Why SDRs are at odds with Lead Scores

I don’t think I’m giving away any trade secrets by revealing that SDRs aren’t always the biggest fans of lead scores. Whether implementing a lead score built internally or a solution like MadKudu, SDRs are in the precarious position of being the primary users and having very little influence over the score itself.

SDRs carry a lot of intuition of what makes a lead good or bad. They aren’t surprised when a lead they perceive as good/bad is rated as such. And yet, they are viscerally frustrated when a lead they perceive as ‘bad’ is rated otherwise, and vice versa. Even if the lead score is scoring leads perfect, an SDR’s core metric – the number of demo’s booked – is often undermined by the lead score.

Lead scores are meant to filter out bad leads while surfacing lead with the highest probability to convert to customer. A poor-performing lead score might surface leads that are likely to get a phone call, but not likely to convert. These care called NiNas (No Intent. No Authority), and they are like grease in your funnel – they look like they should go down smooth, and then they dry up halfway down the funnel, slowing down everything else that should pass through easily.

NiNa’s are great for an SDR’s quota, and while we know that NiNa’s aren’t good for the overall business, this means that a good lead score is removing one of the easiest ways for an SDR to make quota.

Lead Scores should serve SDRS

While not exactly a black box, Lead Scores have historically operated as such for SDRs. Their purpose is to help SDRs prioritize the highest-value leads, which should be great for helping them hit their quota; however, without knowing why a lead is good, lead scores provide little more than expectations for how the engagement should go.

At the same time, Lead Scores are calculated by measuring a lot of valuable information, most of which is not visible to the SDR. Beyond job title and employee count, lead scores evaluate the predicted revenue of each company, the size of specific teams, the tech stack & tools that a company uses, whether their solution is B2B or B2C, whether it has a free trial or not, whether they’ve raised venture capital, and much more. There can be thousands of signals that are weighed initially in order to figure out which ones are the best determiners of success, against which every lead will be measured.

MadKudu Signals sitting inside Salesforce
Sample MadKudu Signals sitting inside Salesforce

In the above example, we can see how valuable it is to know that the lead is performing 150K daily API calls, or that their company has multiple active users on the account , or that they are using Salesforce: these are indicators of the buyer persona, the use case, and therefore of the right message for the SDR to send.

For SDRs, these signals are context. Context for why a lead is a good lead, and that’s exactly how a Lead Score and serve an SDR. Constructing the right message, understanding where your lead is coming from, identifying what the tipping point is that made them sales-ready: SDRs and Lead Scores are trying to do the exact same thing.

With one customer, MadKudu was able to demonstrate a disproportionate ratio between Opportunities created and Opportunities won – another way to look at that is prospects that made it past an SDR vs. prospects that made it past an AE. What you can see above is that having ‘Manager’ or ‘Operations/HR’ in a prospects title negatively impacted their odds of getting through an SDR (or negatively impacted an SDR’s chances of getting them to an AE), while it greatly increased their chances of becoming a customer if they made it to an AE.

Knowing which kinds of titles are good for AE’s can help SDRs understand what to spend more time on, but it can also help SDR managers better train their SDRs on how to win with those personas.

Speaking with Francis on our weekly podcast, it was clear to me how important it is for SDRs to buy in to a Lead Score. If you’re in charge of implementing a lead score, you need to bring SDRs into the conversation early to understand how the lead score can serve them. Making a lead score actionable for SDRs means that your front line for feedback on how well your score is performing will be more incentivized to work with the score instead of working against the score.

The biggest source of friction in the customer journey is you

Ten years ago Amazon introduced same-day delivery, probably the single most important feature in cementing their dominance of the eCommerce industry. They did this after 10 years of innovating on the online shopper experience – recommended purchases, one-click payments, experiments on how website latency affected conversion rates – and they understood that the biggest source of friction in their buyer experience was waiting for your package to arrive.

We all have an idea in our head about what makes a great customer journey, a great buyer experience. When Francis asked me out of the blue, the first thing that came to mind was my experience buying an engagement ring last year, but I could just as easily point to the experience of creating a new Slack team. They are magical experiences. You never see what’s going on behind the curtain, and you never have any downtime to think about it. Is my package already in Paris? How did Amazon know what I was going to order? Doesn’t matter. It’s already arrived before I can begin to comprehend how they possibly do that at scale.

For SaaS companies today, increasing revenue is often about removing friction. The product team designs and improves features so that customers don’t have time to wonder whether the competition is building a better product. Customer Success is looking at customer health metrics to identify customers before they even think about churning and improve their results.

