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Episode 46

The Death Of MQLs: How To Measure Marketing Performance

Jon Miller
Chief Marketing Officer at Demandbase

Most of today’s marketing performance is measured by MQLs. A marketing qualified lead is a prospect that the marketing team determines is worth of being passed along to the sales team.

The challenge? Salespeople in the B2B space are typically looking a best-fit accounts versus individual prospects. Therefore, marketing and sales aren’t on the same page.

Jon Miller, Chief Marketing Officer at Demandbase, talks about marketing and sales alignment. Using data to access purchase intent. Switching to MQAs (marketing qualified accounts) as a performance metric. And so much more.

Listen to this episode of the Leader Generation Podcast hosted by Tessa Burg, Chief Technology Officer at Mod Op.

Topics In This Episode:

  • Marketing and sales alignment
  • Account-based marketing
  • Non-linear customer journey
  • What buyers need to make purchase decisions
  • Marketing Qualified Accounts (MQAs)
  • Using data to access purchase intent
  • Evolution of third-party data
  • Most important data for sales teams

Watch the Live Recording

Full Episode Transcripts

Tessa Burg: Hello and welcome to another episode of Leader Generation brought to you by Mod Op. Our guest today is Jon Miller. He is the co-founder at Engagio and Marketo, a couple of platforms, I’m sure you recognize. And today serves as the CMO at Demandbase. Jon, thanks so much for joining us.

Jon Miller: Absolutely, looking forward to our chat.

Tessa Burg: So I know a lot of people are familiar with Engagio and Marketo. Tell us a little bit about your role today as CMO at Demandbase and what you’re most looking forward to in the next 6 to 12 months.

Jon Miller: Sure. Yeah, I joined Demandbase a little over two years ago when we made the strategic decision to merge Engagio and Demandbase together into a single platform. Combining Demandbase’s sort of top of the funnel expertise with Engagio’s middle of the bottle funnel expertise to build what we ultimately think is, and believe is, the sort of leading ABM platform. So, that’s been a great journey over the last two years, really building the new Demandbase.

Jon Miller: One of the biggest marketing challenges I have as the CMO of Demandbase is the company’s been around for so long that everybody, we have great brand awareness, people know, have heard of Demandbase, but they don’t know who we are today, in our current incarnation. They don’t know for example, that we compete against Zoom info as often as we compete against ABM vendors, because we sell data for example. So, it’s really an interesting marketing challenge to think about how do you get the whole people to recognize this isn’t your grandfather’s Demandbase. This is a new company, we’re doing new things, and we’re excited about it.

Jon Miller: In terms of personally excited in the next couple months. I have a marketing leadership offsite coming up in just a couple weeks and so much of our lives are remote and virtual these days that when I have the opportunity to get together with my leadership team and strategize and talk and hang out, it it’s really gratifying. So, looking forward to that.

Tessa Burg: Yeah, that is exciting. Right before the call we’re talking about, I had the opportunity to go in person to a trade show and the energy and the context, like how much more value I got out of the context is huge. So, I’m sure your leadership team will appreciate being together to discuss 2023.

Tessa Burg: So, you mentioned that one of your challenges is people seeing Demandbase in a different light, and I’m sure you have to align with the sales team. And you recently wrote this awesome LinkedIn article, “A Marketing Sales Alignment”. Tell us a little bit about from your perspective, what types of organizations must have marketing sales alignment as a practice and as a principal in a process, not just as a theory of, yeah, we know what sales is doing, we’re trying to create opportunities for them.

Jon Miller: Well, I would argue pretty much every organization, needs this, the way you ask the question, every B2B organization needs it. Ultimately, I think there’s a single revenue team and you’re trying to put points on the board. You have players in different positions on this team. So, there might be the forwards and the full backs or whatever, and they do have different roles to play. But ultimately if you’re not working together as a unified team, you don’t care how good the individual players are, you’re not gonna win. So, I think it’s pretty darn essential for almost any organization.

Tessa Burg: And do you have to be doing account-based marketing to have an aligned sales and marketing team?

