Why marketing should own revenue targets with Kyle Lacy, SVP of Marketing at Seismic
"I think that BDRs reporting into marketing unite the tip of the spear when it comes to go-to-market strategy. I think it unites messaging, positioning, the experience." -- Just one of Kyle Lacy's many ideas on how to align marketing and sales in a B2B tech organisation.
On this episode of the FINITE Podcast, Kyle Lacy, SVP Marketing at Seismic, discussed the importance of marketing and sales working together and why it’s key for marketing to own their revenue targets.
This episode covers:
- About Kyle and his role at Seismic
- His perspective on marketing and sales
- How should you measure leads and MQLs
- Should marketing own a section or the entire pipeline?
- Should BDRs live in marketing?
- Thoughts on the marketing development rep
- Should marketing teams get comps for creating pipelines or generating revenue?
- Is multi-touch attribution the solution to connect marketing to revenue?
- Why are sales leaders the first to get fired, and why is that marketing’s fault?
- Would Kyle consider the opportunity to run sales?
Listen to the full episode here:
And check out more of the FINITE B2B marketing podcast here!
Hello everyone and welcome back to the FINITE podcast where today we are talking with Kyle Lacy, who is SVP of marketing at Seismic, a sales enablement platform.
Kyle joined Seismic through an acquisition, having been CMO at Lessonly. Kyle has some great perspectives on sales and marketing alignment, marketing's ownership of revenue targets, how marketing and sales can work together to be focused on really the numbers that matter.
And that's what we're diving into today. I hope you enjoy this episode.
The FINITE community is kindly supported by The Marketing Practice, a global integrated B2B marketing agency that brings together all the skills you need to design and run account-based marketing, demand generation channel and customer marketing programs. Head to themarketingpractice.com to learn more.
Hi Kyle, welcome to the FINITE podcast.
Thanks for having me.
Looking forward to this conversation for a while. I saw that you're always thinking about this conversation, because it literally made it into your dreams, I saw from your post on LinkedIn.
Yeah. My wife was really confused that I was monitoring the two words that I think about quite a bit, which is marketing efficiencies in my sleep. And my five-year-old was not impressed with me at all.
That's hilarious. I love that. Well, we're going to be touching on something that I think throughout this conversation. Looking forward to talking as we always do. I'll let you start just by telling our listeners a little bit about yourself, your background and your current role.
About Kyle and his role at Seismic
So I'm currently SVP of marketing at Seismic. Seismic is a sales enablement platform. We do everything from content management through the sales cycle for reps to trading and coaching reps to hit and to succeed quota.
And then I spent a couple of years in venture capital outside in Boston and joined Lessonly for five-year. It'll be five years in February, and then we were bought by Seismic in August. And so, it's been quite the journey to experience an ExactTarget like world, a Salesforce like world. And then at Lessonly, who was 250 employees and in Seismic, who is now 1300.
Wow. Quite the journey. So two acquisitions you've been through.
Cool, and that's I think an interesting process in itself, maybe one for another. Another episode for another day. We're going to be talking first a little bit about the marketing team function that you oversee at a Seismic now.
So I oversee demand gen, corporate marketing, and thought leadership. So it's basically everything top of funnel and market leadership and how do we think about that at Seismic.
Cool, and how big is that marketing team overall at Seismic now?
That's a great question. As of this recording, I am two weeks into the role. So I'd say it's between 70 and 80 people and we've got offices in France, Germany, UK, Australia, and then San Diego and Boston.
Very cool. So we're talking about some interesting topics. I think you've got some pretty strong perspectives on marketing and sales working together and the focus on revenue and who owns what, in terms of targets, numbers and revenue numbers.
Maybe some of this is the nature of what you do at Seismic is in and around the marketing and sales world. Do you think before we dive into the conversation that it has been so submerged in that world and that coming together of marketing and sales kind of shaped your views or are these perspectives you've had since long before?
His perspective on marketing and sales
I learned the importance of alignment at ExactTarget, just seeing how leadership aligned appropriately across geos, across verticals. I don't think it's specifically sales and marketing. I just think it is communication, prioritisation, and alignment across any revenue.
