Mike McKinnon
August 19, 2022

Marketing Ops — What B2B CMOs Need to Know

Guest: Mike McKinnon - VP of Global Revenue Operations, LogRhythm

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We have lofty expectations for our MarTech stacks. They’re meant to automate marketing processes to clear the way for more big thinking. To keep a clean and accurate tracker of every customer and prospect in the system. To prove to the org that marketing is contributing to growth.  

But this isn’t always the reality, and B2B businesses often find themselves with too much tech, not enough staff, and dirty data that focuses on the wrong metrics. Avoid these woes by listening to this episode with Mike McKinnon, VP of Global Revenue Operations at LogRhythm and author of The Marketing Operations Handbook (which you should get your hands on ASAP). 

This conversation comes from a CMO Huddles Bonus Huddle (re: a private Q&A), and answers all your questions about budgeting for MarTech, the intersection of Marketing Ops and Rev Ops, proving marketing’s value, and more.   

It just skims the surface of what top B2B CMOs of today are solving together at CMO Huddles… To learn more about our guest pass program, visit https://cmohuddles.com/guest-pass    

What You’ll Learn in This Episode 

  • How to budget for MarTech 
  • The role of RevOps in marketing operations 
  • How to prove marketing’s value 

Resources Mentioned 

Time-Stamped Highlights 

  • [2:26] From English BA to MarTech pioneer: Meet Mike 
  • [4:23] Rules of thumb: Budgeting for MarTech 
  • [8:25] The staff to technology ratio  
  • [11:20] MarTech tools that reduce staff 
  • [13:12] Why do so many marketers complain about Salesforce?  
  • [15:50] Maslow’s hierarchy of tech needs 
  • [17:53] How to keep your marketing data clean 
  • [20:05] The role of RevOps   
  • [21:38] Who should RevOps report to?  
  • [25:54] Aligning Marketing and Sales via RevOps 
  • [29:55] Marketing attribution vs. contribution  
  • [37:30] How to achieve business interlock? 
  • [39:28] Proving marketing’s value  
  • [40:53] How long does it take to get from Stage 0 to Fully-Fledged Forecasting? 
  • [41:59] Audience questions 
  • [46:14] How often to audit your tech stack  

Quotes  

“Tech does more than just generate names. It supports an entire organization.” —Mike McKinnon @LogRhythm Click To Tweet “There’s a Maslow’s hierarchy of tech needs that marketing needs to go through as you grow.” —Mike McKinnon @LogRhythm Click To Tweet “By the very fact that the CMO has to prove their worth, they become the cleanest source of data.” —Mike McKinnon @LogRhythm Click To Tweet “The CMO has to have a lot of trust in whoever's running RevOps because they're essentially handing over control of their MarTech stack to someone that doesn't report to them.” —Mike McKinnon @LogRhythm Click To Tweet

Renegade Marketers Unite, Episode 306 on YouTube 

Full Transcript: Drew Neisser in conversation with Mike McKinnon

Drew Neisser: Hey, it’s Drew. I’m guessing that as a podcast listener, you will also enjoy audiobooks. Well in that case, did you know that the audio version of Renegade Marketing 12 Steps to Building Unbeatable B2B Brands, was recently ranked the number one New B2B audiobook by book authority. It’s kind of cool, right? You can find Renegade Marketing on Audible or your favorite audio book platform. Now speaking of podcast before we get into today’s show, I want to do a shout out to the podcast professionals at share your genius. We started working with him about four months ago to make this show even better, and had been blown away by both their strategic and executional prowess. They’ve helped us improve the show in big and little ways. So much so that our monthly downloads have doubled. That’s right, they’ve doubled. If you’re thinking about starting a podcast or wanting to turbocharge your current show, be sure to talk to Rachel Downey at share your genius.com and tell her drew sent you. Okay, let’s get on with today’s episode. Hello, Renegade. Marketers Welcome to Renegade Marketers Unite the top rated podcast for B2B CMOs and other marketing-obsessed individuals.

All right folks, you’re about to listen to a bonus huddle, a specially curated huddle that we run once a month with experts sharing their insights into the topics that are most important to our huddlers, those are the folks from CMO Huddles. The expert at this particular huddle was Mike McKinnon, the VP of Global RevOps at LogRhythm, and we had a fantastic discussion on marketing ops best practices, how to get the most out of your MarTech, and more. It was a terrific conversation. Let’s dive in!

Narrator: Welcome to Renegade Marketers Unite, possibly the best weekly podcast for CMOs and everyone else looking for innovative ways to transform their brand, drive demand and just plain cut through. Proving that B2B does not mean boring to business. Here’s your host and Chief Marketing Renegade Drew Neisser.

Drew Neisser: Welcome, everyone to a very special bonus huddle. Our guest is Mike McKinnon, Vice President of Worldwide Revenue Operations at LogRhythm a network security firm Mike is a MarTech Pioneer becoming one of Marketo’s initial customers back in the early 2000s. And has since tackled just about every marketing ops and revenue ops challenge. So for those of you in the audience, if you have a marketing ops or revenue off challenge, please put them in chat. Mike literally wrote the book marketing operations, a handbook, which I actually read over the weekend, which came out in 2021. That doesn’t mean it’s out of date. There’s some great strategy thinking and formulas there. Hello, Mike. Welcome, 

Mike McKinnon: Drew, it’s nice to be here. Thanks for having me.

Drew Neisser: It’s really great. It’s funny, you and I had the prep call. But now that I feel like I’ve read the book, I feel like really in your head, which is a little scary. In our prep call. You mentioned you’re an English major in college. And I’m just curious, how do you end up becoming a MarTech Pioneer being an English major? 

