A behind the scenes look at inbound leads with Eric Stockton

Speaker 1:

Welcome to the Agency Management Institute community, where you’ll learn how to grow and scale your business, attract and retain the best talent, make more money and keep more of what you make. The Build A Better Agency podcast presented by White Label IQ is packed with insights on how small to mid-size agencies survive and thrive in today’s market.

Bringing his 25 plus years of experience as both an agency owner and agency consultant, please welcome your host, Drew McLellan.

Drew McLellan:

Hey, everybody. Drew McLellan here from Agency Management Institute. Thank you for coming back and listening to another episode of Build A Better Agency. I love spending time with you every week. I’m grateful that you listen. I’m grateful for your feedback. I am really grateful that a lot of you tell me that you find the content actually actionable and useful, and that it feels like we’re talking right to you. I can’t even tell you how happy that makes me. It makes me feel like all of the effort is worthwhile and we’re getting it right. So thank you for that. And by the way, if we ever don’t get it right, I’d love to hear that too. Be gentle with me, but I do want to hear it. I want to know that we’re really delivering great value for you.

So before I tell you about this week’s guest, and what I know is going to be a lively conversation, let me just remind you that the Build A Better Agency Summit is coming up May 24th and 25th. I’m not going to belabor the point. You’ve heard me talk about it before, but I will tell you that it’s shaping up to be an amazing conference. We have so many topics we’re covering. If there’s something you’re worried about, if there’s something you’re not sure how to do, I guarantee you, we have a subject matter expert in-house at the conference, ready to talk to you at either a round table or a breakout session, or a keynote. We’re going to talk about innovation. We’re going to talk about biz dev. We’re going to talk succession planning. We’re going to talk about imposter syndrome. We’re going to talk about how to leverage using VAs to build your business. We’re going to talk about HR issues, hiring and how to attract and retain talent.

We’re going to talk about the whole work from home phenomenon, where that’s going. We are going to talk about podcasting and other tools that you can use. We’re going to talk about thought leadership. We are going to talk about math, taxes, cashflow. I swear to you, I cannot think of one topic that matters to you that we are not going to cover. So please head over to the agencymanagementinstitute.com website, grab your ticket now, before they go up in price again, and join us. We have 50 or so tickets left and then we’re going to be sold out.

And so what breaks my heart is when people say, “Oh, I really want to go,” or I get the email that says, “Hey, is there any way you can squeeze me in?” And based on the rules of the hotel and fire marshals, and all that sort of thing, we just have no wiggle room. So please don’t wait until the last minute. Please grab your ticket now and join us because it is going to be spectacular. I just am so excited. We’re going to talk about the legacy of why you own an agency and the legacy you can leave in your community and your family because you own an agency, and how to do that. I’m so excited about the content and the incredible people who are coming to share their wisdom with you.

And by the way, you’re all going to be sharing your wisdom with each other too. That’s what I love about the AMI community, is it’s not just about somebody standing on a stage. It’s about the conversations you have over breakfast and lunch and during the breaks, and all of that. So come ready to meet a bunch of very cool agency owners and leaders. Come ready to show up as a student, but also as a teacher, and come ready to be inspired and fired up, and leave super excited about the fact that you own the joint or you work at an agency that invests in you. We’re going to be there to deliver all of that, I promise.

All right, let me tell you a little bit about my guest. So Eric Stockton has been… he’s worked in agencies, he has been a business owner, but for the last several years, he has been a high ranking official, if you will, at SharpSpring. And as many of you know, Constant Contact has now bought SharpSpring, and he’s on the team that is sort of trying to figure out what that looks like for both companies and for their customers.

So while that would be fascinating to talk about, that’s not actually what I want to talk to him about. What I want to talk to him about is the trends that he’s seeing, because he can see the big backend and he can see what all the agencies are doing with the tool. And we’re not going to talk about SharpSpring particularly, but we’re going to talk about the trends of inbound marketing and how people are using CRMs and the mistakes that we’re making. And I feel like this conversation could go in 8,000,000 directions. And quite honestly, I’m making you no promises about what direction that we’re going to go, but I do know it’s going to be interesting. So let’s get to the conversation. I have a ton of questions to ask him, and it feels like this is going to be a kind of peak behind the curtain conversation, that he’s seeing things and he’s watching trends that we don’t know about, and I want to make sure that we get to those. All right, let’s do it.

Eric, welcome to the podcast. Thanks for joining us.

Eric Stockton:

Yeah. Well, thanks for having me, Drew.

Drew McLellan:

So give everybody a little bit of background on you and how you came to be where you’re at today?