And I've just experienced situations where marketers were put in marketing teams, were put on a back burner or a budget cut because they didn't own a revenue number. They didn't own a pipeline creation number. They were more focused on an influence metric or a brand metric.
I'm the first one to say: “ I'm a brand marketer first and revenue marketer second.” And I think anybody who knows me personally understands that, but in order to be a great brand marketer, you have to own a revenue.
And before we dive into that a bit more detail, is there a perfect sales and marketing structure? I mean you've obviously just talked about alignment and communication things being part of the culture organisation-wide.
Not just sales and marketing, which I think is a really valid way of looking at things, but is it all about communication and trust and ways of working? Are there other structures that you've seen? It sounds like you've had some good experience of seeing what's worked, but maybe some experience of seeing what hasn't worked as well.
I think you have to preface my answer by saying everyone's different. Every company is different. Your go-to- market model matters. Like, are you mainly channel? Are you sales-led, are you product-led?
I've always been in sales-led motions. So a lot of the work of setting priorities and revenue numbers are based on headcount capacity, and top of the funnel. Is your ability to create pipe or your ability to hire great account executives.
So in a perfect world, marketing owns as much top of the funnel as possible. At Lessonly, the marketing team was responsible for close to 70% of revenue creation. Now that's because we had outbound BDRs under marketing and they didn't live in sales.
Seismic is a little bit different because it's an enterprise sales motion. Lessonly was high velocity, more SMB, more mid-market. So again, it's very much dependent on the business model, but I think that sales and marketing leaders should be comped fairly similar.
I think that they should present together as much as possible, and the same goes to other revenue orgs. At Lessonly, our customer success team was quota bearing. Our services team was quota bearing. Our marketing team was quota bearing and our sales team was quota bearing.
So it was important that they were all aligned because that is how you grow a company. And the only way that you can prioritise and focus a team that's scaling right when you're hiring a hundred people a quarter. You've got to focus on one thing, and if you're focusing on revenue or pipeline creation, it's a little bit easier to prioritise. And that also has to do with selling into your install base. It's not just net new revenue.
Okay. And so for some of our listeners thinking: “Well, I'm currently measured on leads and MQLs. Do I just attach a typical average contract value or lead number to that?” And suddenly I've got revenue. What's the difference from your perspective?
How should you measure leads and MQLs
Again, based on your business model. Like Lessonly, if you need a high volume MQL number, because you're a high volume shop, you should focus on MQL to demo conversion rate, not volume of MQL.
It's absolutely crazy that we're still talking about getting as many MQLs as possible, where we have lead storing and all this other crap that you can use, right. MQL to demo conversion rate attach your finance teams should be thinking about this anyway, and then do direct source attribution, like who is first touch.
Lessonly sales cycles are arranged between 60 and 180 days, depending on the size. So you could pretty much associate direct and last touch attribution to something. In the enterprise sales motion like at Seismic, it's a little bit harder because there are so many people involved in a deal because they're just huge deals.
So I always look at direct source. I always look at first touch, and then you have attribution models that you can use, but your first step is MQL to demo conversion rate and then first touch attribution to a revenue number or a pipeline number.
And so by looking at the conversion rate of MQL to demo, that's your way of finding quality, right?
Yeah. And then, your alignment metric was sales is demo to opportunity created, right? That means marketing has great demo conversion, but sales is screwing up or vice versa. Marketing is sending a ton of volume in, and nothing's turning into an opportunity at forced alignment when you own those numbers together.
Nice. Makes sense. So I guess we talked about this before the recording, but your perspective was that at the moment, a lot of organisations marketing, we talk about marketing influenced pipeline, or only owning one section of pipeline. Your perspective is that marketing should be across everything basically.
Should marketing own a section or the entire pipeline?
Yeah. I mean, I'm all for attribution modeling. I think attribution modeling is important when it comes to budget and focus and prioritisation on spend. I do not agree that in an influence metrics should be used to validate marketing, which I think some marketers do. They're like: "Hey, we influenced this event that had 20 million pipes in the room." Great, perfect. That doesn't mean like, what is the step beyond that?
