The Isolation Problem: Silos and How to Tear Them Down
Alan Weiss once said something that sounds like common sense:
“The purpose of a business is to offer value (through products and/or services) to customers, who pay for the value with cash or equivalents.”
So, how come the core functions (Marketing, Sales, Product, and Customer Success) of most B2B businesses have completely different goals than this one?
If we try to define the purpose of these four functions in a similar manner, based on how we really operate, here’s what we’ll get:
- Marketing: trigger as many prospects into leaving their contact information so Sales can contact them
- Sales: spam as many of those leads with outdated tactics, as often as possible, until they become a customer
- Product & CS: make the most of what you’re left with after Marketing and Sales have done their job
Let’s imagine how this plays out in a scenario where, for example, Marketing is extremely efficient at achieving its departmental goals (i.e. generating as many leads as possible):
- Marketing is hitting its goals and is being rewarded for it
- Acquisition costs are rising (70% increase in the last 6 years)
- Sales is stretched thin because they have to inspect, qualify, and follow up with leads
- Over 90% of Sales and Marketing efforts are wasted since these leads convert to customers at zero-point-something rates
- You need to continuously expand your Sales team (and also account for high turnover)
- Most follow-ups or demos end in closed losses and win rates continue dropping
- Sales is either barely hitting their goals or not at all
- You’re annoying most of your market by treating your prospects as active buyers when in fact 95% are not interested in making a purchase any time soon
Now, let’s remember another quote from Peter Drucker:
’Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation.’
So, if extreme success for one of the two core functions of a business (Marketing) doesn’t lead to success for the entire organization (we could argue that it actually does the opposite), how can we achieve better alignment and how can we tear down departmental silos?
There are a lot of reasons why most B2B organizations operate this way. One of the main ones is the limitations we face when it comes to tracking and analytics. Lead generation models are easy to track & measure, and so we stick to it until we have the ability or tools to measure a different, better model of operating a business.
In this article, we’ll show you how you can tear silos down and align your core business functions around the same goals by using more sophisticated tracking solutions and adequately understanding your customer journey.
Let’s start by understanding the rotten truth of B2B land.
Marketing doesn’t follow leads through to conversions
A careful observer can easily conclude that, in your everyday B2B lead generation environment, more than 90% of marketing efforts literally go to waste.
The main reason for this is the fact that Marketing simply doesn’t follow leads through to conversions.
Well, there can be many answers to that question:
- We’re measured on leads, so why would we care?
- Data simply doesn’t exist
- Data exists, but we can’t access that data
- We can access data, but we need developer/data scientist support to get it
- We don’t talk to customers and create content for fictional buyer personas
Regardless of the reason, we’re left with a marketing machine that is optimized for gathering leads, which most of the time, simply means prospects who downloaded our content (whitepapers, reports, ebooks, etc.) in exchange for their contact info instead of optimizing for people actually paying for our product.
This creates a ton of misalignment between marketing’s and the company’s goals. You’re continually optimizing for the type of activities (strategies, tactics, campaigns, etc.) that don’t help you achieve your company’s goals.
Here’s a real-life example of the consequences of this approach to marketing:
A well-known B2B company was going hard on demo request incentives, offering $100 gift cards for each demo booked. Things looked great on their dashboards: aggregate cost per SQL went down, while SQLs/month increased.
They even used their presence on LinkedIn to preach this tactic to the rest of the world, having a lot of success with it themselves, it seemed like a nice thing to recommend to others.
What they hadn’t accounted for was the fact that this success was due to their baseline growth – organic growth coming from their growing presence, increased brand affinity, word of mouth, etc., instead of their gift cards incentive.
When they (finally) properly visualized their customer journey with HockeyStack and looked beyond the lead stage, they learned that the SQLs coming through the campaigns that offered gift cards were not converting, turning out to be a waste of resources, while also skewing their data.
By analyzing this example, we can see that if marketing doesn’t follow leads through to conversion, we’ll never really understand who our best buyers are, what companies and segments they come from, how they behave, where they spend their time, and how we can attract and convert them.