Marketing & Sales have a plethora of data & engagement tools so that they know everything about who their engaging with from Clearbit-enhanced Drift Bots to segmented Outreach campaigns encouraging prospects to signup for Webinars or jump on a call.

You are the friction.

"You start building this vision of what you want the customer journey to be, but you don't realize how far removed you are from your customer."

So why is it that 90% of SaaS companies take more than five minutes to follow up on a request to schedule a demo? Francis suggests going through your own customer journey – ideally by signing up with a friend’s email account, especially if your friend is a great fit for your product – to get the full experience. If it’s not the ~48 hours of follow-up time that’ll make you feel the friction, it’s the ~5 days between the demo request and the phone call that’ll make you rethink your process.

What makes it take so long?

  • Lead data enhancement
  • Territories/routing rules
  • SDR first-response latency
  • Email back-and-forth to validate interest and find a time to talk.

It’s easy to understand each one of those steps – after all, everything above (accept maybe the emails) feel very logical – the only thing that’s missing in the equation is the customer experience. SaaS companies are eager to over-optimize for the sake of being fair, applying rigorous rules to lead assignment, and this often flies in the face of the customer journey.

One of MadKudu’s most popular features, the Fastlane – an enhancement to signup forms that allows highly-qualified leads to skip the form and go straight to a sales rep’s calendar – is often difficult to implement initially because lead routing takes minutes. The customer eats the friction because of operational friction.

Remove friction. Prioritize customers.

It’s easy to remove friction from the customer journey if you prioritize it. Calendly, for example, offers a great Team Scheduling feature that allows prospects to see an aggregate calendar for every potential representative and then choose a time that works for them, instead of displaying the representative’s calendar after they’ve been round-robined with less available time slots. This puts the customer in the priority seat and sacrifices the possibility that Rep’s who have less immediate availability in their calendar might get routed less leads. In fact, that’s not a bad forcing function for making sure SDRs are prioritizing their time correctly.

 

 

 

How we use Zapier to score Mailchimp subscribers

There’s no better way to get your story out there than to create engaging content with which your target audience identifies. At MadKudu, we love sharing data-driven insights and learnings from our experience working with Marketing Operations professionals, which has allowed us to take the value we strive to bring our customers every day and make it available to the marketing ops community as a whole.

As interest in our content has grown, it was only natural that we leverage Zapier in order to quickly understand who was signing up and whether we should take the relationship to the next level.

Zapier is a great way for SaaS companies like us to quickly build automated workflows around the tools we already use to make sure our customers have a frictionless relevant journey. We don’t want to push every Mailchimp subscriber to Salesforce, because not only would that create a heap of contacts that aren’t sales-ready, but we may end up inadvertently reaching out to contacts who don’t need MadKudu yet, giving them a negative first impression of us as a potential customer.

Today we are able to see who is signing up for our newsletter that sales should be paying attention to, and let’s see how:

Step 1: Scoring new newsletter subscribers

The first step is to make sure you grab all new subscribers. Zapier makes that super easy with their Mailchimp integration

Next we want to send those new subscribers to MadKudu to be analyzed. While MadKudu customers have a dedicated MadKudu integration, Zapier users who aren’t a MadKudu customer can also leverage Zapier’s native Lead Score app, which is (you guessed it) powered by MadKudu.

Step 2: Filter by Lead Score

We’ve got our MadKudu score already configured so after I feed my new subscriber to MadKudu, I’m going to run a quick filter to make sure we only do something if the Lead Score is “good” or “very good.”

If you’re worried that the bar will filter out potentially interesting leads, consider this a confidence test of your lead score.

Zapier Filtering by Lead Score Quality

Step 3: Take Action, Communicate!

For MailChimp signups that pass our Lead Score filter, we next leverage the SalesForce integration in Zapier to either find the existing contact inside Salesforce (they may already be there) or create a new lead. SalesForce has made this very easy to do with the “Find or Create Lead” action in Zapier.

Once we’ve communicated synced our Mailchimp lead to Salesforce, we use the Slack integration on Zapier to communicate everything we’ve created so far to a dedicated #notif-madkudu channel, which broadcasts all the quality leads coming from all of our lead generation channels.