And so that's why I just don't like the influence number. It's just not something that appeals to me because did the event lead to a contract being signed the next day? Like you can have those conversations, but I think that if marketing is responsible for the creation of something, they should also be responsible for everything.
Honestly, if you're not influencing a hundred per cent of your revenue, you're not doing marketing correctly.
That's why the metric just seems weird to me because if it's not a hundred per cent every quarter, then what the hell are we even doing as a marketing team? And that also applies to customers because at a certain growth point, at a certain revenue point, your customer base is actually going to be the growth lever because you have multi skew, you have multi products. You bought companies or you built other products that you can resell.
In the SaaS world, that dollar retention is gold. If you spend some time searching on Google, about marketing, talking about net dollar retention, it's very, very, very, very, very low. Marketers don't talk about it very often, and it's unfortunate because we should be the ones talking about it. We should be the ones obsessed about the user experience, the customer experience. We should be the one pushing on the onboarding process, implementation and all that stuff.
Which is more common, I guess, in the more product-led growth environments. Web marketing is feeding into the product and product and marketing become more aligned.
That's why I love it. That's why I love product-led. As long as the understanding is you're eventually going to have to hire sales reps. I do not care what type of product you have. All great product-led companies eventually hire sales teams.
And what about in the more enterprise environment where it sounds like you've been in that environment before, but with being part of Seismic now. It sounds like that is a more enterprise journey. Do you think that is the same? Does it still apply even in a less product-led environment?
I'm sorry, what still applies?
In terms of the retention and that focus on the customer side of things. It's just as important as that on the enterprise side.
I mean, you look at Datadog. They are a great example. Great example product-led company, they're still growing. I think they're growing at like 70 per cent at 1.2 billion in ARR. That is crazy. And they have sales teams, marketing teams, and they're reselling it to the customer base. If your net dollar retention is under a hundred per cent, you're screwed. And a lot of marketers just don't think about it because they're so involved at the top of the funnel. If you hit 25, 30, 40, 50 million ARR and your net dollar retention is a hundred percent then you're not doing it right.
You mentioned a little bit about BDRs living in marketing and certain environments in which maybe that works better than others, but maybe you can talk a bit more about why you believe that's a good thing. And actually, I think you referenced previously being able to invest more in brand when that is the setup.
Should BDRs live in marketing?
So there's a couple of things. I think that BDRs reporting into marketing unite the tip of the spear when it comes to like go-to-market strategy. I think it unites messaging, positioning, and experience. Marketers are just way more involved in things like caring about what's happening in a cadence or a call or whatever that doesn't mean sales does it. It's just that a lot of sales leaders and reps are science oriented. That doesn't mean marketing is not. It just means that we just care more about the hand-holding.
The other thing is I think BDRs have more career opportunities on a marketing team, field marketing, product marketing, customer success, but it's very much dependent on whether your marketing and sales leaders are aligned. If I'm not constantly talking to the BDR team about meeting AEs, going to onboarding like all that stuff, then they get lost in the mix.
The third thing is it helps with efficiency modeling, and when the CRO and the CFO's focused on headcount capacity planning, it's easy to just hire more BDRs. But what about the efficiency? So I think marketing should own most of the creation of pipe and revenue, but again, it depends on your business model.
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We've talked a little bit on the podcast before about the MDR role and talking about the marketing development rep. Again, it kind of strays into that territory, I guess depends a little bit on whether the role is going out, hunting with things already processing more inbound leads, but is that a role you've come across?
Thoughts on the marketing development rep role
I've come across it. You would say our inbound reps were MDRs, but I think it just depends on. Like, we don't have MDRs at Seismic. We didn't have them at Lessonly. The outbound team lives in sales in Seismic, and because it makes sense with Seismic and how our go-to-market strategies are built.
I mean, MDR, BDR, whatever. You know, you got to work the leads that hit the website, you've got to do outbound prospecting. And I think that with full cycle AEs and some of this other stuff, I just think it's a really interesting time to try to figure out how to scale a sales team and a marketing team appropriately.
Yeah. I think a lot from what I've heard, a lot of the drivers behind the MDR role have been businesses working across a number of different industries with different pain points. And so where a BDR team may have been specifically trained on a particular industry or persona and their pain points, they really struggled when an inbound lead came in that wasn't the perfect fit. They would just kind of get stuck and not know where to go.