Eric Stockton:

Oh, man. I don’t know how far you want me to go back, but I’ll just start-

Drew McLellan:

Not like childhood, maybe. [crosstalk 00:05:46].

Eric Stockton:

Yeah. I’ll start with SharpSpring about that.

Drew McLellan:

Okay.

Eric Stockton:

So in my past life, I ran a group called Marketing Sherpa, which was a marketing research firm that worked with lots of different agencies as well as clients, and I had just a crash course and getting to be involved and learning from some of the best marketers out there. And so after that, I ended up doing a few different projects, including some private equity work. And then also some agency work and really sort of parlayed that into about two-and-a-half years ago, working with SharpSpring, there was an acquisition that was happening, Perfect Audience. I don’t know if you remember that.

Drew McLellan:

Yep.

Eric Stockton:

And so I was part of that acquisition process. I helped do just the due diligence and that sort of thing for it. They needed somebody to run that piece of the business and that’s how I got into SharpSpring, and five months ago we were required by Constant Contact. So now we’re off to the races doing a lot of different things for the new Constant Contact brand.

Drew McLellan:

Yeah. I think a lot of people have been sort of watching all of that with interest to see how that was all going to shake out.

Eric Stockton:

Yeah.

Drew McLellan:

How blended the two companies and the products were going to be together, and so I know there’s still more of that to come, so I’m sure it’s an interesting time to be there.

Eric Stockton:

Yeah, it is. Tuesday of last week, we were in a pretty big meeting with product and dev and just sort of, what does the roadmap look like as SharpSpring for agencies? And then also, what does it look like in an integration with the larger Constant Contact base? Because the thing that they want, Constant Contact wants is the ability to take a lot of the things that we’re doing that make SharpSpring great, and port that into their capabilities on their side.

So they’re excited about it and we’ve got a lot of work to do, so it’ll be a lot.

Drew McLellan:

Yes. [crosstalk 00:07:51].

Eric Stockton:

But I think it’s off to a good start.

Drew McLellan:

So one of the things I know that you’ve been involved in on the SharpSpring side, and I suspect what we’re going to talk about while your lens is SharpSpring, it’s probably true happening in all of the CRMs and you guys work with so many agencies. And so I’m wondering what you’re seeing in terms of what’s happening that’s a little different right now? How are things shifting? And you and I were talking before we hit the record button, this isn’t really a COVID shift. It’s just a marketing shift.

Eric Stockton:

Yeah.

Drew McLellan:

You were talking about sort of the different less outbound, more inbound and that that’s causing some problems. So talk about that a little bit?

Eric Stockton:

Yeah. So I think at the end of the day, a lot of companies have come to the realization that you can’t just keep doing it the same way.

Drew McLellan:

Right.

Eric Stockton:

And it’s funny, I was talking to… it’s a large company that’s… they do primarily… well, it’s actually a 100% outbound motion where they have about a 100, 120 BDRs, SDRs, and they’ve got some more than 30 or so AEs and that’s their entire go-to market. They land about 20 or 30 customers a month and they are making that change. They’re making that shift to more of a hand raiser, better buying experience inbound motion, and it is a massive organizational shift. [crosstalk 00:09:24].

It absolutely is and I think a lot of the agencies are in that… I talk to a lot of agencies every day. They’re on our podcast. They’re in various places where we’re just talking to customers. And one of the things that we constantly are seeing as they’re talking is we have to communicate what’s going to happen sort of in the… if you play the tape all the way to the end, Mr. CEO, if you play the tape all the way to the end Mr CFO, here’s what you should see happen, here are the milestones. Here’s what needs to happen and it freaks a lot of sales leaders out, right? If you don’t handle that process correctly and you don’t do sort of the due diligence and then the pre-communication ahead of time-

Drew McLellan:

And setting those expectations.

Eric Stockton:

And setting the expectations and going through that process, and building trust, showing, “Okay, here’s what’s going to happen. MQLs are going to drop. And what we define as an MQL is going to change and what SQLs aren’t going to drop necessarily, but here’s what’s going to end up happening,” and you start building credibility at each one of those sort of checkpoints or milestones until you get to the point where the pipeline is continuing to accelerate and things are shifted.

And typically, what I see is around… let’s call it 50/50, right? So 15% sales team goes out and hunts and gets. The other 50% is contributed by sales… Sorry, by marketing in an inbound motion like that. And I think that’s the big change that I’ve been seeing across not only small businesses, but also the agencies that support them, and it’s a pretty massive change.