Directly inside Slack, our team can get actionable insights:

  • The MadKudu score, represented as 3 Stars (normal stars for Good/ twinkling for Very Good)
  • The signals that MadKudu identified in this lead, both positive and negative
  • A link to the lead in Salesforce, for anyone who wants to take action/review

Actionable Lead Scoring applied to your Newsletter

Our goal here isn’t to reach out to newsletter subscribers – we want to build a long-term relationship with them, and we’re happy to keep delivering them quality content until their ready to talk about actionable lead scoring. What we’re able to do is see qualitatively & quantitatively the number of newsletter subscribers we have who are a good fit for MadKudu today.

This helps marketing & sales stay aligned on the same goal. Marketing is measuring newsletter growth with the same metric its using to measure SQL generation.

Segmenting Funnel Analysis by Customer Fit

Every week during our check-in, MadKudu Co-Founder & CRO Francis Brero & I talk about our current priorities. Our regular call also become an opportunity for Francis to download some knowledge from his time working with some of the top SaaS Sales & Marketing organizations – like applying lead scoring to funnel analysis. What started as an effort to onboard me with recordings & note-taking has turned into a series I call MadOps.

A lead score is the foundation for your marketing & sales alignment. It creates accountability for both teams and is the foundation of a strong Sales SLA. A foundation is only as useful as what you build on top of it, and that’s why we talk about Actionable Lead Scoring – leveraging your lead score to create a frictionless journey. Today we’re going to focus on how you can leverage your lead score in funnel analysis to see where your best leads are falling off.

Funnel Analysis & Actionable Intelligence

Understanding the customer journey’s inflection points and conversion rates is essential to scaling & maintaining success as a software company; however, the analysis you’re doing is just as important as the data you’re using to generate that analysis.

The goal of funnel analysis is to look at ways to remove friction from the customer journey, to improve activation & conversion, and to make sure that the users who should engage most with your product do. Accomplishing that goal without segmenting by lead score is like turning every lead into an opportunity in sales force and then trying to improve your deal won rate. You need to start with the right metric by answering the right question: what are my best leads doing and how can I make their journey better?

If you're not applying lead score to funnel analysis, you're making decisions based on flawed data.

Applying Lead Score to Funnel Analysis

Let’s imagine you want to look at the first 15 days of user activity in your self-service product, which corresponds to your 14-day free trial and immediate conversion. Of course, you already know that 50% of conversion on freemium occurs after the trial expires, but you’re looking to identify engagement drop-off before the trial even expires. After all, customers can’t convert if they don’t stay active.

A simple cohort analysis of all users who signed up over a two-week period would show that over 60% are dropping off in the first 24 hours, a smaller chunk 5 days out, and another group at the end of trial. You might conclude that you need to rework your onboarding drip campaign’s first emails in order to combat that big next-day dropoff. That would make sense, except are the people who are dropping off the prospects that matter most? Probably not.

Very good leads have a different funnel than very bad leads

One MadKudu came to this exact same conclusion, and despite various drip campaign tests, they didn’t see that 60% drop-off move. Then we segmented their  funnel analysis, looking at how very good, good, bad & very bad leads acted, and we found that most of that 60% drop-off was very bad leads: they had made their sign-up process so frictionless that they were getting spam sign-ups who were never going to actually use their product. As it turned out, that small dip after 5 days corresponding to the biggest area of drop-off for very good leads, who were dropping off at the end of their intense drip campaign which only lasted 5 days.

In this case, not segmenting by customer fit completely masked where their focus should be, and they spent time trying to get spam signups to stay engaged with their product instead of looking at how their highest value prospects were engaging with their product.

Our recommended Setup

If you’re looking to start segmenting funnel analysis by Customer Fit, our recommended MarTech stack is to feed MadKudu into product analytics solution Amplitude using Segment‘s customer data platform.

Account-Based Engagement and the Fallacy of Job Titles

Every week during our check-in, MadKudu Co-Founder & CRO Francis Brero & I talk about our current priorities. Our regular call also become an opportunity for Francis to download some knowledge from his time working with some of the top SaaS Sales & Marketing organizations, such as Account-Based Engagement. What started as an effort to onboard me with recordings & note-taking has turned into a series I call MadOps.

As we saw recently with the Sales SLA, the path to alignment often starts & ends with clear definitions of metrics. The leads marketing hands to sales need to have the same definition & measurement for success, which is where actionable lead scoring plays a key role in establishing lasting alignment.

If we step back from Sales & Marketing and look at aligning each department to business objectives, we can see that metric disjunction can result in each individual team being successful while ultimately failing to create a relevant customer journey at scale.