Mike McKinnon: Yeah, it’s certainly a funny journey. I think I fell prey to the basic euphemism of High School, right? Your favorite subject is from your favorite teacher. So in high school, my favorite teacher was my English teacher. So that became my favorite subject. And then I didn’t know what I wanted to do when I went to college, I was too young. So I said, I’m going to be an English major, because I love English. Because that was my favorite teacher in high school. Looking back probably should have been an engineer, I always was into computers. You know, I always was reading that kind of stuff. And then my first job was in tech support. So right away into some kind of technical job. So that’s kind of my role and operations.

Drew Neisser: Amazing. Well, I think, by the way, I think English majors amazing. Because if you can write, you can think and I would imagine that there any number of folks that you work with that aren’t really good writers, which means it’s harder for them to explain what it is that articulate the challenge. So anyway, I think it’s a fundamental skill to have. Anyway, we’ve got a sophisticated audience here of B2B CMOs and let’s start with some big picture items just like budgeting for MarTech. I saw some numbers in your book, but let’s talk about sort of rules of thumb as you start looking at marketing budgets. What percentage do you see or range for MarTech? 

Mike McKinnon: Yeah, usually it’s on two axes I look at it in my book. It’s usually on a range of how large you are as a company. And those bands are pretty, they’re pretty broad. You know, you have your less than 100 million to 500 billion, then you have a billion plus and then within those, you could be low or high fund. Your funding is based upon a percent of your—usually I see as a percent of your bookings, annual bookings or annual revenue. And so typically for highly funded and I’ve had the luck or unfortunate luck of being at a company that went from high to low in my five year since. So as a mid level company, we were getting around 10% of the annual revenue of the company. And now we’re getting 5 for marketing 6, and it’s cat and that’s really or the ownership, it’s really a product of how the ownership wants to account marketing, how they want to fund and how much they want to grow.

Drew Neisser: So when you say 5-10%, you’re talking 10% is the total marketing budget of revenue.

Mike McKinnon: So what you do is use easy numbers if you book—if your annual revenue ARR, or however you want to measure it, or your bookings for that year is $100. And you set your marketing budget at 10%, their budget is $10.

Drew Neisser: And then what is the MarTech spend of that $10,

Mike McKinnon: That can vary, that’s usually in the 20-30% range, typically, what you’ll do is you’ll break that budget into program dollars, which are what you actually spend to generate demand. And then some other people call it the “fixed cost dollars” or the “infrastructure dollars”, that’s your headcount, that’s your tech spend, that split is usually 50/50 60/40, where you have 50%, or 40%, tied up in your structural costs, and 50-60%, going in all your demand gen costs where you’re actually spending money to get a return on names.

Drew Neisser: So if we take—we have the $10, we started with, we’re taking 5, and we’re gonna put that into programs. And then the other 5 is to fund staff and technology

Mike McKinnon: Correct. And of that technology—of that 5, there’s probably 30% of that is tech. So you’re looking at $2-$3 of that 5, depending on how big your tech stack is, and how large your company is, right? So if you’re a nascent company, it could be a very small amount, because you don’t have a lot of tech, as you get big Avaya that was almost half of it. We spent a lot of money on tech.

Drew Neisser: I mean, one of the things I write about in my book is that when I see that number, get over 15% and gets into 20% or 25%. I wonder if that’s not people or working media or anything that’s driving revenue, it’s just technology. Do you have a sense where you can be overspending and you got some nice, bright, shiny tech, but where’s the marketing dollars?

Mike McKinnon: Yeah, there’s definitely a balance. And you can fall into the tech game where you’re constantly buying tech. And I think you need to be aware of what’s your ROI target? Who’s setting that target for you, right? Where does that land and how you calculate that? Do they want to include the MarTech stack in that calculation, but then you could argue, “Well, not all of that is demand gen MarTech stack, some of that is core.” So it really depends what your target is for the company and how you want to parse that tech stack out and whether you want to calculate the ROI on it as part of your overall bookings, or ROI differently. And I get into that you can look at each piece of tech and say, “This tech is for this, am I getting the ROI in isolation?” And that’s a much better way to to look at tech that way. Because tech, as we know, does more than just generate names, it supports an entire organization.

Drew Neisser: And we’re gonna get to that I’m working my way from very broad. And so we’re gonna say we’re fighting to get 10% of revenue for a budget, that’s part one. And then we’re fighting to spend of that 10%, maybe 30%, max 35% on technology. Okay, one of the things that we’ve seen a lot of is that folks get a new technology and they underestimate the amount of staff that they need to get the ROI that you just mentioned in a huddle the other day, someone was talking about 6sense, great product, everybody’s excited about it, but they realize they actually needed 3 staffers and they had originally thought they’d only need one. How do you approach the staffing to technology ratio?

Mike McKinnon: That’s a tough one, you can get that wrong pretty quick, you can get that wrong at Avaya and a couple of staffing, namely BlueKai, which is a DMP, which takes quite a bit of staffing, also very expensive tool. I think it also depends on where you are and what you’re trying to get. If you look at your core tools like Marketo, your automation tools that every marketing group has, and you have to look at that usage. And say what am I using that tool for? Well, at a very nascent company, they might be using it for email, some website updates and foreign films, that takes one person, maybe two depending on the volume of campaigns. At LogRhythm, we use it for that plus we use it to drive a lot of business processes, a lot of tech is integrated into it. So our staffing for Marketo has to increase because the complexity of the tool has increased. So I think you have to look at it that way. So I think it’s better to hire light. Even though they hired one they didn’t make the wrong decision. They made the right decision and then immediately pivoted and hired more. Over hiring is worse than under hiring. You need to learn the tech, then assess the staffing. So I think it’s okay to hire more. You just got to allocate budget or have a little bit of knowledge that that might have

Drew Neisser: I got to push back on that a little bit because every time you get a new technology, you’re saying, “We’re gonna get an ROI based on a certain amount of cost of staff and a cost of technology.” And in order to deliver that, if you need three times the staff to deliver what you expected, you didn’t price that correctly, right? And so your ROI model is going to be way off, it feels like the industry—and this isn’t you—but the industry needs to be better at saying, “Hey, for this scenario—and we’ve sold into this scenario—you’re really going to need 2 people, 1.5, something so that you don’t have these surprises.” Am I wrong? 