Jon Miller: No, of course not. I also think that too many people think of account-based marketing is that yes or no proposition. We’re just talking about your go to market. What is the way you approach generating pipeline and revenue for your business and rather than it’s either demand gen or ABM. I think it’s better to think about it as a spectrum. And it’s a spectrum of styles based on more than anything else, your average deal sizes.

Jon Miller: So, at the very, very top, if you’re selling eight figure deals, you are almost definitely practicing truly bespoke one-to-one account-based marketing. Because that’s the right approach for eight figure deals. If you’re doing mid six figure deals, you’re probably going to practice what I call one-to-few style of ABM, which is still very focused on accounts, but a little bit more focused on individual segments, micro segments, as opposed to truly markets of one. If you have lower six figure or high five figure deals, you’re probably doing one-to-many ABM, which is again, much more scalable, more uses of technology. And maybe if you’re in the mid fives, you’re doing what I call just targeted demand gen, which is traditional ABM tactics, but focus on specific named accounts. Or you might do regular demand gen, broad-based demand gen to a market. If you’re below that or you might have inbound or PLG, even at the lower end of that.

Jon Miller: Very few companies fit into just one of those little micro bands. Most companies, including Demandbase span across. And so you’re going to have more than one style to your go to market. And there’s nothing wrong with that. But what those all have in common still is that, well except for PLG where sales is kind of out of the picture until later, but even then, they’re still part of the long term picture where they all have in common is still there’s a revenue team. The way that team works might be slightly different at the very lower end of demand gen, it might look more like a relay race where marketing does something, hands it to an SGR or a salesperson who hands it to a sales rep, still a team. If you’re handoffs are broken, you’re going to drop the baton and lose.

Jon Miller: So, you still need to make sure the process is working, but that looks different than if you’re more of the ABM style team, which is more like soccer or football, where you’re going to be passing the ball back and forth as the ball moves up and down the field. Every case your team, maybe the team dynamics are slightly different depending on the style you’re practicing.

Tessa Burg: So, one critical aspect of successful and cohesive marketing sales alignment is making sure those handoffs are really healthy. And something I found interesting in your article is that the customer journey is no longer linear and maybe a piece that’s crippling those handoffs are affecting the quality is we might still be thinking of it as linear or wanting it to be linear, measuring it that way. What are some signals that you’ve seen that says, “Hey, this customer journey has evolved and it’s not just happening in one linear step by step fashion.”

Jon Miller: I think it depends a lot again, based on your deal size. If you have a very simple product purchased on a credit card for a couple hundred dollars by single person, maybe that is somewhat linear, but at least it’s kind of one person. But the reason we start talking about ABM, account-based marketing types of things is once you get up above about $10,000, you’re guaranteed that the purchase is made by a buying committee and not a single person. Which means that if you get a lead or a response that is just one small signal about what’s happening in the broader buying committee overall.

Jon Miller: So, think about it. One person might follow something that looks a little linear in their path. Eight people, 20 people, all kind of talking with each other and interacting and intersecting at different times are going to almost definitely follow something that looks non-linear and very chaotic. Think about the soccer analogy I just used, right? Track the path the ball takes on the field, as it tries to get ultimately into a goal. That looks incredibly non-linear. And I think that’s just the reality of the way most of these buying cycles are happening, except in the most simplistic versions of the world.

Tessa Burg: And how can you in an aligned sales and marketing practice keep tabs or better understand where that buying committee is at in their decision process and what they still need to progress closer to close.

Jon Miller: Yeah, that’s a really good question because I’m also a big fan of defining and quantifying your account journey or your buying group journeys. Which looks sort of linear. And so, the question is how can you have linear measurement stages on a non-linear process? And I’m going to blur my sports analogies here just a little bit, but imagine American football team where that football takes a very non-linear path, ultimately towards the touchdown, but there’s still yard lines on the field. And if you know that you are on your five-yard line, you probably got to punt the ball or do something far. Whereas if you’re on their five-yard line, you’re probably going to run the ball in. And so, knowing where you are or tells you two things: one, it tells you what plays are most likely to be effective. And it also gives you a sense of how close you are to scoring. Your chances of scoring are much better on their five versus your five.

