09.23.03
 By
Eran Livneh
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.
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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.
About the Author:
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).
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