The fallacy of job titles

One area where we often observe this is when we run funnel analysis by customer fit and look at job titles as predictors of activation and conversion. On self-serve tools such as API-based products, we often see that someone with a developer title is more likely to activate but very unlikely to convert (that is, to hand over the credit card), whereas someone with a CEO/owner title is more likely to give a credit card, but less likely to convert.

One analysis we recently ran for a customer demonstrated that perfect:

How job title affects conversion | Account-Based Engagement

  • Developers convert 60% less than the average user
  • Founders, CEOs & marketing convert 70-80% than the average user.

When we look at conversion & activation side-by-side for this same customer, the number speak for themselves:

Conversion vs. Activation | Account-Based Engagement

  • Founders/CEOs don’t use the software that much but end up converting higly
  • Product & Project managers have a higher activation but lower conversion rate

Product teams are historically motivated by increasing activation by building an increasingly engaging product; however, a developer is unlikely to respond to marketing’s nurturing emails or jump on a first sales call no matter how active they are on the product.

Likewise with more sales-driven products like enterprise software, SDRs are often singularly focused on the number of meetings they can generate for their AEs; however, low-level team members are significantly more likely to jump on a phone call and significantly less likely to convert as compared to their director counterpart.

In both of these instances, we see that product & sales development are able to optimize for their metric without accomplishing the core business objective of creating a great customer journey.

How Account-Based Engagement changes the rules

What this comes back to is account-based engagement, a nascent terminology in the marketing space stemming from the principal of account-based marketing but extending it across the entire customer journey and to all customer-facing teams. Where account-based marketing encourages running campaigns to generate interest not at the individual lead level but the account level – especially important when you have multiple stakeholders in the decision-making process – account-based engagement extends that to all teams, meaning that:

  • Product teams should seek not only to make as many active users as possible, but to create active accounts: building features that encourage getting other stakeholders involved or making it easy for your hero to evangelize your product value to other stakeholders.
  • Marketing teams should not seek to generate marketing qualified leads but marketing qualified accounts, including nurturing existing accounts in order to get other stakeholders involved so as to set sales up for success
  • SDRs should not seek to generate meetings at the account level, not at the lead level, and shouldn’t be working on accounts where the necessary stakeholders are not already involved.

Account-Based Engagement | Identifying hidden opportunities

We’ve been recently working with two of our bigger customers who have a prosumer user base to identify marketing-qualified accounts that aren’t getting attention. We do this by looking not only at customer-fit at the account level – does the account look like the type of accounts that typically convert when sales engages – but also at behavioral-fit: are they engaging with the product the way paying customers typically do?

Sales reps who are qualifying leads as soon as the account is created aren’t going to be able to sift through the hundreds of warm accounts to identify which accounts have engaged properly (and been properly engaged) to be sales-ready; however, this is core to Account-Based Engagement. Just as our Sales SLA gives a common metric for marketing & sales to work towards, so Product, Customer Success, Sales & Marketing all need to have a common qualification criteria for an account in order to be aligned on how best to achieve business goals.

Remember: In B2B, you’re not selling to users, you’re selling to Accounts

The goal is not to reduce all teams to a single metric like revenue-generated, but rather to help reduce the natural tendency to game a metric by linking a common thread between the metrics that we use to measure success. That thread is Accounts.

It is all too easy to lose track of the fact that selling B2B software means that a company is going to buy your software, not a person. There are users, decision-makers, stakeholders and other advisors in the buying process, but at the end of the day a company is going to make a decision about whether to pay another company for their solutions. In this respect, every team should be focused on how to acquire, activate, convert & retain accounts, because at the end of the day it is not a user that will churn but an account.

 

 

Sales SLA: how accountability fosters sales & marketing alignment

Every week during our check-in, MadKudu Co-Founder & CRO Francis Brero & I talk about our current priorities. Our regular call also become an opportunity for Francis to download some knowledge from his time working with some of the top SaaS Sales & Marketing organizations. What started as an effort to onboard me with recordings & note-taking has turned into a series I call MadOps.

I first heard about a Sales SLA in my first week after joining MadKudu. I was familiar with a Service Level Agreement (SLA) – a commitment from the engineering team around reliability with varying repercussions if we violated the SLA – but I had never interacted with a Sales SLA, despite being in marketing.

When one of our customers is having trouble with hitting revenue goals, the Sales SLA is almost always where we start, so let’s start there.