Jon Miller: So, I think that same analogy can apply to a non-linear process. Put the yard lines onto your field. Know right now where that account or that buying group is. And now it might go backwards and that’s okay. But by knowing where they are at any given point, it still tells you a lot about, A, what place you should run and B, how likely are you to get them towards your goals.

Jon Miller: So, in my book, I talk a lot about just how to define the account journey in the stages of the account journey. How do use predictive analytics to map and understand where an account is in the journey. But to super oversimplify, you can basically think about just a couple core stages. You could have a stage that I just call qualified. These are the accounts that are in your ideal customer profile and ones that you might actually want to sell to, but they are otherwise totally cold. They don’t know who you are. They don’t have any interest in your category. You can then move to a stage like aware. These are accounts that are at least showing some interest in the category.

Jon Miller: Then accounts that are engaged. These are now starting to interact with you. They’re coming to your website, they’re downloading your content. Some things like that, but they’re not yet in a buying cycle. And then you can have a stage, I like to call, the marketing qualified account or the MQA. It’s a play on the classic marketing qualified leader, MQL. And this is that where the magic happens when all the signs are showing that this account might actually be in a purchase cycle and we really want to make sure we’re engaging and connecting with them.

Jon Miller: And then from there, you can have your opportunity stages, meeting, opportunity, and then even beyond into kind of post-sale customer stages. You can make that more complex. You can make it less complex. I think it’s important to customize it for your business, but something like what I described tells you so much about how to think about interacting with that buying group.

Tessa Burg: So, you mentioned MQA actually in a purchase cycle. What are some, so first I’ll give you a little background, some of our clients, maybe I shouldn’t say that, sometimes us too, we’re very subjective around what those signals are that say someone’s actually in a purchasing cycle and maybe we’re too excited about seeing multiple email addresses come in from the same account. We’re like, “Ooh, they’re totally jazzed now because we have four people from the same account,” but what are the real signals? Can we make it more objective to say objectively, since this account has taken these activities, now we know they are actively in a purchase cycle.

Jon Miller: I mean, in a perfect world, this is where you want to apply some machine learning, predictive analytics to the problem. And you want to look at three things. First of all, who the account is, second of all, what are they doing with your first part effectively in your first party world, stuff that you track on your own systems? Are they coming to your website? Are they responding to your marketing campaigns? Things like that. And then you ideally layer on third-party intelligence on top of that in particular intent data. And intent data is data that sort of lets you know, what accounts tend to be reading and researching out on the open web. And when you see patterns and intent data, all of a sudden these people are starting to research your topics a lot more. That sometimes are often correlated with a surge in possible buying activity.

Jon Miller: So, you can look at these things individually. A lot of companies just look at intent data and if they see a high surge of intent data for an account, they think, well, that’s worth at least reaching out and kind of figuring out what’s going on. Or you can use the predictive models to make it more sophisticated. Look at the pattern of behaviors that your accounts follow as they have, your other accounts have followed as they have led up to becoming opportunities. And then look for other accounts, similar looking accounts that are showing similar behavior patterns.

Jon Miller: So, one last thing I do want to say, I think this is also evolving and changing over time. Back in my Marketo days, there’s no such thing as intent data. Everything was based upon what they did on your site. And that was sort of okay, because people would come to your website and they would fill out a form to get your white paper. And everybody was happy. Buyers today have gotten savvier. They know if they fill out a form on your website, they’re probably going to get some phone calls and emails they don’t want. And so they’re trying to do more of the research anonymously and off of your website. And so that’s where those third-party data signals have become more important.

Tessa Burg: Yeah, I think that’s very true. And we see people using bad email addresses all the time or a box where they can just push off any marketing and sales communication. So, we layer in this third-party data, how, or will that change as privacy laws and the use of cookies evolves over the next year or so?