Drew McLellan:

And as you’re coaching clients in terms of how to have those conversations, what’s the data points? What are the, “Look, you used to get this, and now you’re going to get this, or this used to take this long, and now it’s going to take this long?” Because obviously, you guys have massive amounts of data as you’re watching how all the customers are responding to inbound versus outbound and all that. So what should an agency be saying to their clients in terms of, “Hey, here’s what to expect?”

Eric Stockton:

Yeah. I think it’s a great question, and my job is a ton of fun because I get to sit behind the scenes and I get to look and watch sort of what’s happening at a macro level across lots of different agency campaigns, lots of different SMB campaigns. And if you’re a data nerd, it’s a lot of fun just to be able to see and slice and dice some of this stuff. But I think the core metrics that you ought to be looking for, that you ought to be laying out with your client as a series of milestones are going to be what is your definition of an MQL? What is a true hand raiser?

And typically, that’s defined as somebody who’s coming in of their own volition, coming to your website, raising their hand and asking for a demo or starting a PQL or something, or a free trial even, in some cases.

Drew McLellan:

Right.

Eric Stockton:

And typically, what you see is the stuff that you’re shifting away from that you’re feeding the beast with, is going to be things like content syndication or other types of lower quality kind of content, or lower kind of leads.

Drew McLellan:

Right.

Eric Stockton:

They are really leads that aren’t high intent hand raisers. You sort of filter those out and what you end up with is sort of the cream of the crop opportunities. And if you do the work ahead of time, like we were talking about earlier, and you communicate what those high quality MQLs are, you define them clearly. And then you track based on your new baseline-

Drew McLellan:

Yeah.

Eric Stockton:

Of what’s actually going to an opportunity and what’s actually moving through the pipeline and what’s actually closing, you actually don’t see a drop off, right?

Drew McLellan:

Interesting.

Eric Stockton:

And the way that I typically describe it… What’s that?

Drew McLellan:

I said that’s interesting because it feels like a drop, right?

Eric Stockton:

It feels like a drop and I think in the absence of data, that’s exactly what happens is everybody goes off of what it feels like.

Drew McLellan:

Mm-hmm (affirmative).

Eric Stockton:

And look, I love sales leaders, but that’s exactly what they typically are going to go off of-

Drew McLellan:

Yep.

Eric Stockton:

Is, “Hey, it looks like this is dropping. I don’t know what’s happening. It feels scary to me,” they’ll never use that word, but that’s what they’re thinking. So what you focus on is the stuff that’s sort of your North Star metrics, right? So SQLs, SQOs, whatever you define it as, and what’s actually going to closed one that’s in the pipeline. And the way that I typically do it is I will look at it or will look at it with an agency or a client, and their client look at it and we’ll say, “Okay, look…” If you start separating the wheat from the chaff and you say, “In your CRM, if you work your way backwards from a closed one deal, or more often, it’s like a DA, like a demo attend or some kind of SQL, if you work your way backwards from that, and you say this is the band of MQLs that are actually generating these SQLs, and this is all we’re going to track and all we’re going to care about, we’re going to cut out all of this stuff up here-”

Drew McLellan:

Yeah.

Eric Stockton:

“And we’re going to double down on these things that are actually generating these MQLs, that go to an SQL,” then it becomes less scary because you’re doing the work ahead of time. And Drew, you know this, as you talk with folks all the time, I think half agency’s job is actually doing the work. The other half is just communicating.

Drew McLellan:

Coaching.

Eric Stockton:

Yes, absolutely. And leading people along the process because you’ve been doing it over and over, and over again. And you can do that with confidence because that’s what they need, is they depend on the confidence that you’re bringing to the table that you know what you’re doing.

Drew McLellan:

Yeah.

Eric Stockton:

So I would look at that, and I also look at actual pipeline velocity. So what’s actually happening once it hits an SQL stage to a closed one? How fast are they moving through? And what’s the pipeline value and the pipeline velocity? When you can show that and you’ve sort of bought yourself enough goodwill that the sales team believes in what you’re doing because they’re getting better MQLs, they’re getting better at bats when they’re on the phone and they know that the stuff that you’re sending them is not crap, then they start believing a little bit. And when they become believers, that’s when you start getting a lot of momentum.

Drew McLellan:

I think one of the challenges is in essence, you’re talking about going from a volume business to a specialty business. And so if a sales team or a C-suite is used to volume metrics-

Eric Stockton:

Yeah.

Drew McLellan:

And they know they’re going to get 2% or 3% of this big volume, the minute they see the volume shrink, they’re still calculating the 2% or 3%, especially in the beginning when they don’t really understand the difference. And so, one of the things that we talk about a lot is the whole idea of, by the time someone raises their hand when you’re doing inbound and you’re driving from this position of authority, or however you want to talk about it-

Eric Stockton:

Yep.

