Outbound marketing people have many challenges to overcome in the high-tech world. One of the most universal challenges is to create a constructive relationship with the sales force. This is usually difficult due to the fact that salespeople and marketing people think about and approach their respective roles very differently (more about the differences in sales and marketing psychologies in the next blog). It is also complicated by the fact that both groups need access to customers to do their job, with both organizations wanting to “own” the customer relationship. In consumer-oriented companies, the “customer ownership” role tends to be led by marketing, who creates the consumer “need” for the product, and channels that need towards fulfillment vehicles. This is true even when products are sold through retail channels, as the retailers still expect the vendor company to build and nurture the need, as they are (largely) there to satisfy that need.

In contrast, sales owns the customer relationship in all but the largest high-tech companies, especially in high-tech companies where the sales model is indirect (channel-focused or OEM-focused). In those cases, the opportunities for outbound marketing (or even sales) to interact directly with customers are very limited. In this business model, the indirect actors (OEMs, integrators, and distributors) are often seen as proxies for customers. Since indirect actors tend to have multiple product vendors who can satisfy a given need, their desire to help any vendor “get close” to actual customers is rather limited. This naturally leads to a competition between sales and outbound marketing for the limited time available to interact with these proxies. Since sales usually owns the relationship with the proxies in most high-tech companies, the challenge for outbound marketing people is to show the salesperson the value of engaging the marketing team with the customers

To be clear, my intention is not to turn you into salespeople; rather, it is to help you understand what drives a salesperson’s behavior.

Which brings us back to the purpose of this blog series – why high-tech marketers need learn to think like sales people. To be clear, my intention is not to turn you into salespeople; rather, it is to help you understand what drives a salesperson’s behavior. Contrary to the perceptions of many, salespeople are not just social animals whose primary focus is maximizing their commission checks. To be sure, these are important considerations to any salesperson’s decision process, but there are other considerations that are just as important. More importantly, which considerations are “front of mind” with your sales team (and even individual sales people) will vary greatly, depending on your company’s position in the market, your customers’ current fortunes versus their competitors, and the company’s competitive position with the salesperson’s customers. My goal is to help you identify which are the critical motivational factors for your sales team, and show how you can demonstrate to your sales team how you can add value to their efforts as they go about their job.

One great example of how sales and marketing people differ is the situation we started this blog with – customer visits. Marketing people have been trained that the ability to influence customers is directly related to the number of times we “touch” a customer, and the quality of each “touch.” The idea is that, even if the odds of a “win” (in marketing terms, a prospect) are low for any given opportunity, a large number of opportunities will result in some number of prospects. It is a law of large numbers approach, and not that dissimilar to a sales pipeline. However, it is not the way a salesperson looks at things. For a salesperson, it doesn’t matter if he/she has 20 opportunities that statistically should turn into 4 or 5 or 6 wins – the salesperson wants to win each and every one of the opportunities. As such, the salesperson controls the one thing that he/she can – the pace of the engagement, which is often referred to as the “sales cadence.” To a salesperson, each encounter in the cadence should bring something new to the customer that pushes the sales along, whether it is information or new players. This means that a salesperson will balance both the potential risk and potential reward for each new person that is introduced into a sales encounter. This is true whether the person is an engineer, a product manager, the salesperson’s manager or the CEO of the company.This risk vs reward factor is what makes it difficult for outbound marketing people to insert themselves into the sales cycle to validate messaging, understand customer needs, or any of the other important reasons for marketing – it is hard to show that engaging them in the cadence of a sale will have any positive effect on that sale. In fact, the reason that the outbound marketing person wants to get involved in the sales call is to improve sales and marketing collateral for future sales calls. While there are salespeople who will “invest in the future” in this manner, they are by far and away not the norm. Most would rather bring in outbound marketing people after the sale is complete (after all, at that point the marketing person can’t derail the sale). Worse yet, if the engagement is ongoing, rather than transactional (think of OEM design wins), the work isn’t done when the salesperson gets the win – it is just starting. By that logic, the marketing person will never touch the customer. I have been a marketing person in companies where this was the reality, and it makes for an extremely difficult situation at best.There are several ways around this situation. The worst approach is the “end-around” approach. Examples of this include: using executive management to force sales into engaging outbound marketing with customers; setting up customer visits without the knowledge of the sales account manager; or utilizing sales engineers to ask the questions that marketing needs to have asked. The first two approaches generally don’t work more than once, and if anything “bad” happens with the customer, the likelihood that marketing will be blamed for it is high. While the third approach can provide some useful information, the problem with it is that the information tends to be skewed (even sales engineers won’t ask some questions that marketing people would like them to), and it suffers from the “telephone game” problem of multiple levels of indirection. In contrast, approaches that provide value to sales can consistently produce good results. Examples of this approach include deal discounts for success stories, funded marketing heads for OEMs, or workload/application-based solutions that help the OEMs compete with their competitors. While these approaches generally require significant investment by the company, they provide the desired outcome (marketing involvement with customers) while improving the chances of winning for the sales team. Note that this is not meant to be an in-depth treatment of this issue (we will save that for another blog), but hopefully it illustrates how “thinking like a salesperson” can help marketing engage in a positive manner with sales.Hopefully, this first blog has helped you to understand why it is important for marketing people to try to bridge the gap between them and sales by understanding what motivates the sales force. Just like marriages, creating constructive relationships between sales and marketing requires communication, honesty, trust, and the creation of win-win situation for both parties. While I won’t use the idiom “marketing people are from Venus, and sales people are from Mars,” understanding that the motivations of the two sides are not necessarily congruent is critical to creating situations where both parties get something out of the relationship.