Instead, we’ll just keep enforcing the vicious cycle of poor data > wrong insights > poor decisions > wrong execution and waste most of our resources on the wrong things.
You can get away with this for some time, especially if you have a solid product-market fit, a good reputation, and a healthy word-of-mouth loop going, but for how long? And what then, is Marketing’s contribution to growth?
Data is limited, not centralized, and hard to access
Two teams, Marketing and Sales, look at the same report: leads generated per quarter.
Marketing thinks: ‘We’re generating 15% more leads this quarter. Cost per lead has increased only by 10%. We’re hitting our goals. Things are looking good.’
Sales, on the other hand, sees: ‘15% more leads that will never convert, regardless of our endless follow ups… we’ll never hit our goals. Damn it, Marketing.’
So, how can we talk about alignment when the success of one team means headaches for the other?
Sales is strongly held responsible for revenue – their jobs literally depend on it. How long can Sales keep hitting their goals if they depend on Marketing to generate leads for them, and Marketing doesn’t focus on, or worry about, getting quality leads that have higher win rates, retain longer, will actually use the product, and spread the word about it to their peers?
How long until Sales turns to spammy tactics of endless follow-ups & tone-deaf outreach and starts annoying your entire market just to be able to squeeze more deals from the low-quality leads Marketing sourced?
The solution is simple: provide every department with access to data on the whole funnel.
Complete access to customer journey data is the starting point
We can all probably agree that everyone can benefit from easy access to better data. But, how much are we doing to really get there?
Let’s look at a few examples of how each core function can benefit from gaining visibility into customer journey data.
Why Marketing needs customer journey data
In most organizations, Marketing stops caring once a prospect turns into a lead. On top of that, sales data (Salesforce) and marketing data (HubSpot) don’t talk to each other, making it difficult, if not impossible, to connect the dots.
This produces an enormous waste of resources since marketing focuses on generating leads.
Here’s how marketing benefits from having access to customer journey data:
- Better understand which leads turn into ideal customers (the ones that convert, have shorter sales cycles, activate quicker, and retain longer)
- Understand what those customers have in common (behavior, demographics, company data, use cases, etc.)
- Improved targeting, reduced/more efficient spend, more resources left for doing ‘real’ marketing (creating memorable experiences instead of ‘book a demo’ direct-response campaigns)
- Identify high-intent visitors/leads/accounts and craft timely, personalized ABM campaigns for them
- Understand what activities, campaigns, and channels contribute the most to qualified pipeline and revenue
- Over time, get to know your customer better than anyone else
Why Sales needs customer journey data
Having context around the customer journey of each prospect is a key benefit for the sales teams.
But it goes beyond that:
- Understand the stage of each prospect’s customer journey, providing you context and insights that help personalize outreach, follow-up without being tone-deaf, etc.
- Improved targeting of high-intent accounts
- See all the previous touchpoints prospect had so far
- Identify who decision makers through an account-level customer journey overview and save time by reaching out to them
- With an increasing number of effective sales content creators, better understand how your content is contributing to inbound requests, sales cycles, engagement, and more
Why Customer Success needs customer journey data
Customer Success often doesn’t get a seat at the revenue table, even though it is held responsible for crucial tasks like onboarding, upselling, and activation.
With access to customer journey data, they can:
- Better understand what key moments and triggers to pay attention to in the customer journey
- How their actions affect key metrics like retention and activation
- Understand each customer’s needs better by looking at their pre-conversion data, product usage patterns, company data, etc.
- Finally be recognized for their contribution to growth goals
Why Product needs customer journey data
Just like Customer Success, Product teams are often barred from having access to data beyond product analytics. But what if they were able to:
- Understand how each customer converted, and what their first interactions with your brand wereKnow if they came through a self-serve process or talked to Sales
- Identify who the product champions are, who the most active users are, who owns the budget, and calls the shots
- See what content they consumed and how that affects adoption, product usage, etc.
- Identify what customers that retain longest and have the best activation metrics have in common (behavior, company data, segments, use-cases, etc.)