Drew McLellan:

By the time they raise their hand, they’ve sort of already decided, the sales cycle at that point is so much shorter.

Eric Stockton:

Yeah.

Drew McLellan:

Because they’re so much further along in their buying decision, but it’s invisible to you until that moment.

Eric Stockton:

Yep.

Drew McLellan:

Right?

Eric Stockton:

Yep. So it’s interesting to me that you said that, because I think I’ve implemented this type of motion before, and one of the things that typically happens that is really scary for sales leaders is, again, they have that number, like you said. It’s like they’ve got it crystal clear in their head. They’re thinking about the waterfall and what it’s going to look like in month versus pipeline? And how long does it take to close for pipeline? And those are all very real numbers until you have to level set.

And so, one of the things they that we do in SharpSpring is we actually show how that works, and we show like, “Here’s your new baseline because these are the ones that we’ve in the CRM pulled out and shown which ones are actually converting to an actual deal,” showing that 70% of the stuff that they were generating before that they were working as a sales team is no longer relevant. So you’re just focusing on the report that shows the 30% that you care about.

So I do that. And then the other thing that we do is we actually do… I call them lead retros, that’s basically what they are. So we go in and we look at the leads that the sales team has had over the last week. We make it real fresh because you can’t wait too long, sales leaders aren’t going to do that. So you come in, you look at, in an interview process, how are you seeing the leads, or are they in your ICP? What do they feel like to you? How are they looking in the pipeline? And you make sure that the sales leader is a part of that conversation because they need to hear it because most of the time they’re removed from it.

They need to hear that the reps on the floor are actually seeing the same things that you know are going to happen, which is that better quality MQL.

Drew McLellan:

Yeah. It’s that quality versus quantity issue, and I think if you’re new to it and you’ve lived off of the quantity side of it, it can be really frightening.

Eric Stockton:

Yeah.

Drew McLellan:

And I think the other part of it that makes it frightening, I’m curious about sort of your perspective on this, is I think it’s more work on the front-end to be a thought leader, an authority to put out content that’s actually valuable as opposed to just the same Pantone, pick the new color article that everybody else writes about. That’s meaningless.

Eric Stockton:

Yeah.

Drew McLellan:

And so I think a lot of people look at it and they go, “Can we sustain this effort long enough to make the flip from quantity to quality?”

Eric Stockton:

Yeah.

Drew McLellan:

And even if we enjoy some early success with quality, what happens if we stop writing the blog or the e-book, or the podcast or the thing? [crosstalk 00:20:19] So are you seeing people’s anxiety around that?

Eric Stockton:

Yeah.

Drew McLellan:

Not just around the shift from quantity to quality, but can we maintain the quality game?

Eric Stockton:

Yeah. So most of us don’t have the luxury of being able to do both, right?

Drew McLellan:

Right.

Eric Stockton:

So we don’t have the budget, we don’t have the luxury to be able to do that. So you have to find those obvious things that are absolutely worthless that are not contributing to a deal, or at the very least in SQL. And that’s what I was saying earlier, is like… so in our CRM, what we’ll do is we’ll look at those different striations, different channels that are yielding very low to no quality, right?

Drew McLellan:

Yeah.

Eric Stockton:

We cut that out and we show that to the… what I call the non-marketing executives in the room, right? These are the people that don’t believe the way that you and I necessarily believe, or they’ve been through it before like we have. And so you go through that intro process with a non-marketing executive and you say, “Look, this is your CRM and if we reverse engineered everything back to the original campaign source, what’s working, what’s not working?” And it’s very clear there’s stuff that’s not working, and it’s very clear that there are quick wins, and it’s very clear that there’s budget that’s not being allocated as well as it could be.

Drew McLellan:

Right.

Eric Stockton:

And there’s a better use of spend for that. So you’re not adding dollars, which everybody appreciates. You get some more credibility built up when you don’t go to somebody and ask for more budget. What you’re saying instead is here are all the things you’re adding to an SQL pipeline. Here are the things that are not. We’re going to stop doing these things and we’re going to double down on these things, and the quantity part of it, as long as you’re level setting, isn’t going to drop on the SQL side. It’s only going to drop on the vanity MQL stuff.

So if you can articulate that well and you can get buy-in, then it becomes a lot easier because you’re just basing it on that SQL number. And at the end of the day, it’s not super hard to get… well, you have to have two things. One is you have to believe in it, right?

Drew McLellan:

Right.

