Your VP Sales Has a Sales Quota. Your VP Marketing Has To Have a Quota, Too.

One of the first iconic SaaStr posts was Hire the Right Type of VP Marketing or You’ll Just End Up With a Bunch of Blue Pens with Your Logo On Them. The basic idea was to help folks who haven’t hired a VP or Director of Marketing hire the right one for a pre-Scale sales-driven SaaS company. Someone that knows, lives, and breathes leads, funnels and funnel management, drip marketing, and all the rest. Someone who knows how Marketo and HubSpot actually work, how to deploy capital and measure CAC, who knows how the whole playbook from first touch to money works, as a science.

And most importantly … someone who knows how to deliver leads. A Lead Commit. Or if you want to go a stage further down the funnel, an Opportunity Commit. An “Opportunity Commit” works well for bigger ACVs ($20k+) in my experience and less well for small deals). Or sometimes an SAL commit (Sales Accepted Lead). Or SQL commit. It matters less exactly what the commit is … than that there actually is one.

I want to bring this up again because I interview so many VP/head/director of marketing candidates. And these days, they all can talk the talk. “Positioning”. “MQLs”. “Demand generation”. Blah blah blah.

But can they actually do it? You can find out pretty quickly if your VP of Marketing candidate can deliver leads (and thus, hopefully, increase your revenue growth rate) with just 2 or 3 questions:

**Question #1: What Was Your Lead / Opportunity Commit At Your Last Company?**Again, it might be leads, or opportunities, or accounts, or whatever. But whatever it was — if the candidate can’t answer this question fluently, without stumbling, in about 60 seconds … she or he didn’t really “own a number”. I’d pass.**And ask how was it determined.**It doesn’t matter exactly how. Did the CEO pick it? The VPM together with VPS? Who knows. But learninghowthey decided this #1 KPI and metric from your VPM will teach you a lot about if he can actually do it. Again, you’d be surprised how many candidates will stumble and say “I don’t know how the lead commit was determined.” Pass.**Question #2: I Want to Hit $Xm in ARR By Year-End. What Should We Do In the First 90 Days to Kick That Off?**A great VP of Marketing won’t actually know the answers yet. But if you give her your raw data — she will start working through the math. Average deal size, close rates, current growth rate, incremental growth required to hit the number … and she’ll have a very rough plan and some good ideas. And I sure hope that plan doesn’t start with a “brand review” for 30 days. It should start with figuring out how to grow leads Y% so you can create the incremental growth required to hit the plan.**Question #3: How should marketing and sales work together to hit this plan?**This is sort of a catch-all. You’d be surprised how many candidates don’t see the roles as connected. If not … I’d pass every time. Your VP of Marketing and VP of Sales need to be your Dad and Mom of Revenue in your company. More on that here. And go further before you make the hire. Talk to the VP of Sales he or she worked with. See if they’d recommend her. And exactly what sort of leads … they delivered.

Try these three questions. You’ll be shocked how many “head of marketing” candidates you’ll talk to fail them. And even quite a few fake it by stumbling over the answers. Don’t let that count as a pass, either.

If they pass this test for real, if the answers sound right-ish to you … you may have someone good. Ideally, also ask someone who’s done it before to interview them as well.

But if you want more revenue and leads … and not just blue pens with your logos on them … and the candidate never really owned that metric, a true lead commit … it just never works out.

………..

A related, deeper dive here:

Great post Jason. I totally agree that VPs of marketing should have lead quotas. I’d like to up the ante, though. I think VPs of marketing should have variable comp based on lead quotas, including the ability to get over 100% of their quarterly or semi annual bonus if they exceed. Not only will it motivate them, but it will sure drive agreement on what a qualified lead is if they are getting paid on it.

Good reminder. I made that point in prior posts but should update this one to include it. A VPM without variable comp equals suboptimal results.

Great tips Jason as always. Curious on your thoughts on the metrics themselves. Once sales/marketing work together on a universal lead definition, it seems SQLs and Pipeline should be the ideal metrics to hold Marketing to as opposed to MQLs. Thoughts?

At the end of the day what’s most important is consistent measurement of a metric the CEO, VPS and VPM all agree on. Having said that, as long as your deal size is high enough, my favorite measurement metric is Opportunity Commit. Because it cuts right through the MQL-SQL drama.

Jason, I have a question for you. Rather than a lead commit would it not be better to give them a revenue commit? I am thinking about the quantity v quality problem so many companies have. Tying the VPM to the overall revenue number or to a closed lead number would seem to address that issue. What do you think?

I think really you need to do both, I just kept the details out of this particular post. I think all your VPMs need variable comp tied to hitting the CYE ARR goal. Then, the #1 individual KPI / goal for the VPM is the lead/MQL/opportunity/whatever commit. But have to hit ARR goal as well.

I agree with having a commit or quote.

What I would caution against is using traditional lead metrics as the quota (Number or revenue). The first reason is that the number of top-of-funnel leads is largely a factor of spend. A VPM could divert money from much needed strategic initiatives to apply it to lead gen for the short-sighted goal of “making quota”. That is, one can throw money, even if not efficiently, at activities that will generate leads, and to a large extent, without much concern for quality.

Revenue quota’s partially solve the problem but is often outside of the control of the VPM. For example, especially for an early stage company, it is often imperative to do a logo “land grab” even if it means discounting.

I prefer to use two metrics:

1. Marketing has a quota that N% of closed deals at the end of the year can be directly attributed to marketing, and

2. Instead of focusing on an arbitrary lead quota (again, that’s a factor of spend), instead, make the goal along the lines of improving the conversion % of web visitors to trial to subscriber. If you can improve that percentage by N then the ramification is felt through the entire funnel.

Of course, there’s no one size fits all. Just relaying what I see as more effective.

Thanks for a good article and discussion,