Once all core business functions have unrestricted access to customer journey data, we can begin working on improving GTM alignment.
Now, let’s see how we can achieve that.
The antidote to functional silos
The need for tearing down silos between different functions isn’t new, and therefore, we’ve already seen a lot of different proposed solutions.
And so, this article wasn’t created as the ultimate guide to tearing silos down, with easy solutions you can implement the next day or even next quarter, and is definitely not insisting on being the best advice on this topic.
A lot of very smart people have tried to fix this problem, and, if we take a look at the B2B world, we can conclude that the right solution still hasn’t been found.
Instead of prescribing you a simple one-size-fits-all solution, we’ll try to give you a few ideas that can help you start working towards better GTM alignment. Eventually, it’s going to be up to you to drive this change and tailor a solution that works in your organization.
Break down communication silos
Simple acts of communication can go a long way. Here are some activities you can try out:
- A cross-functional weekly/monthly review of a representative sample of the complete customer journey
- Marketing and Sales will start developing a better understanding of what prospects/customer go through before/after they leave their area of responsibility
- Everyone will start understanding the customer journey and the customer itself better
- It will become clear what the best customers have in common, what leads don’t convert and are a waste of resources, etc.
- Introduce knowledge sharing, as well as Sales-to-Marketing & Marketing-to-Sales reports
- Weekly update from Marketing to Sales, sharing what they’re working on, what initiatives have been working best, what experiments they’re running, customer research insights, etc.
- Weekly update from Sales to Marketing, report on activities, what they’ve learned about common objections & pain points that come up in sales conversations, etc.
Revenue is the outcome, not a goal
Everyone inside the company should work towards the same outcome – revenue. All of us can agree on this, but things become difficult when we all have our own way to interpret this idea.
Let’s start with two facts:
- Historically, the Sales department was the only one responsible for driving revenue
- More recently, Marketing’s responsibility for driving revenue (pipeline) has been growing
The former has been problematic in so many ways: it has put too much pressure on Sales, left them isolated from other departments, caused Sales to (over time) evolve in the direction of spammy tactics to hit their goals, while leaving everyone else safe from judgment because they’re ultimately not tasked with growing revenue numbers.
And recently, we’ve seen a lot of benefits from marketing holding more responsibility over driving revenue. Marketing has gained a seat at the revenue table, is becoming more than just sales enablement, and some companies have started pursuing non-traditional strategies and tactics with more success.
But, along with those benefits, we’re also experiencing negative consequences because of the assumptions that stem from marketing’s increased responsibility in driving revenue:
- Every marketing initiative needs to drive immediate revenue
- All marketing initiatives should have measurable effects
- Short-term marketing goals are being prioritized over long-term goals and efforts
If everything the marketing department does and produces needs to fit this criteria (activities that drive immediate revenue and are measurable), all you are left with is the same old direct-response initiatives.
Most of the time, this means the same lead generation campaigns we all hate (both as customers and marketers).
Furthermore, if we agree that not just marketing but all business functions should work towards the same goals/outcomes, be responsible for revenue, and still do what we always should have been doing (educate the target market by creating memorable experiences and removing friction in the buyer journey), then there is a bigger task we need to accomplish first.
We need to address the objections that are in our way ( i.e., marketing should only work on measurable activities that drive immediate revenue).
If we first tackle the measurement & attribution problem (all marketing activities should have measurable effects), the other two objections will be easier to solve.
The solution to this problem is simple, but it requires us to abandon how we currently think:
- The B2B customer journey is linear and simple
- A single touchpoint or team can be responsible for the conversion and be given credit to
- Simple attribution models provide enough context to feed strategy
If we acknowledge that this line of thinking is outdated (and simply wrong), we can start solving the attribution problem with a new way of thinking:
- The B2B customer journey is complex; we need more data to truly understand our buyer
- A single touchpoint or team cannot be fully credited with a conversion; we need to understand the entire journey and figure out what touchpoints collectively impact conversions before having conversations about ROI
- No attribution model is perfect; a combination of attribution models is the way to go
Once this new way of thinking is accepted and you’re able to show the joint impact of most activities on revenue by visualizing the customer journey, handling the remaining objections becomes much easier:
- You can show the impact that different (e.g., long-term, brand) initiatives had on revenue
- You can, over time, get more buy-in for doing more essential marketing activities (i.e., not direct-response)
- You can dedicate more resources/budget to activities that contribute to revenue in the long-term
The overlap between what leadership wants (measurable activities that drive immediate revenue) and what marketers want to do (impact pipeline now and in the long term) grows larger and creates a growth curve less dependent on short-term campaigns.