Eric Stockton:

As the marketer, as the agency. And assuming that that happens, then you just are going to point to the thing that everybody wants to care about, which is the connection point.

Drew McLellan:

Yeah.

Eric Stockton:

Which is really opportunity or SQL. If you say, “I’m not going to worry about MQLs anymore, nobody’s going to care about that, not necessarily. As long as you’re saying, “I’m going to keep the number of SQLs as good or better than they are right now, I’m going to give you as many at bats or better as a sales team and that’s going to improve over time,” again, it’s all predicated on whether or not you as the marketer have faith that this is going to work. And of course, it helps when you’ve done it a few times.

But ultimately, when you started that SQL point, everybody sort of sets back in their chair a little bit and relaxes a little bit because they understand the SQL. They understand that that’s what they need, and frankly, anybody who’s sitting at the executive table, they don’t care about most of the marketing metrics that are out there anyway. They only care about pipeline revenue. And so if you say, as a marketer or an agency, “I’m interested only in pipeline and revenue and I want to get alignment there and I’m going to create campaigns that generate more pipeline of the kind you want and revenue,” then all of a sudden, their ears perk up a little bit.

Drew McLellan:

Yeah. But I think part of it too, is that it’s also not just the belief that we can sustain this. I think you have to have some proof points, right?

Eric Stockton:

Yeah.

Drew McLellan:

I think have to be able to reassure people who’ve done it the other way for so long that you’ve got a plan.

Eric Stockton:

Yeah.

Drew McLellan:

And that the plan’s going to work and that here’s how you’re going to do it, and that it’s a manageable plan.

Eric Stockton:

Yeah. I think that’s right. Further upstream, that is doable, right? You see the quality improvement happen. Again, you have to be able to separate the difference between the MQLs and SQLs that are in the campaigns that are actually generating revenue. And if you’re just looking at that particular band or striation, you can track that all the way back in your CRM, into your marketing automation system, into something as far up as unique visitors to your demo request page, to a demo request conversion rate, right?

Drew McLellan:

Right.

Eric Stockton:

You can track all the way back up to those leading indicators and you can track those every single day. Right? Those are metrics that feed your pipeline, and as long as you know what each one of those stages are, and you’ve got, for lack of a better word, a unified database with marketing automation and your CRM talking to each other and playing nicely together, that ends up being something that you can do as you communicate all the way downstream to a closed one deal.

Drew McLellan:

Well, and I think the other thing agencies sometimes forget, because they talk to their clients, their point of contact on the client side, who probably gets all of this.

Eric Stockton:

Yeah.

Drew McLellan:

Right? But their boss or their C-suite, or their whatever [crosstalk 00:26:02]. And one of the places where I think… and I’m curious about your thoughts about it. One of the places I think we drop the ball sometimes is that we don’t arm our clients with the data to make the case internally, to keep people off their back.

Eric Stockton:

Yep.

Drew McLellan:

And when people are pressuring them to go back to the old way or freaking out about the numbers, and our client can’t really… they get it, but they don’t have data to prove it. They can’t articulate in numbers and charts sort of way.

Eric Stockton:

A 100%.

Drew McLellan:

What’s happening and why it’s happening, they lose credibility and footing.

Eric Stockton:

A 100%.

Drew McLellan:

And that’s when budget starts getting pulled.

Eric Stockton:

Yep.

Drew McLellan:

And it’s sort of like one of those things where you plant the bulb and then the next day it hasn’t broken ground. So you dig it up and you move it somewhere else. And then the agency is forced to keep reacting prematurely and it never takes rut.

Eric Stockton:

Yeah. I love the way that you described that because that’s exactly what happens in organizations if you don’t have that deep seated understanding of how it should work, right?

Drew McLellan:

Yeah. Right.

Eric Stockton:

And you’re absolutely right. If you cannot, as a marketer, go into a room with the CFO and sit at the table and articulate what the case is and how you’re going to get there, and what the metrics are that you’re going to measure against, and show over time how you’re meeting each one of those milestones, you are going to lose credibility and you are going to fail, and you might as well not start down that path to begin with.

Drew McLellan:

Right.

Eric Stockton:

Because it’s going to end up in a resume changing event. And so really, what you want is something like… especially, this is where we as agencies, you guys really have the power to help set the table and build the credibility, and be that resource for the marketer because most marketers aren’t able to… in my experience, most marketers are not able to go into that room.

Drew McLellan:

Right.

Eric Stockton:

They can’t do it. And they need to depend on their partner in the conversation their partner more often than not has seen the playbook and watches through it and can articulate it.

Drew McLellan:

Yeah. Yeah.

