Welcome back for Part 2: Setting up 2022 for Success, Setting Targets & the Job to Be Done

In Part 1, which you can find here, we unpacked the vision setting and the concept of developing and vetting a marketscape to ensure alignment and conduct a sanity check against the path you are about to embark on.

In Part 2, we will dive into setting targets and defining the job to be done for marketing. As easy as this sounds, it is incredible how fully understanding the scope and magnitude of the targets before you and the active market can set you up for success or leave you scrambling with for more budget and more resources.?

Let's dive in!

Step 3: Setting Targets | Baseline/Management/Stretch

Lack of direction, not lack of time, is the problem. We all have twenty-four hour days. - Zig Ziglar

After pressure checking your roadmap and your marketscape against your vision and initiatives, it is time to look at setting targets that move you on your way towards that vision. It is common for businesses to develop targets across 3 tiers. Those tiers are your baseline, management, and stretch targets.

• Baseline Targets:?These are the minimum you need to grow as a business to hit your growth targets and sustain your business. If you hit these targets, you have delivered against the minimum expectations on you. Baseline targets are typically the ones you give to your board or Wall Street.
• Management Targets:?These are the targets against which management is measured, sales targets are set, and resourcing plans are based. This may be growing 60% to 100% to several hundred % for many startups over a year or two. For a publicly traded company, this may be growing at or above CAGR for your industry, or your executive suite is focused on showing acceleration past the competition and taking market share. These are the targets you give your teams internally. The majority of managements bonuses are tied to these targets and their functional area performance.
• Stretch Targets:?These are the targets you would hit if everything were firing on all cylinders, and you would be over the moon. These are great to have if you're over quota and want to inject more into the business to accelerate towards your vision. You have a clear next milestone ready to go to keep your team's eye on the prize. Management usually has additional bonus compensation tied to this target.

The next obvious question is, where is this growth going to come from? A few areas may be:

• Expanding into new geographies
• Scaling your sales team to be able to cover more of a specific market you are seeing success in
• M&A
• Reducing churn
• Increasing your ASP in the same volume of deals YoY
• Expanding your sales and share of wallet with your current clients
• And many more...??

Where this growth will come from should be highly informed by your marketscape and pressure checked against that, so you aren't over your skis with your targets. Are you wanting to exceed CAGR and gain market share over your competition? By how much? What is that going to take from an investment perspective? One common mistake is simply saying we want to grow by 60%, figure out what that means in sales, and increase sellers to a quota ratio to get there. While this is one way to set targets, this is similar to having a hope strategy - it's inspiring but going to be a hard road to make it a reality. It is critical to understand things like how much demand is there in the market? How much needs to be created by your marketing team? How much is coming up for renewal from your base and your competitors’ bases? Etc.??

Another thing to ensure is that your targets take into account new sales and your core business objectives and products that you have outlined in your VSEM. Are you adding a new product, app, or enhancement? If so, how much of that do you want to sell vs. your normal motion? Where are you going to sell it? If you don't measure it and create a target, your sales teams will focus on selling the easiest and fastest things to get to their quota,?NOT?what you strategically need them to sell to move toward your vision.??

Your Teams Will Sell What is Easiest to Hit Their Quota, Not What is Strategic to the Business. You Make Their Quota Strategic.

Story: One company I worked at had made a large acquisition into a new partnership, adding significant capability to their technology stack. However, the sellers did not have a goal against that new technology, so they sold the products they knew already because they were easier. This led the business strategy to come up short of growth and expansion in the new product line to not achieve the strategy that had been set forward.?

Side Note || It is important to sanity-check your targets against the size and growth of the market and, as you zero in, to ensure your leadership teams understand what this means in the context of the overall business strategy.?||

One business I've worked with, a region was only 6% of the company target, yet they had a reputation for being the squeaky wheel. It became critical for the leaders across the business, but especially in that region, to understand where they stood regarding overall focus and priority. For them, it was supposed to be a rebuilding year, and as such, they were going to need to be very smart with the resources allocated across sales & marketing. They were not going to get all the fancy custom campaigns, technology licenses, etc., that other regions may get because those regions were more strategic in the current year. The good news is that with this honest conversation and level setting early on and upfront, they were able to think incredibly strategically about how and where they deployed their finite resources vs. where they utilized elements from corporate.

One last sanity check against your targets is looking at your current reality. How much of this target is already in the pipeline? Based on your win rate, how much do you expect to close? Where is the delta going to come from? How much from what regions or products? How much from marketing? This is where bad CRM data can come back to haunt you. Sellers love to record their wins, but if they have to have a quota to pipeline target, they will often leave deals that are truly lost just sitting in there to keep their sales manager off their back. So, as you're looking at how much is currently in the pipeline, do your best to set parameters to exclude those zombie deals. Finally, look at your sales cycle time as a part of this. If you want to grow by XX% next year, but you have a 12-18 month sales cycle, all your deals would already have to be in the pipeline to have a hope of hitting that growth target, and anything net new is improbable to impact the following year. This is another trap I have seen executives at both public and private companies fall into as they are setting growth targets that the current pipeline and long sales cycles do not support.

Some other targets you may want to consider as a business to metric yourself against:

• Reducing churn by a %
• Expansion targets by customer or by product
• In-organic growth through M&A

Getting targets set is something that then lets the planning begin. What resources are necessary across working dollars and headcount to achieve these targets and your strategy in the coming year. Sadly, many businesses wait until the end of Q4 to see their actuals before they lock on their next year's targets. This causes last-minute scrambles and starts your team off on their heels for the following year rather than with a strong playbook that has been well thought through.