Mike McKinnon: No, yeah, you’re not wrong. The subtle point there is, you wouldn’t hire more staff unless you’re using the tool and more complex, more ways that gained value, right? So as the tool has grown in value, you are hiring more staff. So your ROI calculation should stay relatively the same if not increase, and so you’re moving from an email tool, then you hire another staff member. But now you have that Marketo is integrated into Salesforce, and you can now calculate opportunity value and trace opportunities to the the funnel so that you’re getting more value. And then you add the staff member, right? So as you grow the tool you hire.

Drew Neisser: Got it. I misinterpreted that to be you know what HubSpot, you started out and use it as website, then you add the CRM, and then you add the intended, and then you add marketing automation. And next thing, you know, you need a lot of people to do it. Okay. All right. Got it. Are there any of these technologies that actually have ended up reducing the need for staff in your experience?

Mike McKinnon: Yeah, there are, and you have to be able to find them. And typically, they’re not technologies that demand gen people will buy. They’re not your predictive analytics like 6sense. It’s not your DMPS, it’s not—those take staffing, it’s not Marketo. The things that reduce staffing are the things that I usually purchase to help operationally support the CMO. Lead routing tools, no demand gen person’s going to ask for lead routing tool, but that reduces a whole staff member. And it reduces ticketing into the iOS team that has to update lead routing rules in Salesforce. So we have an overlay very cheap tech at routes leads for us. And that reduces that headcount and reduces burden on another department. So there are several tools that do that. But typically, they’re not the tools that the CMO wants. The big grand tools that drive demand. 

Drew Neisser: And I love that example though lead routing tool—it’s come up in a huddle. And it makes sense. And frankly, if you do it right, you probably get that lead to the right person at the right time. So it’s better for demand gen. Anyway, do you have another example?

Mike McKinnon: The lead writer is a great example. And another example is data pen tools. You have tools that demand tools specifically, that can do a lot of data manipulation that typically have to pull out in spreadsheets and redo or you have to open a ticket with IT or IS. Whoever owns Salesforce and get that done. So that saves a ton of time moving that bulk data around. 

Drew Neisser: You’re getting a lot of thumbs up on the data appending. Several fans of lead—and it’s like a geek fest when you mentioned technology to the CMOs and they go, “Oh, yeah, we’re doing it. It’s exciting!” And so finding ones that actually reduce staff makes sense, because there’s always another one to buy. We’re gonna get to the questions about RevOps versus Marketing Ops, but we got to talk about Salesforce, I know you were one of the first 100 customers in Salesforce, which would have been really exciting back then. But I hear so many complaints about Salesforce versus praise. And I just I want to get what’s going on? Why is this such a problem?

Mike McKinnon: Salesforce is funny. So I was one of their 100 customer, we actually dumped them, we were on the phone support all the time, we moved to sugar, which is the open source CRM, and then we move back to Salesforce a year later. And I think what happened—I mean, there’s a lot of reasons to dislike Salesforce, I’ll choose the reason why I struggle with a little bit is because of their architecture of their objects. And that’s not how you sell leads, contact objects, account objects, opportunity objects, they’re all segregated. They’re all objects that have to have cross reporting. The reporting is a little bit clumsy because of that. And the structure of how a lead becomes a contact it inhibits clean data, inhibits a lot of stuff, the flow of data. And so what happened was, I think it Salesforce became the dominant tool. And now most databases have that structure. I set up a database for my wife several years ago, and I think it was an easy one, you can get online fresh something. And it was the lead contact account structure. And I was like, “Oh my god, this is exactly like Salesforce, no one’s come up with another data structure.” So that mean, that’s why I disliked it.

Drew Neisser: Right. And so is this in a world where it’s not about a lead, it’s about opportunities and you know, you’ve got 20 or 30 people that may weigh in decision. Is that part of this conversation? 

Mike McKinnon: It is and that’s where it falls short in Salesforce because Salesforce is not account focused. It’s people focused. And it’s trying to get you to move leads to contacts and it says, “Hey, if you move it from a lead to a contact, it has become a customer.” That’s not true. It’s trying to bind you in as architecture. You know, 15 years ago, it was same architecture that we bought them in 2001. So you do have other databases popping up. I think HubSpot claims to be accountant focused. I think there’s a couple of other ones that claim to be CRMs that claim to be account focused, they still have to have people on them. It’d be nice if you just had accounts and people underneath those accounts, a set of leads, maybe that’s what they do. I haven’t quite looked at them. But the problems trying to be solved, I just think Salesforce is so vague. And it’s such a sticky, sticky software.

Drew Neisser: Years ago, I actually did a piece of software for an aircraft carrier and learned that it takes it five miles to stop and in order to turn around. That’s what Salesforce feels like. Yeah, it’s an aircraft carrier trying to turn around. Okay, so there are 1000s and 1000s—I think you mentioned 8000 in your book, I think latest it’s 10,000 technologies marketers could deploy. And it’s easy to get excited about it. I see in the chat stream, there are a lot of you know, “I’m using this and it’s cool.” How do you sort through them and decide what’s must have versus nice to have?