Eric Stockton:

And I think when you come in, and I’ve seen this a lot where that’s what happens, is the agency and the client will go in together, the marketer as the point of contact the client, will go into the room together and tag team it. And sometimes they’ll prescript it and there’ll be some tag teaming that happens. But ultimately, the outcome that you want is, “Look, we want to divorce ourselves from the stuff that you don’t care about anyway, Mr. CMO… Or sorry, CFO.”

What you want is, “Do you agree?” You get them to start going into these micro yes conversations where they start nodding their head and saying, “Yes. Yeah. I only want to see pipeline. I don’t care about this other stuff. Couldn’t care less about open rates or social engagement.” What I care about is are we going to get the number of deals that we need and the MRR that we need for this month?

Drew McLellan:

Right.

Eric Stockton:

And so, if you start talking in that language and you start using the CFO’s words back at them, then they start nodding their head along with you.

Drew McLellan:

Yeah.

Eric Stockton:

And that’s when you start laying out the plan.

Drew McLellan:

Yeah. But we’re going to take a break and we’ll pick it up. Here’s the problem, most clients will never say to their agency, “I don’t understand this stuff.”

So if you aren’t intuitive enough and you aren’t proactive enough to serve it up to them, they’re going to walk into a conference room and throw you under the bus by accident. So let’s take a break here and then we’ll talk about how to combat that when we come back.

Hey, everybody, I promised I wouldn’t keep you more than a minute, but I want to make sure you know that at AMI, one of the things that we offer are virtual peer groups. So think of it as a Vistage group or an EO group, only everybody around the table, figuratively in this case, is an agency owner. So you have to be an agency owner to belong. The virtual peer groups meet every month for 90 minutes on Zoom. This was not a COVID creation, it was pre-COVID. You see the same people in your cohort every time. So you get to create relationships with them. And it is facilitated by AMI staffer, Craig Barnes, who has owned his own agency for 25 or 30 years. So plenty of great experience, both from Craig, but also learning from each other. So if you have any interest in learning more about how that works, head over to the AMI website and under memberships, you will find the virtual peer group and you can get all the information there. All right? Okay. Let’s get back to the show.

All right. We’re back and we’re talking about sort of this shift from outbound to inbound that Eric is seeing when they look at the backend of SharpSpring CRM. And certainly, you guys know that I’ve been talking about this for a long time, that this is coming, and it’s all part of being an authority and all other things, but there’s sort of a snake in the grass that doesn’t mean to be a snake in the grass, which is our clients, especially if they come from a marketing background and not a sales background, often don’t know how to translate the language in a way that relieves the stress and pressure, and worry of either the C-suite or the sales folks who are used to a volume business, who are used to, “Look, we’ve got to get 10,000 Xs to get 1,000 Ys, to get three Zs.” That’s the math they’re used to doing this ginormous number on the frontend because most of the leads aren’t qualified.

And the whole point of marketing today is about attracting right fit clients earlier in the process and actually repelling all of the wrong fits, which has completely shifted the way we are talking to clients and the way we’re helping clients. But as I was saying before the break, one of my worries is that we don’t do a great job of arming our marketing client, that our point of contact inside the client to argue about why the shift is good, and basically keep people from freaking out.

Eric Stockton:

Yeah.

Drew McLellan:

So are there things that agencies should be doing, reports they should be preparing, webinars they should be holding? How have you seen agencies successfully help their clients make this shift without freaking out?

Eric Stockton:

Yeah. So I think that you start doing the groundwork pretty early on in the engagement. They may have brought you in for a specific reason that’s probably nothing to do with what we’ve been talking about.

Drew McLellan:

Yeah.

Eric Stockton:

Especially if that marketer, that point of contact marketing leader has been in that position for a long time, they’re sort of grounded and they’re rooted in that specific way of doing things.

Drew McLellan:

Mm-hmm (affirmative).

Eric Stockton:

But if you are an agency and you know that this is the right thing for the business, doing some of the basic conversation starter work, which is not super hard when you really think about it.

Drew McLellan:

Yeah.

Eric Stockton:

It’s creating some reports that are specifically around what’s happening with your outbound motion, what’s the CAC? What is happening with an LTV to CAC ratio? How does that compare to an inbound motion with a high-intent hand raiser and how are they converting to a demo attend and the pipeline, and how fast are they moving through the pipeline to a closed one deal? All of those key metrics.

Drew McLellan:

Mm-hmm (affirmative)

Eric Stockton:

And when you start laying it out that way in a… sort of bifurcating it down the middle, where you start looking at inbound, outbound separately, and you look at an LTV to CAC by both… you look at the conversion rate from [crosstalk 00:34:17].