Jon Miller: Well, first off I’m one of those people who doesn’t think this is happening as soon as most people think. Google’s pushed it off once they just pushed it off again, two weeks ago to 2024. And I think they’re aligning with the industry saying, “Hey, this is unlikely to get pushed off until the industry has a viable alternative.” That’s still a privacy compliant, viable, alternative unified ID from the trade desk and live ramp seems to be a really, really good one. Which is effectively a privacy compliant cookie. So first off, I don’t think this is happening anytime soon. I think when it does happen, there will be reasonable alternatives in place.

Jon Miller: But for B2B specifically, we’ve got something, an advantage that the B2C marketers don’t have. The reality is most of the privacy concerns are B2C related. People don’t want to know our financial information or HIPAA information or what we do personally, but in B2B, most the information we want is not about the person, it’s about the company. And even intent data is not, we’re not showing saying that Tessa is showing intent for something, we’re trying to show that the company is showing intent. So, it’s much less scary if you will, from a privacy perspective. And we can also use things besides cookies, like IP addresses and so on. And obviously IP address took a big hit in March of 2020 when we all stopped working in the office and started working from home. But you know what? We’ve had over two years now to catch up and start to really figure out which personal home addresses map to companies. And it’s never going to be perfect because people change jobs and whatnot, but it’s pretty good and getting better and we’ve got that as a backup to cookies always.

Tessa Burg: So, you mentioned marketers spending more time looking at patterns, really understanding signals based on their ideal customer profile. And then also setting aside these concerns about cookies going away or not. Because in reality, our number one goal is to serve up content and experiences that benefit the entire company. Of all of this data that we’re organizing, what of it is most valuable to sales teams to help them understand, it’s a lot. This is a lot, journey’s not linear. We’re collecting all this stuff. So, when is it? And what’s the most important stuff to surface up to our sales team so they know when to take an action.

Jon Miller: Well, ultimately sales have one resource really to work with one, anything else and that’s their time. And so, the most effective salespeople make the best decision about where to spend their time. And then secondarily, what should they say once they’ve decided who to contact. But the most important thing we can do is help them prioritize their time on the things that are going to be most effective.

Jon Miller: In a classic lead world, somebody who raises their hand and says, “Hey, I’m interested,” right? That’s usually worth their time. And that’s great. And we should keep doing that as much as we can, hand raisers are awesome. But there’s usually not enough hand raisers to completely fill what they want their prospecting needs. So how else can you focus their time and efforts? And that’s sort what we talked about.

Jon Miller: I personally think for most companies, the MQA is the right approach. Find accounts that are showing signals of being hot and in market and interested. And then don’t just reach out to one person, reach out to multiple people at that company. I like to say, it’s not a no until you’ve heard “no” at least a couple of times, for example. And well, we’re not talking about consent. So, we’re talking about B2B, just to be clear for that line. Don’t want that one out of context.

Jon Miller: But if we take a step back, this sounds easy. All right. Just we’re going to help people prioritize their time. Historically, this has been harder than it sounds right. And it’s been harder than it sounds I think more anything else because marketing and sales tend not to look at the same data or even in the same systems. The Marketo world was about leads. And if you use Salesforce, one of the most common CRMs, there’s a tab of, “Hey, here are leads”, but salespeople tend to be on the account tab in Salesforce because at the end of the day they’re selling to businesses. They’re selling to accounts, their opportunities are at accounts.

Jon Miller: And so, you’ve had this world where marketing was working at leads. Sales is looking at accounts. You are literally not on the same page. And so, I think a lot of this starts with just getting the sales and the marketing teams, looking at the same data. Aligning on,” Hey, which are the accounts that we care about?” How are we going to prioritize into those accounts? What actions or signals, if those accounts do certain things, which one of those are worthy of notifying the sales team. It’s not like a lot of stuff, but just having some of those core conversations can go such a long way.

Jon Miller: I don’t want to take you too far off your track, but there’s three kind of just specific things that I would recommend companies think about doing for alignment here. Okay to get into those?

Tessa Burg: Yeah, no, I think that would be great.

