaign object in salesforce is a way to assign leads to a cohort and evaluate progress. SaaS marketers cohort their monthly lead to new customers routinely. But there are many other ways cohort reporting should be used especially in more complex sales cycles.

There are five different types of cohort reporting you might consider. Each cohort should be thought of as a weigh station on the greater customer journey from lead to deal to expansion. You can certainly do one giant cohort from lead to deal, but timing, data cleanliness and other issues will make that cohort less useful unless you operate an extremely simple and quick sales process. Most B2B journies involve multiple steps in the process with some steps dominated by digital behavior while other steps are dominated by human interactions.

The five cohorts are listed in the above diagram. Each cohort represents a group of prospects as they enter the next stage of the journey. For each stage, there are always “other” sources to the top of that stage as marketing is not the only source to a pipeline stage. For example, the opportunity creation cohort might have opportunities that came from the business development team scheduling a meeting that was sourced from a marketing lead. Or the opportunity creation cohort might have an opportunity from a bluebird lead without an identifiable source. The combinations are many.

Each of the five cohorts tells a different story. The five cohorts are:

  • lead cohorts – from lead creation to disposition as a meeting or opportunity or even a deal. However far you can measure comfortably, lead cohorts may give you the ultimate read on how well you are doing creating pipeline. “May give” is the operative word, as all kinds of factors, humans among the top one, can influence how far down the sales funnel you can accurately measure your lead cohort which is my other cohorts are as important.
  • pre-opportunity cohorts – many companies use intermediate checkpoints like meetings, demonstrations, trials that sit between a lead getting created and an opportunity. Marketing qualified leads and sales qualified leads could also be checkpoints that are pre-opportunity. These pre-opportunity cohorts might have been created by recent leads or might not. For teams with business development representatives, getting meetings or demonstrations set up are their key goals. The source of these meetings might not be your leads. Knowing what is happening in this cohort is critical since ultimately this is the first time sales touches your leads.
  • nurture cohorts- leads drop into nurturing and hopefully with work resurface somewhere. Organizations can spend tons of time fine-tuning nurture streams such as Marketo or other marketing automation system. The question is whether it works. Watching your nurture cohort should provide the answer.
  • opportunity creation cohorts – once opportunities are created, what happens to them? Where did the opportunities come from? How many get created in a given time period, and over time, what was the close rate? Following these statistics will help spot decreasing close rates, overly zealous opportunity creation rates and other outliers.
  • deal cohorts – unlike the other cohorts which start at the creation date, a deal cohort looks backward to explain where the closed deals came from. Deal cohorts should be explainable from month to month in terms of deal age, mix, and size. Growth will cause some of these variables to change, but the changes should be slight on month to month basis. Looking at customers are deal cohorts also provides an expected expansion model.

Each of these cohorts –

  • tells you something different, hence drives the sales cycle and actions differently
  • is measured differently
  • has its own drill downs and derivations. You might want to look at the lead cohort by region, or by source, or source and region. Your ability to drill down is only limited by the tools you are using for the analysis
  • has its own quality scoring methods. Quality scoring is critical. If you want to measure the lead cohort, for example, all the way to deal, but only 25% of your deals actually have leads associated with them, then the quality of your cohort information will be low. Similarly, if you are trying to understand the opportunity creation cohort, but most opportunities are only opened when they know they will be closed won, then that cohort won’t have high quality
  • has there own unique yield curves. Leads, for example, might yield meetings within the same quarter. Opps created, however, might not close for several quarters, but beyond three quarters, opportunities are unlikely to close. Understanding the yield curve as a function of time is useful for predicting the future.

In our next blog, we will dive into these cohorts in greater detail. You could say we will cohort each of the cohorts.