Sales SLA: A contract between Sales & Marketing

A Sales SLA is an agreement between marketing & sales whereby:

Marketing commits to generate N Very Qualified Leads per quarter, and

Sales commits to reach out to 99% of those leads within H hours, and to contact them at least N times in the first D days

Most marketing teams have a quarterly lead generation goal. A Sales SLA doesn’t measure MQLs or SQLs – it measures Very Qualified Leads: MQLs with the potential to become customers. Marketing agrees to create enough expected revenue, and Sales agrees to convert it into the revenue target.

“The only people who create value out of nothing is Marketing. The role of sales is to keep the value of those leads constant until they close.”

Marketing not only needs to generate increasing amounts of value but to be able to measure its potential to become revenue.

Sales needs to reach out quickly and to continue to connect with that lead enough to feel like everything possible was tried. A typical adage is “8 times in 15 days”, but again, this varies for each customer journey.

Each variable of a Sales SLA comes with its own questions: what makes a lead very qualified? How many touch points and how quickly should a lead be reached out to? Should it vary based on lead source?

“Do we need a Lead Score?”

The Sales SLA requires scoring each lead as they sign up. Many early-stage SaaS companies wonder how they are supposed to have a Sales SLA from day one without having a lead score.

Let’s put it out there: everyone has a lead score.

Filtering spam at signup is scoring. Escalating fortune 100 companies at sign up is scoring. While simple, it allows you to begin defining lead quality by answering “who do you want to ignore and who do you want to talk to?”

Since everyone has a lead score, everyone therefore should have a Sales SLA. The earliest iteration can be simple: “If someone signs up through a demo form, you need to follow up faster than if they sign up for a trial.” Putting something simple in place is better than nothing at all.

Implementing a Sales SLA

The tactical owner of a Sales SLA will almost always be Sales Operations, because they are ultimately the ones managing SDR workflows today. Marketing tends to ask for a Sales SLA. It ends the cycle of sales bemoaning lead quality and marketing bemoaning sales conversion rates. The Sales SLA will move that existential, emotional debate to a practical, data-driven report.

In order for you to be able to maintain a Sales SLA properly, you’ll need to be able to track all outbound communication inside your CRM. If you’re using third party emailing tools, every email you send out needs to be tied to a lead as an activity. Otherwise you’ll get false positives or adjust your sales SLA based on current activity metrics.

Contract & Education

A Sales SLA doesn’t have to be written; however, in practice, a written agreement can be useful for onboarding new SDRs. Every new SDR should know what their team expects of them from day one. And every SDR should know what happens if they don’t respect it.

When the Sales SLA is broken, some organizations choose to put leads back into round robin. Others send it to a marketing nurturing funnel, or escalate it to a manager. How you implement the Sales SLA is up to you, as long as you’re tracking the metrics necessary to uphold it.

Once your Sales SLA is in place, much like a infrastructure monitoring tool, you should be able to detect outlier scenarios more quickly. SDRs may be on vacation or no longer with the company and still get leads routed to them. Certain campaign leads may get bulk routed to an old admin account. Or new team members may get routed leads before they’ve learned about the Sales SLA. None of these problems are anyone’s “fault,” but they need to be noticed & dealt with quickly.

Procrastination in Hyper-Growth

Sales SLAs can look daunting on paper, especially if you’re still in the early days of building your sales organization. At it’s core, a Sales SLA defines the handoff between marketing & sales. At MadKudu, for example, the handoff happens at signup today. Sales handles everything after lead generation, because we don’t yet have a need to automate that part of the funnel. We have a number of indicators (company size, technologies used, etc.) that we know correspond closely to someone needing MadKudu. This allows us to be pretty explicit about what makes a lead Very Qualified.

“People don’t put SLAs in place because they want to avoid having tough conversations”

Creating a Sales SLA is going to shed a spotlight on all the cracks in your sales funnel, especially when you’ve been in dealing with hyper-growth recruiting. If leads aren’t getting followed up on, you’re going to have to look at what the cause is. Are you understaffed? Are you not scoring/routing/prioritizing properly? Or are your Sales reps not reacting quickly enough?

When a Sales SLA is breached, it’s a symptom of a bigger problem, and usually no single person is at fault. Without a Sales SLA, it’s easy to overlook one of your sales reps not following up, or low-quality leads getting faster follow-up than high-quality leads. 

Start the discussion around Sales SLAs early and you’ll address problems that won’t go away unless you shed light on them.