Jon Miller: So, the first one is I’ve alluded to, which is aligning on the accounts that matter. And I was just talking to a company that I advised last week. They’re very sophisticated with their ABM. They have scored all their accounts and ranked them and on all sorts of magic to basically come up and say, here are the target accounts. But the mistake they made is that marketing did that and then came to sales and said, “Here are the target accounts.” And by definition, sales is going to be a lot less bought in to that process.

Jon Miller: And instead, what I recommend is marketing should do all that analysis, score the accounts and rank the accounts and bring all this amazing data to the table and then work with the sales team to really understand how many accounts they can have. And I’ll explain that one in a second, and have the salesperson pick the accounts.

Jon Miller: So, in Demandbase each of our reps get five tier-one accounts, 30 tie- twos, and 100 tier-threes and the rest of their accounts in their territory fall into what we call tier four. Might be different from other businesses, that’s how we do it at Demandbase. But the rep picks it. And so that marketing driven, but sales zone process is my first tip so that your sales really feels ownership and buy-in of the accounts.

Jon Miller: The second thing I recommend, is defining what I call, your account entitlements. So, what this means is literally write down in a shared document. If we say something is a tier-one account, this is what it means. Marketing will do these things. Also, sales will do these things. If it’s a tier-two account, if it’s, this will do, if it’s a tier-three will account, this is what we’ll do. Even, and then you can even talk about what we call triggered entitlements. If a tier-two account hits the MQA stage, what will we do. Or has an open opportunity, what will we do? Writing this down, marketing does this, sales does this ends up in your contract between the marketing and sales teams, which is great for alignment and clarity. And it also what’s cool about is it basically will end up telling you how many target accounts you can actually have. ‘Because too often people pick the accounts first and then say, “Oh hey, this is how to do a tier-two.” But by turning it around, you say, “Okay, wow, I can only have five tier-one accounts per rep because the way I’ve defined what it means to be a tier one.” So, it guides that account selection process.

Jon Miller: And then the third tip I have is to implement what I call, account-based stand-ups. And this is where a rep and a marketer and a sales development rep, if you have one, get together every two weeks for 15 minutes, it’s not a forecast call. It’s a call to talk about that rep’s target accounts. What’s happening, and to basically coordinate the plays that we’re going to run. And to again, go back to the sports analogies. Ideally marketing is bringing a playbook to the table. Here’s things we can do. And the sales rep is the quarterback. They’re the one calling the plays because ultimately they own the account. But the standup is effectively your huddle, your ability to really talk about what’s happening and then coordinate the plays.

Jon Miller: And it just it’s these three things, none of them sound all that complicated, but just even one of them does wonders for sales market alignment. You do all three and you’re definitely going to be one of the best line companies out there.

Tessa Burg: Yeah. I love how you simplified it down into those three things. Because there’s so many different ways companies can personalize that. But I think there’s a few things you said earlier in the conversation. One, I think a lot of B2B marketers need to understand that it’s $10,000 that signals a committee buy. I know just from interviews we’ve done on Leader Generation and then talks with clients. I think they set that threshold a lot higher. They think it has to the starting points a 100,000 or more, $200,000. And that’s what signals a committee buy. And you are saying it’s much lower.

Jon Miller: Well, just think about for your own company, what needs to be involved for a purchase? I know certainly Demandbase above 10K it’s the buyer, it’s their manager, it’s me, it’s finance. I mean alone. And I bet for most companies your own internal processes resonate with what I’m saying.

Tessa Burg: No, I agree. And it’s not only that, but you should be applying that same process all the way down, even for the smaller ones. And to your point, it could be a one to many, but if you recognize that there are multiple people in that buying decision, you get more out of that content and context. And even the salesperson’s time, the more, “Hey, it’s not just this one person involved in this decision.”

Tessa Burg: The second piece that I thought you said that was really interesting is that it’s a spectrum, that demand gen and sales and ABM don’t have to be separate teams and we’re all working towards revenue. And I really like creating these playbooks underneath that spectrum and defining that up front. Who’s going to do what, because then it doesn’t matter if your tactics off, if you have some subjective thing for where you put top funnel versus bottom funnel, if you get that mixed up. But if you’re all in agreement is what the marketing team’s going to do and what the sales team’s going to do, then you can measure it over time and make adjustments from there. You don’t have to get caught up in the debate on what’s the top funnel versus the bottom funnel tactic.

