As previously published on 12/11/23 in MarTech
Catch-22, written by American author Joseph Heller, was published in 1961 and is often cited as one of the most significant novels of the 20th century.
Much of Heller’s prose in Catch-22 is circular and repetitive, highlighting in its form the structure of a “Catch 22.” Circular reasoning is widely used by some characters to justify their actions and opinions. In simple terms circular reasoning is often described as “if A is true because B is true, B is true because A is true.”
Modern day sales executives and marketers are caught in their own “Catch 22.” A version of circular reasoning that says we need more marketing activity because we have more sales resources — we have more sales resources so we need more marketing.
Removed from the circle is the connection to real demand in the marketplace. It is a cycle that prevents both sides from seeing (or admitting) the reality of the situation, which is that we have built inefficiency and costs into the system.
In a period of soft demand, like now (and probably 2024) investments in scaling sales and marketing efforts have led to a Catch 22 for both groups.
How did we get here?
A number of factors have led to the place we now find ourselves in B2B. The constant drumming in the ear of CMO’s to “scale” has caused them to focus on reach, at the expense of performance.
It has resulted in years of investment in scalable martech tools that have left marketing with the ability to create and execute massive outreach campaigns, producing marginal results.
On the other side of the house, the output of those marketing efforts has to be sorted through like panning for gold. As a result, we have sales organizations that have added an enormous amount of headcount (SDR and BDR’s).
In some organizations, the reverse is true. Sales seeking growth have added low cost reps, and those reps need to be fed. As a result, marketing has scaled its efforts to give them something to chase.
Now for the impact of the Catch 22. Marketing isn’t interested in cleansing the “leads” it’s producing at the risk of not hitting goals. Sales is not interested in narrowing its ICP to true buyers because of the legacy thinking of “more is better.” A bigger, broader playing field is always better.
Except it’s not, and now is the time to reset how sales and marketing operate. For many, budgets have been reduced leaving managers to do more with less in 2024. This presents a great opportunity to fix issues which have been created by the need for “scale.”
Here are 7 areas to fix next year that will reduce your costs and improve your effectiveness. It will, however, it requires an honest conversation between sales and marketing.
The Fix
- The MarTech stack – it’s time to evaluate tools by what they produce (results), and not what they track. Also, question – do you really need the scale they provide? This is an opportunity for cost savings.
- Outreach frequency – take a hard look at the performance you are getting in your campaigns and programs. Ask yourself, are you spamming audiences? Be honest. “Always on” doesn’t mean you’re going to catch someone in a buying cycle, in fact, you may cause them to ignore your efforts entirely when they are looking. Here’s the opportunity to improve performance.
- Lead routing and results – this one may be difficult. Evaluate what was routed to sales this past year and examine the results. If you do this correctly, it should be painful. If your lead to conversation rate is below 20-30%, set that as the goal for 2024. This can reduce cost and improve performance.
- Evaluate headcount – if you do #3 correctly, it will reduce the number of MQL’s that reps need to follow up on. And that will lead to an honest look at the number of SDR/BDR needed. It may also reduce marketing headcount and marketing spend.
- Take the hard road – there are two paths to performance and in the past, sales and marketing have taken the path of least resistance – volume. The other path is conversion, which should be the focus for 2024. You can do more with less as long as you improve the quality of what is flowing through the pipeline.
- Refine your ICP – to improve pipeline conversion you need to increase the quality of your prospects. Go deeper into defining your target customer. Add categories that include; motivations, influence, and behaviors. This narrows your targets.
- Have the courage to scrutinize…everything – sales and marketing people, in general, are “glass half full” kind of people. But, having that point of view doesn’t mean the glass isn’t also half empty. Sometimes you have to change your point of view to get better. Now is one of those times.
There is a lot of junk in the system sitting in both sales and marketing platforms. The new year offers an opportunity to clean it up.
Finally, I’m writing this piece for the CMO’s and CRO’s who like the characters in Heller’s novel trapped in a never ending cycle of despair with no relief in sight.
The only way out is for sales and marketing to work together. Marketing can’t improve performance if sales is still requiring it to hit an arbitrary target that keeps BDR/SDR’s busy. Sales has to come to the realization that more isn’t necessarily better. Better is better, and that means become lean and effective.
According to Hubspot, 23% of reps made or exceeded their quota last year. With demand down this year in most sectors, count on that percentage being even lower this year. It’s time to take a realistic look at the actual number of sales reps needed based on performance, not models.
If you cut reps, you can increase the probability of the remaining team making quota. Less reps require less feeding, and as a result, you can reduce marketing activities and budgets, while increasing the quality of the outputs. Doing both, allows you to stop spinning in a circle.
Both groups must come to the realization that “A” is not true because of “B” and “B” is not true because “A.”
You don’t need more marketing, because you don’t need more sales reps. The ones you have aren’t making quota because there aren’t enough opportunities in the market, and you don’t need more marketing because there isn’t that much demand.
There I said it, now it’s out in the open. The circle can be broken.