Whether your company is public or private, increasing the company’s valuation is always one of the end-goals of all your activities, whether they be engineering, sales, or marketing. Valuation tends to be driven by a handful of factors, with the most important ones being current revenue, revenue growth potential, profitability (often gross margin %), execution versus competitors, thought leadership, and defensibility of the company’s position in the market. While company valuation itself is usually expressed either by a company’s market capitalization or enterprise valuation (market cap plus debt/liabilities, minus cash/similar assets), the premium that a given company gets is often expressed in terms of the company’s “multiple”, which is typically market capitalization divided by yearly revenue. As an example, a company with a $5B valuation and $500M/year in revenue would have a multiple of 10 ($5B/$500M). If a company in a given industry has a significantly higher multiple than its competitors, it means that the company is perceived as being much better positioned for success than the competitors.

You can see a great illustration of this by looking at the three companies in the I/O networking space (Mellanox, QLogic, and Emulex). Based on data reported by MSN Money on April 24th 2015, the companies had similar annual revenues, with all three falling between $440M and $465M/year. All three companies also reported had slight net income losses (ranging from $18M to $29M). However, their multiples were significantly different, ranging from 1.28 for Emulex to 2.87 for QLogic, and 4.77 for Mellanox. The primary difference between the companies is the market’s perception of each company’s growth potential, indicated both by their historical growth and their potential growth based on the markets they are in. To illustrate this even more, Nimble Storage (a “next-gen” storage company) had a market capitalization on April 24th 2015 of $1.92B and a multiple of 8.43, even though their annual revenue was $228M, and they reported a net income loss of $98.85M. This compares with NetApp, which had a multiple of 1.77, on annual revenues of $6.3B and net income of $638M. The key differentiator is that Nimble Storage’s revenues grew 81% from FY2014 to FY2015 (Nimble Storage was founded in early 2008). Clearly, the market’s expectation of growth potential for Nimble (as a percentage of revenue) is significantly greater than that for the other companies in this example. What drives these perceptions of growth that have a significant impact on company valuations? Obviously, historical data is helpful, but that alone is not the only indicator the market looks at.

One important factor in driving growth potential perceptions is whether a company is seen as being a leader among its competitors. While this is generally related to technological leadership (after all, this is the high-tech industry), it can also apply to go-to-market leadership, supply chain leadership (think Dell in the 1990s), customer service leadership, or other similar factors. Another important factor is whether a company is seen as participating in hot new “high-growth” or “catchy” markets such as big data, cloud computing, or social media, or if the company is in unexciting, low-growth markets such as general-purpose servers and storage for the enterprise. From a marketing perspective, these perceptions are often called “market leadership.” For better or worse, a company cannot just expect that going after the right things and the right markets will automatically lead to the right perceptions about the company’s thought leadership. Rather, thought leadership has to be nurtured and promoted just like products do. Which brings us back to this blog’s title – are your markets and marketing efforts creating a buzz about your company, or are they are a buzzkill. Make no mistake, customers make judgments about your company with every interaction that they have with you, from what you emphasize and how you communicate on your website, to the look and terms you use in your collateral and your sales presentations, to how analysts speak about your company.

The “hot markets” that we spoke about earlier also have their own vernacular and jargon, and if you are not using that language correctly (or at all), customers and investors will not perceive that you are really serious about those markets. The companies that are seen as thought leaders may not have the best products and/or be the furthest along technologically in their target markets; rather, they have engaged their key personnel deeply in these markets, whether through industry associations, by having them speak as experts at industry gatherings for these markets/technologies, by writing articles and blogging on the subject, or by conversing extensively with analysts on the reasons for explosive growth potential in these markets. Thought leaders also have websites and collateral that reflects the dynamics in these markets, creating the perception of the leadership that they strive for.

A good example of this was Fusion-io, who was one of (but certainly not the only) the pioneers in PCI Express flash storage cards. Fusion-io differentiated itself in its target markets by hiring experts in the verticals that they targeted (banking, media/entertainment, etc.), and making sure that those people were “front-and-center” in the company’s marketing and sales efforts. It provided the perspective that Fusion-io not only understood how to make PCI Express flash cards, but also how customers would and should use this new and disruptive technology. Similarly, nVidia is seen as the undisputed leader in general-purpose computing on graphics processing units (GPGPU), which has changed the nature and architecture of supercomputing in a variety of industries. Like Fusion-io, nVidia has many experts on its staff for specific vertical industries that are a target of its GPGPUs (oil and gas, high-performance computing, etc.). Additionally, nVidia sponsors numerous conferences on GPGPU computing, provides universities with grants to utilize GPGPUs in their research, and provides tools for these communities. In both cases, these companies have been able to differentiate themselves far beyond simply the product level with their efforts, and are seen as undisputed thought leaders in their respective markets.

At G2M Incorporated™, we believe that a company’s thought leadership must actively be marketed for the company to achieve the valuations it aspires to. The G2M BuzzLine™ Market Index identifies candidate applications that have the halo of rapid growth that are critical to driving market perceptions that your company aspires to. Based on your company’s current products, roadmaps, and positioning, G2M will help you develop a strategy to exploit those markets, including methods to participate in those markets and PR/AR/IR efforts that will utilize your participation in those markets to drive valuation. The G2M Media Manufacturing Model™ is one example of a method that G2M utilizes to create compelling stories to achieve the media, market analyst, and investor analyst coverage necessary to drive increased valuation. Contact us to see how we can help your company achieve the valuation it deserves.