Should marketing be compensated like sales?

Robert Lesser — Mon, 01 Jun 2009 19:33:00 +0000

Should marketing carry a quota on revenue?

The answer is yes according to Joe Payne, CEO of Eloqua, a marketing automation software vendor (far left of above photo). 30% of the Eloqua marketing team’s pay is contingent on Eloqua achieving its revenue objectives.

I recently spoke with Joe Payne at a panel discussion on sales and marketing alignment.

But Joe, shouldn’t marketing be compensated based on sales qualified leads (SQLs) or sales accepted leads (SALs)? I asked after the panel.

Joe noted that he wants marketing to be aligned with the corporate goals. SQLs or SALs are not money in the bank. Joe’s concern is that marketing is savvy and can game the system by persuading sales to accept leads.

Joe should know. Unlike most CEOs, Joe’s background is in marketing with stints at MicroStrategy, Coca-Cola and Procter & Gamble.

But how can marketing influence the sale after the lead has been passed? Joe believes that marketing can play a strong role by creating tools such as ROI calculators.

Personally, I would be reluctant to adopt Joe’s framework especially given the high 30% rate:

If marketing was gaming the system, a high rate of disqualification of accepted leads by sales would quickly set off alarm bells for sales management and senior management.

Once a lead is passed to sales, marketing loses control of the lead. Lead leakage beyond marketing’s control can take its toll: leads either contacted too slowly or not all, leads who suffer from a poor sales experience, or falsified documentation in the system indicating lead follow-up that didn’t transpire. Unfortunately marketing is unable to plug these leakages that may occur in the sales department.

Marketing’s role in demand creation and nurture marketing dwarfs its role in helping to close leads. Yes – marketing can influence closed sales through tools and collateral but its role is much diminished. Put it this way, if tools and collateral were that important, why do few (if any) organizations gauge their influence on the sale or ROI?

The telequalification team is not significantly bonused on revenue and is closer to the sale than marketing. According to a recent survey by Phone Works, the inside sales team responsible for telequalfication is most often bonused on the quality of leads (58%), appointments (54%), number of leads (50%) and pipeline contribution (42%). Only 35% of organizations used revenue as a factor in determining bonuses (down from 65% in 2007).

Let’s be fair, especially during this recession. Give marketing a quota but on metrics within their realm such as sales qualified or sales accepted leads.

If a B2B marketer is to be measured on revenue, then call it a bonus and make it a smaller proportion of pay such as 10%.

PS. For a recent article in the Economist discussing agency compensation in the B2C world, click here.

Photo Credit: Robert Lesser’s photo of (l to r) Joe Payne, CEO Eloqua Corp.; Frank Falcone, Senior Product Lead, Microsoft Dynamics CRM, Microsoft Canada; Ajay Sirsi, PhD, Associate Professor, Marketing, Schulich School of Business; (missing) Rick McCutheon, President, FullContactSelling (April 27, 2009).

Acquiring Minds » marketing quota

Should marketing be compensated like sales?