So the MDR role was kind of the solution to someone a bit more versatile and able to kind of take anything that came their way as a website lead or just general inbound lead.
Well, that's the importance. That's what Lessonly does. It's the importance of enablement, trading and coaching. It's like if you have a content repository and a learning environment that allows to do just in time training where a financial services lead comes inbound and the inbound rep just went through financial services enablement and forgot about like the pain of a use case or whatever personas in the funnel. They can quickly search and take a course or whatever, and then they can talk to this person.
But that being said, I think one thing that is an open conversation at Lessonly as well as Seismic is the more of the vertical approach. Like you need subject matter experts. And it's really, really hard to hire somebody that is either not been in SaaS or is right out of college and try to mold them into a subject matter expert for a specific industry.
It's doable but it’s a challenge.
You talked a bit about how these types of roles might be comped. And that's quite an interesting one and maybe sometimes controversial in terms of sales roles typically having a certain percentage of that performance pay or kind of different structures. Less common in marketing teams generally.
I've had conversations with people in the past that have different views on why that is our marketing. People just know that they have a different view of the world, or they're not incentivised as much by that commercial side, if you incentivise them with additional comped on performance.
So do you end up with a different type of person for the worse or for better. I was going to just get your perspective on whether you've seen that or whether you think that. I guess the question is, are there any downsides to go down that route later? Is there a risk of that you skew behaviors or end up with a marketing team that is kind of pulled in the wrong direction slightly?
Should marketing teams get comps for creating pipelines or generating revenue?
Yeah, I think it's a balance of how much of their comp, like if you're talking 10 to 15 per cent, 20 per cent, giving them an opportunity to own it as important and to get paid out above a certain number, if they over-perform, I've always seen it as an improvement.
I've never seen a neg, an adverse reaction to it because ultimately we work in companies, we work in high-growth software, we raise money. And the way that we live into our valuation is creating revenue. So if marketing is being comped off of something else, then I just don't understand. Like you either comps off pipeline creation because if you don't have pipeline, you don't have revenue, you don't have a company. I don't care how much money you raise.
So, you can comp them off for production. lt just keeps everybody focused. So I haven't seen an adverse effect to it.
And is it common? Like, I don't know whether you do this currently at Seismic or how the marketing team is, but I guess every company has different kind of bonus structures and approach things differently, but I don't think I've come across companies that are literally comping people based on a marketing team on pipeline or revenue.
So still working through the Seismic stuff since it's new for me, but for Lessonly we had a little bit different comp structures based off of the team. So our inbound team was comped direct source revenue from inbound. Then they had like a million dollar, a quarter number or whatever and they were comped off that number.
The brand teams, the field marketing teams, the videographer, they were comped off of our company number, quarterly number because they were more involved. The inbound team specifically inbound. So they're comped off of that. And that's how we structured it.
Now, some of our designers, they don't have as much of a bonus structure as like our head of demand gen. They have a little bit more skin in the game, but leadership team, marketing leadership team, was comped off of all revenue, which includes churn like total revenue for the quarter.
Yeah, it's interesting. I've come across it in places, but I haven't seen it happening kind of widespread, but definitely want to think a bit more about it. It would be great to touch a little bit more on the attribution side of things.
I know you referenced it in one of your previous answers, particularly in enterprise environments where I think a lot of our listeners are aware that buyer journey is a pretty lengthy and lots of people involved, and it's just hard to connect the dots when cookies get dropped or someone reads a blog posts that you might attribute to SEO or content nine months ago. And then actually fills out LinkedIn ads nine months later or something.
And I guess multi-touch attribution is kind of seen as the dream and the ultimate solution to connecting marketing to revenue. Is that a fair summary?
Is multi-touch attribution the solution to connect marketing to revenue?
Yeah. It's a fair summary. As long as you have service level agreements on the deals. Like at Lessonly we had a 90 day policy. Like if somebody came inbound and filled out a form and the opportunity was created after 90 days of that happening, it would go to the source that pulled them in after 90 days. But that's a very different model than a 12 month sales cycle. We were dealing with half of our revenue closed in quarter, so it was created and closed in quarters.