Mike McKinnon: There’s kind of a Maslow’s hierarchy of tech needs, I think that you need to go through as marketing as you grow. And of course, it starts with the CRM marketing usually doesn’t own that. So usually have that already. And that’s usually owned by another group. And then you have the marketing automation tool that lands on top of that, from there, you you can grow out from there, depending on your needs. If you get a twig Marketo, Marketo can satisfy a lot of those needs. And that’s what’s happening. So you’re getting to see—you start to get to the decision of so once you have that marketing automation tool, data becomes an issue and routing becomes an issue, right? So now and then attribution and contribution start to where you have to start proving the value. So those things, in order to prove value, you have to have good data, and you have to get the leads to the right people on time. And then you have to have something to measure that value. So those become the next core ones and Marketo could handle all of that for you with their in home tools. Or you go outside to say, “You know, I want best in class across any vendor,” or “I want best in class within one vendor,” that used to be true for IT, it’s getting to become more true for marketing as it grows. Marketo has a lot of tools that could fill those gaps, you might not like them, but they have. Salesforce is buying it up. Pardot and trying to add those tools. So if you’d want the Salesforce stack, right? They’re not all great. So I think you got your core marketing automation, and then you have your lead routing your data and your attribution contribution. And then you can start going off into like predictive analytics. And I want to do Account Based Marketing, but you need that core stuff first, because that’s what processes your demand gen engine, and you need your demand gen engine healthy before you start dumping anything into it. And those are the core tools for that.

Drew Neisser: My first thing that I’m thinking about is all of this and dirty data. Can we just talk about data as the problem, it’s garbage in, garbage out? And what do you do to try to keep your data pristine.

Mike McKinnon: So I’ll say something I think everyone on this call like is don’t let salespeople enter anyone into the database. So typically, in all the companies have gone to the marketing database is crystal clean compared to the rest of the company’s database, which is sales, guys putting adding accounts, adding contacts, adding leads, not knowing what they’re doing, converting stuff. The larger the Salesforce, the larger that pool of data and dirtiness becomes, but with a, you know, the marketing, the CMO is so focused on I need to be able to get ROI, I need to be able to look at my different channels, understand which ones are working and which ones not, I can’t have just data entering the system willy nilly. So one of the first things that CMO will do is say, “Okay, we need to put guardrails around all this data, because I need to understand ROI.” So by that very fact of the CMO having to prove their worth, they become the cleanest source of data, the CRO doesn’t have that, the CSO, the Chief Sales officers, they have to hit their number, they don’t hit their number they get fired. And that’s that. They don’t have to continually run reports on my sales guys ROI, my sales guys activity, they just look at pipe and bookings most of the time and look at that stuff, right, and aggregate. Where the CMO is looking at these small channels and activities trying to tweaker his or her engine to get there you just can’t do that without dirty data. Back to the original question is, it has to be a company initiative. Because every company I’ve been at marketing has their pool of data that we can track and then there’s this large pool of channel partner data sales enter data customer success manager enter data is typically not as structured but that takes the entire company to wrangle that in. And so it becomes an entire company initiative that has to be driven by most likely IT or IS or someone in my group, someone with me. But even that I’d have to, I’d have to work with IT because it impacts so much data.

Drew Neisser: This is a perfect segue into the RevOps and your role is evolved from MarTech to leading RevOps? And isn’t RevOps by design sort of a single source of truth? Isn’t that part of having a clean data strategy?

Mike McKinnon: Yeah, so my group would lead that strategy. But it would take a data counsil of deciding because you have, in a larger company, you’ll have a customer success group, which is in the support group, which could be 3000-4000 people all in an upsell and have their own database. So what you’ll need to do is you need to one decide on which counts are the customer accounts that takes a group effort, which accounts need to be merged into those. So you have to do a lot of cleanup that will take a large group to look at that data. So that’s what you need emphasis. Yep, my group will do it all my group will weed that strategy, my group will project management, but we’ll need input from all of those people that hold that data, that know that data, once you get to that and you clean it up. And then what you have to do, essentially, is lock it down. And then someone in my group or a group like mine converts all the opportunities, only accounts that can be made or through ticketing, because if you do the cleanup, right, what you’ll then do is create account shells built on hierarchy with DUNS numbers, so people know divisions and everything’s it’s all built in. If there isn’t an account in there, then they can open a ticket, you can look make sure it really isn’t in there, and then add it in the right spot. Let the rep know that we did that at Avaya, it takes a lot of people but it keeps your data clean and structured and reporting across sources uncontested. 

Drew Neisser: So who does your RevOps report to? 

Mike McKinnon: I report to the CFO, and you’ll see it across the board, the rub off dungeon is relatively new in the last five or six years, you start seeing it. And I think the last report I saw by serious decisions that had who would reports to it was almost 70%, the CRO and in some cases, the CRO was the boss of both the chief sales and the chief marketer. In some cases, the CRO was just like in our company, they just run sales, and we have a CMO that was 70%. The other remaining 20% was CMO. And then the final 10% was CFO and that was growing. Because the one reason is Rev offs reports on both marketing and sales. And if they’re in one or the other, they immediately become biased perception. CFO is typically an accompany that’s a source of all the numbers, all the financial numbers, all the real numbers, and it’s unbiased. And so we moved into the CMO, the CFO, after a year being under the CMO, we were unique into their structures.