Drew McLellan:

Wait. Stop. Stop, stop. Define those acronyms?

Eric Stockton:

LTV to CAC? So yeah. Lifetime value-

Drew McLellan:

Right.

Eric Stockton:

Right, for LTV. In other words, like over time, how much revenue do you get out of this particular customer? How much is that customer worth you? CAC is just customer acquisition cost, right?

Drew McLellan:

Okay.

Eric Stockton:

So this is going to be how much does it cost you to be able to acquire that customer and bring them in? And typically, what you want to see is a three-ish range, especially for SAS businesses. It’s going to vary based on industry, but especially in a SAS business, you’re going to want to see like a three or so LTV to CAC.

Drew McLellan:

Right.

Eric Stockton:

Which tells you that you’re in a relatively healthy state and I would actually argue that the other metric that you really care about is CAC payback, right? So it’s going to be of the cost that it costs you to acquire a customer, how long does it take? How many months does it take to pay that back in revenue?

So in that scenario, you’ve got a lot of really basic metrics that are not super hard to create, as long as you have a way to see your entire lead funnel holistically from the lead that you create, all the way through to a closed one deal. And if you see that unified across, it’s not that hard to see which ones.

Drew McLellan:

Right.

Eric Stockton:

Well, you’ve got to slice it two ways, right? You’ve got to slice it by inbound, outbound, and then you also need to slice it horizontally to be able to see, of the leads that you’re creating of the inbound leads, which ones are actually converting? And same thing on the outbound side, of the leads that you’re creating, which ones are actually closing? And if you do that work, again, not super difficult to do, but if you do that work, you will actually find that there are really big pockets of opportunity that are just wasted spend, and you can go to your clients and that’s a value add that you’re bringing to the table.

Drew McLellan:

Right. Now you’re the hero.

Eric Stockton:

Yeah. You’re absolutely the hero and it only takes you a couple of hours. This is not a three-day project. This is like a couple of hours, as long as you’ve got something that has all that data in it, and most things do. Obviously, we do that, but there’s other solutions are out there that do the same thing, that they’ll give you know… you might have to patch it together or stitch it together, but ultimately, you can get there.

Drew McLellan:

Yeah. Well, and again, once you build the report, now you’re just porting new data in. And imagine if you are point of contact that the client can walk into the C-suite or into a conference room and say, “Actually, now that we’re doing it this new way, we are actually going to be able to spend less money, or we’re going to stop spending money over here, because guess what? It’s just not converting, but now look at what we’re doing. And so here’s why we’re shifting budget dollars from this activity to say content creation or whatever it is.”

So now they have data points that allow them to justify their recommendations. And as you’re saying, for the CFO and even the sales people, and certainly the CEO, it’s going to be, “Look, I’m focusing on the end result, which is sales, and that monthly recurring revenue or whatever our sales model is.” And the rest of it is just kind of vanity numbers.

Eric Stockton:

Yeah. You know what’s funny is whenever I pitched this back in the day when I was an agency, or even today when I look at people who come and ask questions to us, I don’t usually talk a whole lot. If I’m talking, it’s always about who’s your audience? Right?

Drew McLellan:

Right, right.

Eric Stockton:

So whoever’s in the room, but if I’m talking to the marketer, yes, we talk about content a lot. But if I’m in the room and I’m talking to a non-marketing executive, you’ll never hear me talk about content.

Drew McLellan:

Right.

Eric Stockton:

Not really. I’m talking about pipeline and revenue. I’m talking about LTV and I’m talking about CAC, and I’m talking about metrics that the business… I’m talking about business outcomes.

Drew McLellan:

Right.

Eric Stockton:

I’m not talking about the stuff that… because at the end of the day, they don’t care. What they care about is how are you going to generate these SQLs? And do I have a high enough degree of confidence in your ability to go and execute? And honestly, if I was an agency, that’s the same thing, the same exact thing I would have. I would still have the content play in my back pocket, in the unlikely event that somebody asks me that, but in general, they just want to know, what’s the media spend, program spend going in? How many SQLs are going to come out and what’s that going to look like [crosstalk 00:39:16]?

Drew McLellan:

I’m going to give you X dollars. How many dollars do I get back?

Eric Stockton:

Yeah, that’s right.

Drew McLellan:

Yeah. Well, and I think this is one of the challenges for agencies because so many AEs focus on the marketing tactics and they don’t understand the business tactics, right?

Eric Stockton:

Yeah.