So it was much easier for us to do that. The multi-touch is the answer to that. As long as it's not being used to validate something. Revenue and pipeline validates, not whether or not an event led to 20 per cent of an opportunity. You're either going to grow or you're not. And you use a multi-touch attribution to spend appropriately not to validate.
Yeah. And is that where you're heading with Seismic or maybe it's already kind of in place at that level of attribution?
Yeah, I mean, there's always work to be done. I think from a spend efficiency, we need to dig deeper there. You know, outside of that's what in my opinion that's what multi-touch attribution is about. This budget and focus.
When we were prepping for this episode, you talked a little bit about sales leaders being the first ones out the door, when things don't go to plan and marketing leaders to be close behind. And I think you kind of put that down so a lot of the relationship between the two and a lot of the things we've been talking about. Maybe you can share your perspectives on that.
Why are sales leaders the first to get fired, and why is that marketing’s fault?
I think the conversation should be connected. You know, a lot of times I see people saying sales leaders are always, the people get fired first. Marketing is usually second, the 10 years of CROs, CMOs, SVPs and VPs within hydro software is very low. 12 to 16 months depending on who you're talking about. But if a sales leader is knocked off, it's also the marketer's fault if you're not aligned.
The sales leader, the marketing leader, the CS leader should be tied at the hip. And I just don't see that very often. And so when your sales leader is fired as a marketer, it's also your fault, especially if it's performance-based where they missed a revenue number. You kind of have some things that are out of your control, whether they're training and coaching reps appropriately for their quota and stuff like that.
But it's one team we're all in this together. It's not like, if the sales leader is fired, then you really, really need to look at how you as a marketing leader or how you as a marketing team could have helped in that process.
We see more regularly now the chief revenue officer role, particularly in more enterprise environments are more sales-led environments where as you described it, do you see that as being a part of the solution to that? Do you see sales and marketing sitting under a revenue leader?
Yeah. I mean it doesn't happen very often, but I always think marketing should run sales. But it's usually the other way, if you're talking to them, they're usually like: "Oh, the sales leader can do this and they'll be able to handle marketing.” And I don't understand that at all. It just doesn't make any sense but I'm a little biased.
But there's so much opportunity to create unforgettable experiences in a sales cycle. If a marketing team is highly involved or marketing leaders running it, that's usually not the case, but I just don't know why the CRO is always somebody with a sales background just doesn't make any sense to me.
I think I've met one CRO that's come from a CMO role, previous VP marketing role, previous editor.
They're very few.
Maybe we need to find some more and try and get them on the podcast. If you know any.
It's probably because marketing doesn't want to run sales. I'm not sure that I would take it honestly as a marketer, but I believe fundamentally that it could be better.
Why do you think you wouldn't take it?
Would Kyle consider the opportunity to run sales?
I think it's just a personal thing for me. That's not fair. I wouldn't say I wouldn't take it. I have to have some irrationality in my days because irrationality breeds creativity and that's the chaos is what makes it fun for me.
I just don't see that very often on the sales side. And that's not a bad thing. It's just that it's way more scientific and marketing tends to be a little bit more creative. But I think that growth marketers have the scientific background and the analytical expertise to be able to do something like that.
The other thing is, I think it's harder for AEs for sales teams to follow a marketer than vice versa. For some reason, I don't know why maybe marketing is just more empathetic, but I think that in order for you to be a true sales leader, you have to have done the role to be in the role.
Like if I were to become a CRO, I would hire the best VP of sales I could possibly find to help with that, but I can talk about this topic all day long, but I just think that it takes a special person to be able to do both.
Yeah. That makes sense. Cool. I'm gonna add that to my list. After this is to find a couple of CRO with a pure marketing background and see if we can get them on.
I could probably find you A few.
Okay. Well, let us know afterwards. That would be good. We're pretty much at time. I know you're a busy man and on a busy day. So we're going to wrap up, I'm going to say thank you for your time and for sharing everything. I think a lot of food for thought for people, definitely myself, lots of things to reflect on. Thank you for coming on and sharing everything so openly.
It was my pleasure. Thank you for having me.
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