Drew Neisser: Is there any argument the CMOs listening want to know for RevOps? Is there an argument to be made that it should report to marketing?

Cindy Zhou: So I’m happy to share some context since Mike was in my team up until a few months ago.

Drew Neisser: Let me ask you. So it’s Cindy Zhou from LogRhythm, the CMO. Cindy, you had it? And then you gave it up? Talk about it.

Cindy Zhou: Yeah, and there’s some specific reasons for that. So the difference is I had a Sales Ops background. So I ran Sales Ops at a former company. And so when I was joining LogRhythm, Mike was already at the company, he was doing a great job with marketing ops, we were looking at from a reporting metrics perspective, there were a lot more synergies together and putting it together into RevOps team. And so it was in RevOps, we had some changes on the finance team side. And Mike actually expanded his responsibility from doing core RevOps and taking on some of the finance functions. And then just about I guess, Mike, was it like late November last year, we moved you over to CFO because we were helping out, he was helping out with a lot of the finance stuff.

Drew Neisser: Thank you, Cindy. I know that, you know, in a number of organizations of the CMOs in CMO Huddles, many of them have either a RevOps or an equivalent group that is responsible for sort of the the truth of the data, but they often have a data person on their marketing team, or they have a marketing person within the data group as a dotted line, you know, if you don’t know marketing this data, just is data, and you may not know what the story the data is telling if you don’t have marketing experience. So can you talk about—assuming there’s a RevOps team and all the data is going through the RevOps and it is reporting to the CFO by someone like yourself, how does the marketing person make—the head of marketing, make sure they’re getting the data that they need? And it’s thought through from a marketing perspective?

Mike McKinnon: Yeah, so that’s a good point. So within the RevOps group, we have marketing specialists and sales ops specialists. In the RevOps group we have—you can break it up into really two groups with subgroups. The first group is analytics and automation. And under that group you have people in the automation group that understand all the integration and all the tech and how its integrated. If it breaks they fix it. And they track back with how it broke, they do that. And then in that group also, we have all the analytics. And that’s what you’re referring to in the analytics group, we have people that do only marketing analytics and understand those analytics back to back front to forward. And then we have people that do only sales analytics that understand all of those. And then because they’re RevOps we have a ticketing system, and they cross they do cross train, and they do understand low end tickets, so all of them can pick up tickets. And that’s the great thing about having RevOps is because you really have to understand both. So yes, they specialize. And if I lose my marketing person, I work with the CMO to hire another marketing person that understands marketing tech, and they’re part of that, right? And if I lose my Sales Ops person, I’ll work with the salesperson, the sales leaders to hire that specific sales ops goal. They’re all called revenue operations and analytics, but they do have specialties within that group.

Drew Neisser: I’m with you on all of this. There was a question early on, is there any economies of bringing the sales ops and marketing up, you’ve talked about how they can sort of sub in for themselves, but are there any economies of sales of having sales ops and marketing ops together?

Mike McKinnon: There is a ton. The first one I just mentioned was they can cross train tickets. So both these groups are doing the same thing for marketing and for sales. They’re both structured correctly, they both have ticketing systems, because they’re both in taking tickets from their their customers, marketing and sales, they both manage a tech and all that tech is also integrated into Salesforce, they’re both worried about clean data, the larger you get, I’ve run into companies where marketing has a data cleaning system and sales has paying for a data cleaning system. Marketing is paying for zoom info to get contacts and sales is paying for LinkedIn to get contacts, putting these two together, stops all of them, it’s all done. So not only do you get that, then you can also get that cross training happening to where you can—the amount of tickets that your team can now process has increased—it hasn’t doubled, but it’s probably 50% increase, because now they can cross train and pick up these low level tickets that are really easy, and it helps them with their careers.

Drew Neisser: That makes a lot of sense. So there’s economies of scale from a software standpoint, there’s economies of scale, from a people standpoint. That—it must make it a little more challenging from whose budget does this go into? How much is the marketing budget? And how much is the sales budget? Just how does that work?

Mike McKinnon: Yeah, so it really depends on where you are. So we’re owned by a Thoma Bravo. And they have very strict rules about percent of budget for each department. We need to play our CFO helps us move money around on the back, right? So while I do report to Barry, the part that services Cindy, rolls up to Cindy to keep those budget numbers correct. So there are things you can do in the back end, if someone is a stickler about budget numbers. At a company that doesn’t mind and they understand, “Oh, yeah, I know you’re over, because you have this group. And normally that group is not in your group.” And they can understand that, Thoma Bravo is not into nuances. They just need to see the percent within the range. And so we make sure they see that when we deliver the deck by just moving more hair out.

Drew Neisser: Right. And this is just all that—in that case, it’s I think it’s a PE firm, it’s all about their standard curve, their benchmarks that they impose on their companies. Interesting. Okay, we’re going back to rag on Salesforce for a moment. Because one CMO said, “How long should it take to upgrade to Salesforce Lightning? Ours is taking forever.”

Mike McKinnon: Oh god. Yes. Who asked that? Because Cindy lived through that too at our company. It took forever, and we hired a firm that’s supposed to be good at it. It still took, God forever. And I we were told it took forever for us because our Salesforce instance is so bad. And it was, but it’s nice to hear that someone else is saying it took forever as well. I think it took a year or more.

Cindy Zhou: About 8 months. A little bit more planning.

Drew Neisser: Okay, so there’s there’s the answer 8 months, but could have been longer. I’m imagining because you were in MarTech and now you’re in RevOps, you still play a primary role in the selection of the technology that is added?