Tessa Burg: So, I really love those two points. And I think those are things marketers could take back and start looking at today. Because how can they improve those handoffs? So, my last question is more around accountability. So, you mentioned there are different players on the team. What are those core metrics? And do we have shared accountability or how does marketing get measured differently than sales in this single revenue team structure?

Jon Miller: Yeah, I’m really glad that you asked that because it’s sort one of my favorite topics to talk about these days. So many marketers today are measured either on MQLs, which is really not a good metric for a lot of reasons we talked about, but most companies are beyond that and they’re measured on either marketing sourced and or marketing influenced pipeline. And I think that’s actually a terrible idea. And it’s the antithesis of the teamwork that I’ve been talking about. And most marketers know this intuitively, if a sales rep or an SGR sources a deal, marketing guaranteed has touched that account at some point in time. And you can sort of point to all the things that marketing did, even though sales reps said, “Hey, I sourced the deal,” but, and I’ve seen with SGRs too, SGR prospects into account for a year, the AE finally calls in and like, “Hey look, I created an op” but that’s not what you want. What you want is this team thinking.

Jon Miller: Back to my soccer and football analogies, the end of the day, nobody’s measuring on the scoreboard. Here’s how many points the wide receiver scored versus the running backs. What’s on the scoreboard is did we get enough points to beat the other team? And that’s what we need to have here in sales and marketing, we want to just measure, is there enough pipeline to make our goals. And everybody, marketing, sales and the AE should be measured against that total. That means SGRs get paid for stuff that maybe they didn’t directly source because they probably still touch that account. And it encourages this sort of team-based thinking where the play is, the AE calls that person, the SGR calls these people, and marketing’s doing this kind of support at the same time. And you’ll never get that kind of coordinated team-based effort if you’re in a world of trying to give everybody portioning out credit, as opposed just focusing on what really matters.

Tessa Burg: Yeah, no, I love that answer. I was smiling as you were talking because I can personally relate to a lot of that where it’s like, “Oh no, I did. I mean, I already knew this person I’ve been calling them all the time. I did all the work.” It’s like, “Oh yeah, okay.” Our brand, our marketing, we had zero influence. It is all working together because like you said earlier, buyers are savvy. They’re not going to make a decision in isolation based off one conversation. They are going to third party websites to validate what they’re hearing and to do their own research.

Tessa Burg: So, Jon, we are at time and I really appreciate all this awesome insight. Think you gave us some really accessible frameworks to start rolling out tomorrow to improve our marketing sales alignment and also how we measure. If people want to get in touch with you or read more of your content, especially your book, where can they find that information?

Jon Miller: Yeah. Everything we talked about in a lot more is covered in my book, “Unspam your brand: The definitive guide to a smarter go to market with account based marketing” and you can get it off of the demand based website. It’s a real book. It’s not like some flimsy throwaway ebook. It’s 260 pages, but we do give it away the PDF for free on our website. So, I recommend that to everybody listening. If you need to get in touch with me best way is on LinkedIn and mention that you heard the podcast.

Tessa Burg: Perfect. Well, thank you, Jon. If you want to hear more podcasts from Leader Generation, you can visit tenlo.com/podcast, and we will talk more next time.

Jon Miller

Chief Marketing Officer at Demandbase

Jon is a marketing entrepreneur and thought leader. He is currently the Chief Marketing Officer at Demandbase, the leading account-based marketing platform. Previously, Jon was the CEO and founder of Engagio (acquired by Demandbase) and was co-founder at Marketo (Nasdaq:MKTO), a leader in marketing automation.

Jon is a frequent speaker at conferences including Dreamforce, MarketingProfs B2B, Marketing Operations Executive Summit, OMS, and the Marketing Nation Summit. He is also the author of numerous e-books including Complete and Clear Guide to Account Based Marketing and the Definitive Guide to Marketing Automation.