Marketing and Sales Alignment: How Siebel Does It
Siebel Systems is best known for its commanding share of the CRM market. Recently, the company has opened up to showcase how it uses its own marketing software to support some of the best practices in marketing and demand generation. You need not worry; this is not a Siebel commercial. As you will quickly realize, this is mostly about organization, process, and measurement. Here are some of the highlights, based on Andrew Clarke’s presentation at the Marketing Roundtable and a similar presentation given at a Siebel webinar.
Structure the Organization for Alignment
While not the first to recognize that marketing and sales are inseparable processes along the demand generation continuum, Siebel has stepped forward to structure its sales and marketing organizations accordingly.
The role of sales is to issue proposals, demonstrate solutions, and close deals. Simple enough.
Marketing has multiple roles, and the organization is structured accordingly. Corporate Marketing handles branding, PR, analyst relationships, tradeshows, etc. The Field Marketing organization is responsible for demand generation. To ensure that marketing programs deliver responses that fit sales targets, the people responsible to these programs are placed close to the sales organization and out in the field. Field Marketing Managers work with their sales counterparts to design and execute lead generation programs that are based on sales-driven goals.
In addition, Siebel has a Sales Development organization designated to serve as the glue between marketing and sales. The role of sales development is to qualify prospects, gather and validate account and contact information, and create opportunities for the field sales organization. To do that, sales development utilizes both inbound responses generated by marketing campaigns and outbound reach efforts to target accounts.
After a number of experiments with outsourcing, Siebel now keeps the sales development function in-house. It is primarily a matter of the quality of the people and the tight control over the processes they use. The people Siebel hires for sales development positions are usually college graduates. They also get extensive training to ensure they can represent the company adequately and develop an appropriate level of conversation with the people they call on.
Define a Unified Process
As expected, the unified process starts with a clear definition of goals. In Siebel’s case, these goals are:
- Ensure that sales pipeline is three times the size of sales targets for the next quarter
- Generate a third of the sales pipeline through marketing campaigns (the two other major sources are inbound and outbound sales)
- Agreed upon goals for cost per opportunity (Siebel is not sharing this number)
- Penetrate twenty new accounts in each region
- Acquire and maintain 30+ accurate and relevant senior contacts for the top 2000 major accounts worldwide
Do these goals look familiar? The last two on the list point back to our mantra of “Know Your Customers”. Most enterprise software companies target a rather limited universe of prospects, so identifying them is actually not as hard as it may seem. As nicely put by Andrew at the Roundtable panel, “there are only 2000 Global2000 companies!”
Now that the goals for demand generation are clearly defined, next step in the alignment of sales and marketing is to define an agreed upon handshake process. Unlike most outsourced telemarketing outfits, Siebel Sales Dev Reps use no guided scripts. At the same time, they utilize very clear and well-defined criteria to qualify prospects. This razor-sharp qualification criteria is one component in a clear and well thought-out handshake process.
A company-wide guideline mandates that any new leads passed from Sales Dev have to be followed up by sales within ten business days. At that point, sales can either accept ownership of the lead or reject it. Any rejected lead must be accompanied with a standard set of rejection criteria to help marketing analyze the results of their activities relative to lead generation goals. This is a tight closed-loop process that clearly defines ownership and accountability for every lead and opportunity at every stage of the marketing-to-sales process. In the first year of instituting this process at Siebel, acceptance and pursuit of new opportunities by the sales force has increased by 75%. Amazing!
Measure Each Step Along the Way
Andrew presented a dazzling array of dashboards, measuring pretty much everything that can be measured, in real-time. It’s a wonderful showcase for the Siebel marketing module, which the company uses internally with great success. Not everybody has such system at their disposal, and I would guess that even those that do would have to invest significant time and resources to get to the level of use exhibited by Siebel’s own.
Generally speaking, the metrics used by Siebel fall into one of two categories:
- Operational metrics: these are focused primarily on measuring response rates for the various marketing programs, but also include measurements of internal performance metrics such as lead follow up time. Within less than nine months, Siebel has seen a phenomenal increase of 50% in overall response rate!
- Economic metrics: these are focused on the cost to generate and move an opportunity to maturation. Using the practices described here, Siebel was able to reduce the cost per opportunity by 25% over a six-month period.
Recognize Where You Are on the Technology Adoption Lifecycle
The emphasis on a programmatic approach to demand generation has not been part of the Siebel way of marketing in the early days. As the enterprise CRM market has been transitioning from an early adopter market towards the “main street” phase, the company has shifted its marketing focus from branding and educational activities to systematic demand generation directed at expanding sales pipelines and accelerating deal closure.
While Siebel uses clear qualification criteria to drive ready-to-buy prospects through the sales pipeline, it does not necessarily give up on companies that “should” be Siebel customers but have not yet defined a CRM project or budget. However, to avoid slowing down its mainstream sales efforts, Siebel addresses these late adopters with special “solution selling teams”. This is a great example of aligning company structure and processes with its customers (or prospects, in this case)!
Takeaways for the Smaller Software Company
“OK,” you say, “this is all very nice, but we are not Siebel!” What are the lessons to be learned for companies that do not have the scale, the resources, and the tools affordable to Siebel?
1. Many smaller companies tend to dismiss structure and processes as a “big company thing” and believe that team spirit and close quarters will take care of marketing and sales alignment. In most cases, they are wrong. No matter how small the company is, alignment will not happen without a top-down mandate and supportive organizational structure and processes.
2. Of these organizational elements, the most important one in my mind is the designation of a specific role for transitioning leads from marketing to sales. These are the equivalents of Siebel’s Sales Development Representatives in your organization. Without this specific role in place, neither marketing nor sales have the resources or the incentive to ensure the transition works.
3. Define clear goals and measure diligently against these goals. Do we need to say more?
4. Invest in tools that enable clear transfer of ownership of leads from marketing to sales and provide built-in performance measurements. When you look at the opportunity cost of not following up on marketing leads or investing in poor performing marketing tactics, the cost of automation tools becomes an easy justification.
5. Know your target market: even a smaller company can build and maintain a database of its target market contacts.
6. Being a leader in a maturing market, Siebel focuses its resources on prospects that are ready to buy. As we’ve written in previous articles, companies that are new to the market and sell to early adopters have to invest more in solution selling. The important thing is that you understand where your prospects are in the adoption cycle and use a sales process that fits.
I hope this helps. Let me know what you think about Siebel’s marketing and sales alignment and how it applies to your situation.
Eran Livneh is the founder of MarketCapture (http://www.MarketCapture.com), helping software companies enter new markets, introduce new products, and increase market share. Eran is also the publisher of the MarketCapture Newsletter (see past issues and subscribe at http://newsletter.MarketCapture.com).