Mike McKinnon: Yeah. So I buy all the technology for the channel team, for the sales team, and for the marketing team. And so if they need any tech, what they can do is I can come to me and say, “Hey, this is the tech I’m looking at.” If it’s a point technology, and they have budget for it, yeah, go ahead, go buy it. If it’s something that needs to be integrated, supported by now IT, we’ll have to open it up to kind of an assessment, just like IT now, right? So, you know, gone back when I first started the person around marketing, they were so happy because you didn’t have to let IT know that you were buying stuff because you could just log into a website and get your tech. And now they have a RevOps group or the marketing ops group that functions kind of like IT for marketing and says, “Okay, if you’re gonna buy this tech, we know who’s supporting it? Where does it go? Who’s running it? What’s it supposed to do? And how much does it cost?” And I’ll do that for all three of those groups.

Drew Neisser: We started to talk—well, you mentioned attribution, as you know, after you’ve got your sort of stack built, you start to look at that, and how important it is to marketers. First, let’s just talk about the notion of attribution and how you look at it right now. And we can look at sourcing your contribution. But you know, the goal here is for the CMO to be able to stand up in front of the board and say, “Marketing is making a difference.” And so we’ll talk a little bit about your framework for thinking about attribution.

Mike McKinnon: There’s two words that are often conflated. So we want to get those correct before we start. First one is attribution and contribution, and people will use those interchangeably. And they should, I’m going to give you the standard definitions, but there are two different things you need to make sure you’re referring. The first one attribution I typically refer to when I want to know how much revenue is attributed to my campaigns, or my activities, or the channels or the things I’m doing to pay for demand. So if I did a social media campaign, PPC, and I want to know how much revenue is attribute and how much revenue that campaign is responsible for, that’s attribution. I can run different campaign attribution models, I can say any campaign that touched this $100 Op give an even amount to each one of those I could say the campaign that touched the last give that so those are different attribution models. Contribution. 

Drew Neisser: Okay, wait, you’re absolutely right. And I’m sorry for conflating those two. But while we’re talking about attribution, and that is part of it, because you want to be able to know what’s working and what isn’t what’s real? And it’s really hard, because it’s a combination of things. And what I mean, what do we mean by what’s working, right? Is it leads into the pipeline? Or is it closing deals? You know, when we think about tools for this process, are there some tools that you’re using, first of all, on the front end of just helping figure out what is. And it’s what’s working to do what. Let’s just say, filling the pipeline.

Mike McKinnon: There are tools I can do that within one of them is full circle, lean data does that, Bizible does that. And so what you’re looking at is flexible attribution models. And if I want to know which campaigns are filling my pipeline, I would look at a first touch model. And I would say, “Show me all the campaigns that have the most first touches or initial touches or net new touches,” whatever you want to define that right, how many campaigns are driving net new, and that could be a model I could use, right? So there’s different models to get those different answers. 

Drew Neisser: But we also know that’s problematic, because what we really care about at the end of the day is revenue. Now we can move on and talking about contribution. So let’s just talk about contribution. And how you think about that. 

Mike McKinnon: Contribution is the backbone of attribution. Contribution is essentially how much money is marketing marketing, not a campaign or an activity, marketing itself responsible for driving? And you have to have some kind of sourcing model for that. Now, all sourcing models have problems. But if you’re going to say this campaign touched this much money, you have to have a way to measure what is that touch? How am I going to prove to people that this campaign did indeed touch that person and that dollar value. That’s how you have to have opportunities contributed back to marketing. Those are—they’re also attribute it back to campaigns, but the contribution marketing contribution is broken up into sourcing what I actually source and that’s typically if the marketing group has an SDR group, the SDR qualified that lead and literally handed it to an RSM or a sales rep in the field. And they close it. That is typically a sourced marketing opportunity. If a campaign is on an opportunity that closes and there’s no SDR qualification, typically, that’s called an influenced, those are broad definitions. The most important thing is you meet with sales, and you talk about this definition, and you come to an agreement on it. Because you need to have some kind of contribution model or you can’t say my PPC campaign touched $100. And when you do say my PPC campaign touched $100, the sales guy next to you can’t laugh. That’s the important thing, right? So they need to know. Yeah, I saw that model. I know why they’re saying this PPC campaign touch that up, because I was shown how it was connected via the tech. Yeah, I might not get it. But I was walked through it. And it makes sense, right? So I’m not going to poopoo it when I’m in another room with all my sales guys, right? And that’s really important for marketing and sales alignment. It doesn’t matter what your contribution architecture is, it matters that everyone agrees that that’s the best you can get. And there are always going to be holes in it always because it’s a system doing a contribution and systems are binary and they don’t know nuance, as long as people know directionally it’s correct and they agree you’re okay,

Drew Neisser: Where this goes is we need a certain number—this you know, a classic funnel, we need a certain and you explain that in the book, right? As if it’s linear, but that you know, we need a certain number of leads and ultimately we get to 5x coverage. It feels like though if there’s a lot of time spent if this is a big part of the CMOs conversation with the board, with the CEO, with the CFO, it’s sort of like, “Hey, we handed this to you. And now it’s your job.” It feels like to me that you’re missing a big point there, which is one, that marketing doesn’t stop, right? Because marketing can play a profound role in helping with close rate mark. And you know, so your win rate could improve and your deal size could improve. And those are as one of our CMOs would say, “Win more win bigger,” right? How do we start to get at metrics? You know, I mean, and I know I mentioned to you off camera about Ross Graber talking Forrester, how he looks at things, it’s like, really, you should be thinking about share of opportunities, period. There’s 100 deals out there that you could be involved in, what is your share of opportunity? What’s your win rate and your deal size? And those are the only metrics in his mind that really, truly matter. I struggled to get from sourcing to win rate and deal size, have you been able to solve that conundrum?