Step 4: Defining the Job to Be Done for Marketing

At a minimum, you should now have your targets set to know how to allocate your marketing effort and spending. Additionally, you will want clarity on how much of this target is expected to be originated by marketing vs. influenced. I define these as:

• Marketing Originated:?Sourced from marketing, would not exist without marketing efforts.
• Marketing Direct Influenced:?Sourced by sales, but marketing had a significant impact on the opportunity through the sales cycle. Eg: Download content, attend an event, or other activity determined as significant between sales and marketing.
• Marketing Influenced:?This is the least amount of marketing touch. Not marketing sourced and was exposed to marketing activities like advertising, emails, etc., but no action was taken. Exposure still has some benefits, and you ideally want nearly 100% of your pipeline and targets to have been touched in some way by marketing for aircover or other messaging to support the deal cycle.?

With originated targets set, you now know the total amount of opportunities you are accountable for. You may choose to deduct the current pipeline that is marketing originated from this just as a seller removes what they think they will close from their existing pipeline from what they need to hit quota.

If you haven't already, this is where you will build your reverse funnel to back into how many accounts you will need to go after to hit the target number of win's you're on the hook for. Here is a simple example for a singular product. You would want to generate one of these for each product and region to reflect their product set, win rates, and deal sizes.

If you would like the link to this Excel example, just DM me??

It is important to think about the number of accounts you need to go after, not a 'lead' number. Obvious, I know, but it is easy for marketers to think they need 1000 leads when they need 1000 accounts, there is a big difference given you can have multiple leads per account, and you should want multiple leads per account.?

In our example, you'll want to look at how many accounts you need to hit your target overall and then, using an intent tool like Bombora, see how many accounts are actively in the market for what you have to sell. If you're lucky, there are more than enough to cover your needs for the year, but you may not. There will be new businesses showing intent, but the volume is never a sure thing. One important thing for marketers to account for is an informed guess at how much intent they may need to manufacture out of their TAM with effective brand advertising addressing the why change and why now questions the market needs to hear.

Another thing to do if you're a marketing leader is to identify where the conversion friction points are and direct your product marketers at those points to drive efficiency through the pipeline. If you can improve a win rate by 2% it can have massive impacts on the top of funnel demand needs and significantly reduce the total number of accounts marketing needs to bring in.

Once this reverse funnel is calculated, you should vet your numbers and assumptions with your sales leaders, sales ops/marketing ops, and marketing teams. Pressure check the numbers and see if anything seems 'off' and document the heck out of adjusted assumptions, things like an average deal size or win rate different from what the data told you.?

Story: I had a seller once tell our CFO that the ASP was $1 million more than the data showed us, and that resulted in the model not reflecting enough accounts needed to fill the funnel, and thus not enough budget was requested that year. These are lessons I won't ever forget from early in my career after having to scramble and figure out how to make do with what we had. The good news, we pulled it off.

Next, if you haven't done so, you'll want to calculate the cost per something to help you back into your budget needs for the year. I like to calculate cost per meeting because you typically drive meetings aligned to specific products, geos, etc. It helps you allocate working dollars based on the priority of targets to the business. Additionally, this is where you will allocate your team's time as well, especially if you're operating in agile. You will want to ensure the team's effort/hours are going against the right things unless you're lucky enough to have a sprint pod for each priority.?

Side note || I tend to leave marketing technology and big tradeshow events out of my cost per meeting calculation. Why? I have found that tradeshows are often more branding and pipeline acceleration than meeting generating for their cost, yet you have to be there, or people wonder if you've gone out of business. Tradeshows are a necessary evil and likely will continue to be for years to come. Similarly, when you invest in MarTech, you do so to drive efficiency: better targeting, faster campaign generation, etc. I like to picture the MarTech/SalesTech as the engine with the programs and campaigns being the fuel that makes it run. Your engine can be very fancy or basic, but either way, it needs gas. That gas is the working dollars of content, advertising, gifting, content syndication, etc. that fuel technologies and deliver meetings. ||

Once you have your cost per meeting, opportunity, or whatever you have decided to go with, now you can make an informed budget request of what will be necessary to achieve the goals of the business and the goals of marketing. It becomes simple math:?

# Of Meetings x $Cost Per Meeting = Working Dollars Requested

Now the fun part!?

For the sake of round numbers, let us say marketing needs to generate 50 meetings at a cost to acquire a meeting of $1000 each. That product's working marketing budget would be $50k to achieve that goal. The fun comes in when you now empower your teams to go figure out that puzzle! Here is your goal and the right amount of funds (gas) to achieve that, along with the MarTech engine and capabilities you have at your disposal. How are you as a team going to accomplish that? This approach empowers your product marketers, demand gen, ABM, content teams, etc. to all think about what will be the best and easiest path to get there. With that budget, what is the right mix of advertising, content development, demos, events, other tactics, and sweat equity to achieve that goal. This empowerment and accountability bring teams together and give them ownership, transforming them from order takers into collaborative team players who have skin in the game and want to see the business and their team succeed.

If you're still reading by this point, WOW! You've made it to the end and thank you for taking the time as I truly appreciate it. What did I miss? What would you change?