This prepares the ground for making real changes in how we structure both company and department goals.
Derive departmental goals from company goals
One of the key issues with setting departmental goals is the fact that they’ve been endlessly copied/pasted and applied as a one-size-fits-all solution.
Over time, we’ve put less thought into this, and tech vendors have only worsened it. Most of them will provide you with a set of predetermined metrics that you need to accept and use.
From there, you’re left with a strategy built around goals and metrics that were never made to suit your business.
Here are a few signs that help you determine whether you’ve set the wrong departmental goals:
- The success of one department doesn’t increase with the success of the business
- More success for one department means less success for another
- The goals of one department work against the goals of another
- Your goals are not aligned with the goals of your customer
- There is a dysfunctional relationship between different departments
A certain level of simplicity needs to exist in your department goals, i.e. your teams should be measured on a single main metric. However, oversimplification leads to all the problems we’ve listed above.
If your marketing team is measured on leads, that’s what they’ll optimize for. So, we need to introduce additional layers to this goal. The formula can be pretty simple:
High intent lead + fits ICP + an indicator that they’ll experience more value OR bring more value to the business
Here are a few examples:
- High intent leads that sales convert at >X%
- High intent leads that share X & Y with customers that retain the most
- High intent leads with the highest activation rates or X users per account (especially in product-led businesses)
The only way to properly define these north-star metrics for your teams is to dig into your data and draw conclusions directly from your customer journey dashboard.
Only first-party data will help you in this — no amount of third-party data or industry benchmarks will be enough to replace these insights.
Even then, this metric will always be a lagging indicator of success. When X (north-star metric) is down, where do you find the answer to what you need to do in order for X to go up?
You must dig deeper and set secondary goals to find those answers and build the right foundation. We can also refer to them as objectives, i.e., smaller goals you must accomplish to accomplish your main goal.
The idea is simple — base the north-star metric on company goals (revenue), and then create your strategy around what you need to do to hit that north-star metric.
A few sample objectives could be:
- Spread awareness among your ICP at the lowest cost possible by creating strategic influencer partnerships
- Become the go-to place for education for your ICP by creating a resource hub, tactical case studies, etc.
- Provide a smooth sales process built around how buyers buy today, such as maintaining a same-day response to demo requests, involvement from customer success, etc.
- Create a frictionless onboarding experience using product-led tactics (free trial, ungated product tours, etc.)
- Create a strategic narrative that fuels your content engine and helps your target market understand the value of your product
Then, you should take this list and assign each objective to the right department, e.g., customer success is tasked with creating tactical case studies.
These objectives (the milestones required to hit growth goals) need to be reviewed yearly or even quarterly, adjusted as your strategy shifts, and will finally enable your goals to reflect your approach.
Tearing down functional silos is a big task. GTM alignment has been a problem for as long as most marketers can remember.
No one-size-fits-all solution will work in your organization, and it will be down to you to find the right one. Even then, it needs to be an evolution, not a revolution.
Still, there are some guardrails and rules that will help you in these efforts:
- Success for one team needs to positively impact the success of another
- Departmental goals need to reflect broader business goals and strategy
- Simple acts of communication go a long way
- Insights from your first-party data are your best ally
- Cross-functional alignment will be an evolution
- Experiment and work on your feedback loop
- Teams need to care about their contributions to growth goals beyond their area of responsibility (e.g. marketing needs to follow leads through to conversions and beyond)
- Communicate well and plan together (e.g., GTM teams reviewing customer journey data weekly)
Here’s to tearing functional silos down. Good luck.