Mike McKinnon: It’s interesting. So yes, philosophically, we all agree with that, right? There’s a lot of nuance into who influences a deal. You can’t measure it. So it would be nice if we could all say, “Yeah, we’ll all play nice. And we close a deal.” We’re all gonna say, “Yay, we all had part of it.” If you don’t track anything, you’re just gonna have to agree. And then someone’s gonna come in and say, “Hey, I gave you Mrs. CMO 100 bucks, I don’t see—where is it on any of this.” So one, you have to come up with some kind of a tracking, we track influence all the way to the deal closes. So I can look at campaigns that touch Ops. Now, if I was, let’s follow that. So now I say, Okay, let’s look at winrate. And go back to that example. And I say, I’m looking at winrate in my ops, and I want to look at the win rate on ops that had campaigns on versus Ops that didn’t—something very general, right? I would expect ops to have a better win rate, I find out they don’t, okay? Oops. Now I gotta go in and I got to look at, okay, I got to break these campaigns out. what campaign is pulling this down, that’s average down, right. And now you have to track it back up, right? And so when you’re winning, all of this is very nice. And when you’re losing in the spotlight gets turned on you, you need something of sufficient granularity to be able to sa, “This isn’t working this is.” And so unless you have the funnel, I’ll put it in quotes. Because it’s just a way to track efficiency. That’s all it is. It’s any kind of gate and a way to track that revenue somewhere your activity, your spend to its ultimate conclusion, you’re not going to last long when you get inspected. If you’re winning all the time. No one’s ever gonna inspect you and it doesn’t matter.

Drew Neisser: Okay, to be continued at another time. In your book, you mentioned this idea of business interlock. And it’s not a term that I see very often. You say in some companies, senior staffing, staffing, still look at marketing as an expense. What is business interlock, and why is it so important?

Mike McKinnon: Yeah. And it gets back to the idea what I said was like in a room and you’re sitting there and you say something that sales guys snickers or smiles, that is an example of business that’s not interlocked, right? And so I’ll give you an example. When I came in to LogRhythm five years ago, four years ago, the first meeting I sat on, was the CMO at the time, going over their QBR. And they were green across the board, celebrating, bagels, cream cheese, like great quarter, I sat in the sales QBR, terrible quarter, and I told them that, “Hey, marketing is celebrating over there.” And they’re like, “Well, all their metrics are fake, and they’re all wrong. And who comes up with those? Right? I don’t even know what their what their metrics are. And there’s no accountability over there.” Right. And I don’t think that that’s, that’s very similar to a lot of companies, right? So business interlocking. So that doesn’t happen. And that is getting together with a company and saying, “Okay, the company needs 100 million, typically, marketing drives this much, or what do you want marketing to try? What is it? Is it pipe? Is it booking, if you don’t want to focus on booking, then maybe it’s pipe. And so you take that pipe, and now everyone knows this is marketing’s pipe goal. And then you do have to break it down to maybe it’s number of accounts based on what win rate and deal size, right, you have to have those key levers to understand how many accounts are going to close. And that’s how you get business interlock, because you can come back and show sales and say, based on your goal of me driving this much pain, I need to drive 100 accounts to you. And you can track that.

Drew Neisser: And then you won’t have accusations of fake news. And that disconnect with one party. One really sad and one really happy, interesting. So there’s no getting around. This is basically what you’re saying. You’ve got to have the funnel metrics all the way through. Okay, so you call process design and management, the most exciting area in marketing operations, why? 

Mike McKinnon: Because it’s where you prove your value. I think it’s really where you can drive. For instance, the funnel tracking is process design. And so how was a lead that I moved through all of your gates land up in the SDRs hands, they’re going to call it a set number of times, you know, they’re all going to call it that number of times and then you’re going to get a disposition, its ultimate disposition to through five technologies. Right. And that’s process design. And when you design something that works like that, and someone like Cindy can sit down and look at a report that breaks down that attribution to any, any kind of segmentation, how efficient are my STRS? How efficient is my spin on PVC? How many calls does it take to get someone all that stuff we can handle Cindy, and she can tweak. That’s because someone sat down, design that and then it’s living breathing and always breaks always. And because you’re adding stuff data comes in, that you didn’t think about. It’s marked differently. It’s, it’s a race condition. And so someone that owns that process and can build that process, you can take that somewhere to a different company and talk about that intelligently. That is where the value of marketing ops lies. It’s not in Marketo, creating a campaign and sending an email, that’s pretty easy. You can take a course

Drew Neisser: One of the things that’s interesting about this is trying to get to predictability, right? And being able to create a model that can accurately forecast, we can get from this spend, to this amount of pipe, to this number of closed deals. You want to have—in an ideal world—that kind of forecasting. How long does it typically take for you to build that kind of model, where you feel like it’s accurately forecasting inputs and outputs?

Mike McKinnon: Probably about a year. So if I came in, and there was just such a, say their at state zero, and they weren’t too large, you could probably get it within a year, you can get the model relatively accurate the following year, by tweaking it and making sure that data coming in is correct each quarter, like monitoring each quarter by about a year. And that’s saying that you can change things immediately. Like it’s a small enough company where you can make those changes as you see them. And that’s from stage zero,

Drew Neisser: It makes sense because you also need certain amounts of data, normative data, to sort of look at quarter by quarter and see some outputs as you change your inputs. Okay, audience questions, anybody want to come on camera and ask Mike here a question Ajay Khanna from Explorium. Ajay, what is your question?

