Sales and Marketing Punch to the Gut

June 1st, 2011 by Matthew Rosenhaft Leave a reply »

I am the SVP of Sales and Marketing, which means I am more sales than marketing. I am responsible for hitting our revenue numbers and someone else is responsible for operations, delivery and whatever else we need to make the customer happy. My job is to get us in front of customers and close them on our solution. Our offering is highly complex, very technical, and really a niche within a larger market.

My customers take a long time to purchase, bring everyone around the table who could possibly have an opinion, and require lots of customization. In short, our average sale cycle is greater than 12 months long, sometimes 18 months and the average price tag could be anywhere from $200K to $2-5M, though our largest projects could be in the $10-20 million range.

My sales team is regionalized and we fluctuate between 15 – 17 reps in the US and Canada with another 6 internationally. We also sell through international channel partners which gives us coverage in about 20 -30 countries, but 65% of our sales comes from North America. In reality, my top 5 reps do 50% of my sales. I churn 5-7 reps a year due to poor performance and occasionally lose a good one to another competitor or complimentary industry.

I have a VP of Marketing who manages our marketing communications, website, product marketing, tradeshows and events, sponsorship and advertising in our industry trade publication, pay-per-click advertising on Google, and inside sales team. Product management is owned by the SVP of Engineering, who is my counterpart. We recently added a LinkedIn page and a twitter account and have talked about a Facebook page and possibly a blog, but I don’t really understand what that does for us. We have an agency that we use for creative ad development and another firm that helps us with the website. We have an email marketing automation system, use Salesforce for our leads, and Google analytics on our website.

In short, I look like you, my company looks like yours. We have survived the recession. I don’t care when they say it officially ended, sales are still not where they were a few years ago. We have survived by cutting costs, streamlining our operations costs, and cutting out a lot of our traditional sales and marketing costs. We switched to an email newsletter, we cut down on the number of shows that we go to, cut out a lot of our advertising, etc.

Half our leads come from either our direct sales force, referrals, or from tradeshows. Another 15% comes from our pay-per-click advertising. The rest is a mixed back; email marketing, web leads, trade pub advertising, etc. Most of what our marketing team gets in isn’t so great, but the inside team manages to filter most of it before it hits our sales guys. They are pretty much always complaining about the lack of sales leads, but that isn’t new.

I am ok, been here a while, and we know what we are doing.

But, I will share with you my concerns. My boss, our CEO and founder, is getting anxious. In our last board meeting, they were asking for more aggressive growth targets for this year. Considering 1/3 of my team were struggling to hit quota and we are cutting the sales and marketing budget 5% again for this upcoming fiscal year; I am not sure what I am going to do differently.

And here is what I haven’t told my boss…. My guts is screaming that we are not getting enough opportunities like we used to. A few years ago, we were in front of a lot more people. We are closing deals, but we are working a lot harder for them. A lot more customizations, more competitive situations, more hoops to close, and it is taking longer too.

I have made some adjustments; I am giving new sales guys a much shorter runway. Either they create opportunities within the first 6 months or they are gone. We can’t afford for them to waste a year. It is harder to find guys who have really good rolodexes too. They also want a lot more money. Especially the ones that are already working in the industry. We had to pay a headhunter a lot of money to get the last one and then he was gone after 8 months.

I have seen my team’s sales reports. My sales managers are telling me their folks are having a hard time getting in front of decision makers. They aren’t getting the appointments like they used to. The customers are too busy to meet or they come with very specific demands or we get a RFP. Hate those things. Always wired to a competitor. We try like crazy to get in earlier and influence the requirements, but we can’t always get in early. But, we have to play the game otherwise we wouldn’t get the business. Impacts our margins, though.

Our distributors seems to be pretty steady. In reality, a couple really produce 80% of the volume, but the rest provide enough volume to keep them. I wish I could figure out how to get them to sell more. We have tried about everything; education, sales meetings, marketing collateral, lead incentive programs, ride-alongs, etc. Nothing seems to move the dial.

Marketing is also having a hard time. Our email lead rates are down. The Google pay-per-click stuff is mostly junk and the price keeps going up, but they provide some leads so we can’t cut it off.

We have managed to hit our numbers for this year, but I am not sure how I am going to hit the new targets. I have gotten permission to hire 2 more sales folks, but the last search took 4 months and we won’t get any help from them for a few months after that. Also, we got a ton of candidates, but most of them were not qualified. They didn’t have the industry experience, didn’t really know how to sell. All of the good ones are already employed anyway. Hell, for most of them, it seems the last deal they closed was to get the job. Maybe we will find a rockstar out there.

Look, I will figure it out. The number is a lot bigger for next year, but we always seem to find a way. Its not like my job is on the line. My boss is anxious, but he knows I am good. The board has been pushing him the last year or so to get the performance going, but it isn’t our fault the market is down. It isn’t like everyone isn’t having the same problems. It kinda sucks that my comp plan is tied to that higher number though. I need that bonus with the kids in college. Do you know what it costs to keep 2 kids in college these days? Tuition went up 12% again this year.

I really can’t lose that bonus. We need to find a way to hit the number. I am not sure how we are going to do it, but we gotta find a way….

My sales team is complaining about the higher quotas. They are blaming the market. I can see it in their eyes, they are worried. They are pushing back on marketing to find them more leads. Marketing is pushing back that they don’t follow up on the ones they send them. Back and forth, round and round. Someone better have an answer because this isn’t helping.

Crap, they are looking at me to have the answer. I don’t have one right now, but I will figure it out. I always do… It will be fine, we will be fine…

Matthew Rosenhaft

Matthew is a Social Marketing Executive and is co-founder of Social Gastronomy, LLC and the Social Executive Council. Prior to founding Social Gastronomy, Matthew has over 18 years’ experience as an executive in marketing, product management, and sales. Matthew has an extensive background in the SaaS Software, Social Media, Mobile, IT Services, and Telecom industries. He has prior entrepreneurial experience as a founder and executive in several early-stage venture-backed technology companies, as well as, holds several US patents for a mobile marketing technology. Matthew is a prominent blogger and regular industry speaker on social marketing and strategy topics. Matthew’s blog can be found at www.socialgastronomy.com/blog. For more information on Matthew, you can check out his LinkedIn profile at www.linkedin.com/in/rosenhaft or contact him directly at mrosenhaft@socialgastronomy.com.

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