Drew McLellan:

And so now you’ve got a marketer who may or may not understand. They understand marketing stuff, but they may not understand the business side, and you have an AE who is trained to think about marketing tactics and strategies, but especially if they’re new in the business, they don’t really understand how to talk about things. Like in one of our AE bootcamps, we teach how to factor lifetime value of a customer, and a lot of them have never seen that app before. They don’t understand it, right?

Eric Stockton:

[crosstalk 00:40:03] Yeah.

Drew McLellan:

So now you have two people who don’t have the business speak that they need to have and the business understanding.

Eric Stockton:

Yeah.

Drew McLellan:

And they’re preparing this poor lamb to walk into the slaughter that is the C-suite, and they’re going to talk about marketing tactics, as opposed to, as you’re pointing out, “Look, this is about leads. This is about shortening the sales cycle. This is about recurring revenue from the existing client, which adds to lifetime value.” If we don’t talk about all of that, then I think that’s where we can lose somebody in a hurry.

Eric Stockton:

Yeah. When you’re talking to an executive, you’re always communicating top down.

Drew McLellan:

Right.

Eric Stockton:

You start down to too far into the weeds, and my suggestion to anybody who’s an agency is you can never start too far at the top.

Drew McLellan:

Right.

Eric Stockton:

Right? You can’t screw that up, right? You can always just really, really high level, this is what we’re doing today, this is what we said we were going to do. Level set because that executive doesn’t know… they don’t care about what your campaign was that you talked about at length on the last quarter. They don’t remember, as soon as they walk out of the room, they’re not going to remember.

Drew McLellan:

Right.

Eric Stockton:

So it’s really the high level, level set and then top down from business outcomes, and then you connect that to the marketing initiatives.

Drew McLellan:

Well, and again, I think this is about we have access to all of this data.

Eric Stockton:

Yeah.

Drew McLellan:

On the backend of any system, to your point, whether SharpSpring or somebody else, we just aren’t sure to what to do with it.

Eric Stockton:

Yeah.

Drew McLellan:

And we’ve got to get better at taking the data and translating it for the clients because a lot of times I think we serve up data and we assume that they understand. And like I said right before the break, they’re not going to admit they don’t understand.

Eric Stockton:

Sure.

Drew McLellan:

But then they don’t know how to use it to protect their job and our client relationship.

Eric Stockton:

Yep. Yeah. Again, I think half the job is just, as everybody listening knows, is dealing with expectations and personalities, and just working through the organizational challenges and pushback in natural sort of entropy that happens. Yep.

Drew McLellan:

Yeah. I think it’s a really interesting time for agencies, that we have to be even more educators than we were before and I think we have to take… one of the things that I’ve always… when I think about my own agency or I think about my own career, or I think about other agency people that I’m like, “Wow, they’re really good,” one of their gifts is they take things that are complicated and make them really simple.

And I think when it comes to data, that’s something that we still have to work on, is we have all of these data points and all of this stuff, but we haven’t quite figured out how to simplify it down to the things that matter most to the client and then how to educate them, frankly, about why that matters to them.

Eric Stockton:

Yeah. I love that because I think that’s exactly right. There are marketers, there are agency owners or AEs that really know how to articulate what’s going on and pull out what’s going on in the mind of a non-marketing executive.

Drew McLellan:

Yeah.

Eric Stockton:

And they know how to talk because in my experience, the best AEs used to be business owners of some sort. They know what the pain is of a business owner. They know how that owner thinks. They know how to talk the talk and they know how to communicate. Those are the best AEs because they’ve just been through the pain before and they can feel it, and they can have empathy for it, but also because they can speak it.

And I think sort of being on the other side of the fence, I’ve been a business owner and I’ve done small private equity where I’ve owned some companies in a portfolio, and that was always the thing that frustrated me, was I would have an agency, they would come to me and they would try to sell me on something. And I knew they knew what they were talking about, but they could never connect the dots for me.

Drew McLellan:

Yeah.

Eric Stockton:

And there was a credibility problem. Whether I knew it consciously or not, there was a credibility issue or gap. And then the ones that knew how to articulate it and knew what I was thinking and they could talk to me in terms of business outcomes, that’s usually the one that won the deal, which I think is something that we can all learn from.

Drew McLellan:

Yeah. I think you’re right. I think at the end of the day, as marketing gets more data driven, we have to be more business focused because the data are proof points for the business outcomes, much less so for the marketing outcomes.

Eric Stockton:

And storytellers, right?

Drew McLellan:

Yeah. Right.

Eric Stockton:

We need to know how to tell the story.

Drew McLellan:

Yeah.

Eric Stockton:

We need to know how to articulate the story, and we do. We love getting into the weeds on the data, and I think I did