“Help, our new CRO is demanding that Marketing double its contribution to pipeline from 30% to 60%,” exclaimed a 3x CMO at a ½ billion-dollar cybersecurity firm. While I grimaced, several CMOs in our community offered counsel AND benchmarks from various sources. Armed with this advice and data, our harried CMO negotiated, landing at a challenging but not impossible goal. Crises averted. A win for CMO Huddles. Rant to follow.

In What World Is It Okay for the Head of Sales to Set Arbitrary Goals for the CMO?

And I thought irrational requests were the exclusive domain of PE firms. These are the fine folks of legend (and my prior rants) who cut the budget by 25% and then raised the revenue target by an equal amount. (This is much more common than we would like to believe and is still happening almost daily in Silicon Valley). But I digress. In the case of PE firms, it’s their capital. Not so with the CRO. It is not just bad form for CROs to make crazy-ass demands. It’s bad news for the organization since it instills a Marketing versus Sales divide.

Should CMOs Willingly Commit to Any Pipeline Contribution Target?

Allow me to waffle on this one for a bit. Many CMOs do so happily. Why? Because they have lots of historical data to show that Marketing is already driving a healthy percentage of pipeline. This is particularly true for PLG brands with a freemium offer, often targeting SMBs. I’ve spoken with CMOs in these orgs who can show that 90% of revenue is driven by various marketing activities. These CMOs feel pretty good about their job security, assuming their customer acquisition costs stay significantly below customer lifetime value.

What’s with the waffle?

Let’s take your basic $500 million tech company with a 12-month sales cycle and a lifetime value per customer of over $1 million. According to recent Forrester data, there will be 22 people on average involved in that buying decision, 9 of whom don’t even work at the company. For the sale to occur, Marketing must touch more than 90% of the buying committee multiple times. Does it matter who initiated the first, fifth, fiftieth, or last touch? It shouldn’t. And that’s just one reason why obsessing about sourcing is so problematic.

What’s the Solution Then, Oh Wise Sage?

Joint metrics focused on improvements over time, such as win rate, deal size, retention rate, growth of LTV, advocacy rates, and more.

I've said it before, but it's worth repeating: GROWTH IS NOT A STRATEGY. It’s an outcome of a fully aligned C-suite.

Written by Drew Neisser