Who owns Revenue-Sales or Marketing?

Answered by: Phil Fernandez, Founding CEO, Marketo

Category: Passionate Teams

PHIL: World-class rev ops, sales ops is such an such an important function in the modern business world. At Marketo we had a marketing ops in marketing and sales ops and in sales and renewal ops under the Chief Customer Officer. They all had their plans, their models and were doing their things.

Nobody was coordinating. Nobody had a big picture of how revenue was operating in the business. For way too long, sales ops - which was the biggest of them – was creating negative opportunities with negative value. It wasn't adding any value to the organization strategically.

One of the scariest moments at Marketo for two years was when my brilliant co-founder Jon Miller who was our early sales rev ops guy could not see the whole picture anymore, and nobody could understand one another. Everybody started pointing fingers. That was last time. This time there needs to be a VP level Rev Ops executive in the business by $2- $3 million of ARR.

Spend it now or spend it later. The ability to have an individual and then a team that is thinking holistically about how revenue is happening from that early lead in the door to the sale, to the renewal, to the up sale, to understanding the full lifetime value and thinking about that in a modeling sense is paramount. This person needs to be a storyteller. They can't just live in the modeling world. It has to be where a CEO or a head of Sales can say, "What's going on? Tell me a story about what's happening." If you have somebody in this job who can look at the numbers, look at the models and then explain it in plain old English to the executive team then it's gold.

RAVI: When you get the VP of Rev Ops to do this step (that I fully agree with) and you're looking to generate new opportunities but the tactics and spend around generating new opportunities might be happening in marketing. How do you actually organizationally align those two so that this person can tell the story and marketing is not just generating leads but actually creating a closeable funnel of the right type that's going to let you be successful?

Yes, I think marketing can have a marketing ops person that manages all the spend in marketing, but for the spend that’s oriented towards demand, I think sales needs to approve it, sales needs to have their hands-on understanding what it is - through the agency of a Rev-ops person who is actually running the approval and participating in the design of opportunity creations program.

RAVI: Program spend is controlled by that person.

PHIL: Spend is controlled by this person and they need to be given the authority and have the ability in the organization to go into Marketing and say, "No, I'm sorry, Sales is the customer for this and they've got a handle on your spend".

RAVI: In that instance, how do you get the marketing person, the CMO to buy off on this? This is exactly what I would like to see in the companies I'm on the board of but how do you manage that change? How do you keep that person engaged because marketing people in many cases who are CMOs don’t want to live without that responsibility.

PHIL: That's right, it's tough. It’s one of those courage moments for a CEO to say to their CMO if their CMO doesn’t like it, "You're going to have a lot of discretion about this part of marketing and in fact I'm going to empower you on those things, but when it comes to the part of marketing that is about supplying and working with sales, your customer is sales and they're going to have a lot of control over its role.

It’s a courageous moment for the CEO. This role belongs in Sales and should report to the CRO.