Ajay Khanna: Thanks, Joe. Thank you so much. And thanks, Mike. So my quick question was that now when you have like a separate RevOps group, which manages both like sales and marketing ops, where does the marketing automation admin set so that becomes a separate function then.

Mike McKinnon: Yeah, that’s under that’s under my group as well, too. So that’s, that’s an admin within my group, what I do is I like to break up the tech. Obviously, Marketo is our Marketo app is that’s theirs. That’s the Process Designer, he’s highly paid. But we have other—a lot of other point decks, and I split those up, I have admins, each person is an admin for one of those decks so they all get—become experts on those techs. And so if that tech breaks, I can go to that person. It’s all within the RevOps group. So yeah, I think what you’re getting at is yes, the CMO has to have a lot of trust in whoever’s running RevOps, because they’re essentially handing over control of their MarTech stack to someone that doesn’t report to them. And that’s what Cindy had to do. And so there’s an admin for each tech I have, I hope I answered your question. 

Ajay Khanna: Just a quick follow up to clarify. There are like a lot of functions there, right? For example, email marketing, for creating landing pages for creating all that stuff. So or even managing social. So that is still in marketing. And the admin is basically like putting together the processes and analytics?

Mike McKinnon: So it depends on how you want to structure that group. When I first got on board, everything was ticketed, if you want to send an email, the demand gen person would put the email in a Word doc and open a ticket, we would actually physically set up now, right? You need more people on the team to do that, right? We’ve sent stop that now we’ve given the field, certain responsibilities, they can do A, B, C, D, anything more complicated, has to be through a ticket to our more trained staff, right? And so it just depends on how you want to staff and how you want to break it up. It’s a balance, the more you let the field in there, the more that data could get messed up. And the more pressure you’re going to put on your admin team to fix things that the field breaks by accident. And so there is a nice balance there. So if you’re going to do something like that, you should start small and slowly open up and you’re going to realize that some field people can actually handle more than other field people. And you can identify those field people and say, Okay, you’re the knowledge expert in that region, go to him or her first. And if they can’t figure it out, they can then open a ticket to us, and we just interface with them. And that’s as you grow, you need to scale like that. 

Ajay Khanna: Thank you.

Drew Neisser: Alright, Dave!

Dave Bornmann: Thanks. I’m just curious. I know there are 1000s of MarTech solutions out there now. Is there something you’ve seen either as a category or a specific product in the last—I don’t know couple of years that you thought, “Wow, this thing is really interesting, and it’s really made an impact in a way that was unexpected.”

Mike McKinnon: Oh, wow. That’s a good one. You know, I’m—I can be boring and say Cooper Lead routing, that thing is pretty slick. I’m an ops person, so that stuff is nice. If I had to look at, you know, the predictive stuff that’s coming out is probably the really slick stuff right now—it’s expensive. I’ve seen 6sence several times, they have some really, really nice stuff, it looks really great. It takes a lot of money to run, it takes a lot of spend a lot of people to do, and it’s a, you know, ABM is a company wide initiative, so if marketing, just going off on their own and doing it you’re gonna stumble into some trouble, I would say Kubru is a great tech and then demand tools and lean something like lean data. Those are amazing for ops people, they move data around, they shuffled it around, they do do they attach lead to accounts, they give you campaign attribution, they do a whole bunch of stuff. The problem is they’re installed packages. And so while they give you great data, they lock you into this rigid structure of the way you can interact with that data, because they’ll give you such good data they need you to interact with in such a way. So when you’re building processes, you sometimes run into dead ends with those kinds of tools. But those are my favorite tools, because the reporting you can get out of them is amazing. And the data cleanliness that you can do for your team is amazing things that Salesforce can’t do.

Drew Neisser: One of the CMOs—in at least one—in a huddle mentioned doing an audit every year of their technology with a goal of if finding the person who’s responsible for that one, and they have to defend it. How often do you recommend an audit?

Mike McKinnon: You should do one whenever you come on to a new job immediately. Sit down with whoever’s running your tech and do an audit. And then you should do one anytime you buy a new tech before you replace the old tech. So anytime someone says, “Hey, I want this new tech, what’s it going to replace?” You audit that one immediately to get a baseline again, before you start looking at new tech and you use the same audit sheet, I have that template in my book, you can use the same sheet so you can compare the same as apples to apples. What you’d rather do is get more out of the current tech you have always, always, always always it sucks switching tech, whoever wants to switch tech make sure it has to just not be working. It has to be a poor poor buy.

Drew Neisser: So we have covered a lot of ground an amazing number of things that I think I know I’ve seen a lot of positive comments in the chat. So I think we’re going to wrap up Mike, thank you so much for joining us. If you’re a b2b CMO and you want to hear more conversations like this one, find out if you qualify to join our community of sharing caring and daring CMOS at CMO huddles.com Renegade Marketers Unite is written and directed by toon iser Hey, that’s me. audio production is show notes are by our friends at share your genius the music is by the amazing burns twins and intro voiceovers Linda Cornelius to find all the transcripts of all episodes suggest future guests or learn more about my new book in the savviest b2b marketing boutique in New York City. Visit renegade.com. I’m your host, Drew nizer. And until next time, keep those renegade thinking caps on and strong

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Renegade marketers. Unite is now a production of share your genius. Melissa Caffrey is our content director. The music is by the amazing burns twins and intro. Voiceover is Linda Cornelius to find the transcripts of all episodes, suggest future guests, or learn more about them. And the savvy is B2B marketing boutique in New York city.

Please visit renegade.com. I’m your host Drew Neisser. And until next time, keep those Renegade Thinking Caps on and strong.

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