Your Best Leads Are Going to Waste

Thoughts on Selling Podcast: Javier Lozano Jr. on Sales and Marketing Alignment, AI, and Fixing Leaky Pipelines

Guest: Javier Lozano Jr. | Host: Lee Levitt

Who Is Javier Lozano?

Lee: Welcome back to the Thoughts on Selling podcast. Today it is my pleasure to have Javier Lozano join to talk about all things sales and marketing. Javier, welcome aboard.

Javier: Thanks for having me, Lee. Really excited about this conversation. I feel like you and I really aligned on a lot of things before we got on the show.

Lee: I agree. So here's the first question, Javier. Who is Javier Lozano?

Javier: I think I can answer that one. It's pretty easy. I am a fractional CMO and CRO, and I have been helping companies that are founder-led, CEO-led tech companies or tech-enabled services that are looking to scale their business, but they don't have an infrastructure where sales and marketing are aligned, where there's any kind of sales enablement to make sales successful, where their branding and positioning and messaging don't really align with what their growth goals are. They're looking for a way to start building the foundation where they can create predictable pipeline. I come in as that fractional that creates that foundation so that we have a ground to work on and a floor to build off of.

The Energy of Small Companies

Lee: I like that. I've worked in small companies, founded a couple, and I've worked in really large companies. The energy of the small company is so much more fun. There's no safety in large companies. None whatsoever. No stability. What do you get in a large company? You get hierarchy. You get a way of doing things. And you and I both know that we can take those formal ways of doing things into really small companies and get things done faster. But there's nothing like the energy of a small company where you know you have to get stuff done today. When I started a company, I was passionate about what we were doing and I couldn't stop talking about it. That infectious enthusiasm — that's what drives interest with early customers.

Javier: When you're in that 1 million, 10 million, maybe 15 million range, every decision you make can be impactful. And that's great — and it's scary because sometimes you can make a bad decision. But for the most part, when you're thoughtful about how you're doing it, you have more impact. Flying by the seat of your pants sometimes is kind of how it feels in startup and scale-up companies. Those are fun. It's a different energy. When you're doing hockey stick growth and you're two-Xing and three-Xing, those are really fun because there's great stories to be told. Sometimes you're just exploring ideas — "I saw this, let's see how we can make this thing work" — and then you model it and make it go. Those are more impactful than the larger ones that are more established where a 5% growth is great.

Knowing When to Say No

Lee: I was fractional CRO for a company that makes water sensors that go into industrial environments and aquaculture environments. And a very large distributor — probably the largest in the related spaces — Grainger came to us and said, "We want to take your product line on." And everybody got really excited. And I said, absolutely not, because Grainger was just too big for us. That first stocking order would have dramatically strained the organization. And it's not a product that sits well on a shelf with 10,000 other items. The return of all that product six months later would have destroyed the company. I said, we're just not doing it.

Javier: That's a smart move.

Lee: Half the board got it. Half didn't. We're going to focus on regional industrial distributors for whom our product is one of two or three — directly probably one of two, competing with a family of other products that they take into a facility and talk about. Their entire portfolio, of which we were one. Lower risk, slightly lower volume, but—

Javier: You created your own blue ocean by doing that. When you go in and start fighting with the sharks in the red ocean, it's a race to the bottom. I really believe companies need to think about when it comes to growth and scale: how do you create and position yourself and create your own blue ocean so that you're competing against yourself? That's the part that's hard because you want to say yes for these big opportunities. And then other times you're like, this could literally break us from an operational standpoint.

Lee: When you're selling software, saying yes to a very large opportunity is not as fraught with danger necessarily. When you're in services or hardware, you have to be very careful.

Javier: Yeah, I mean, you've got overheads. That's the biggest thing. You're going to start cutting into your margins. And with SaaS, you've got 90% margins essentially. You can scale to the moon.

Lee: I almost put a company out of business many years ago by selling our services way ahead of our revenue. We were on a 90-day collection standpoint from date of service delivery. Scaling up too fast meant we were paying the service delivery people faster and faster, but revenue was trailing. The revenue was there — it was just trailing. This was a $10 million company and they lived through it. They stayed healthy and got bigger, but it was touch and go there for a while.

Javier: I totally get that. My last in-house role, that was a big challenge because we ran a dual marketplace — we offered a service but then also leveraged our network to fulfill the service. You could only grow in unison. If you grew your provider service too big, they'd be demanding service you'd be sending them. Vice versa, if you grew your customer too big but didn't have enough providers to fulfill, you're going to have customers ticked off. It's a matter of growing these things in unison. A service-based business — scaling is not an easy thing to do.

Sales and Marketing Are Not Stovepipes

Lee: If we take a step up and look at the meta-conversation here, what we're saying is sales and marketing are not stovepipes. Sales and marketing and operations are not stovepipes. It's a closed-loop system. We as executives need to keep a handle on everything that's going on. If marketing tries to grow too fast, sales can't keep up. If sales grows too fast, operations can't keep up. If sales and marketing are not working in sync, nobody's growing.

Javier: It's exactly it. You've got to have that feedback loop and you've got to be okay with it. As we discussed before we got on the air — marketing tossing leads over the fence and saying, "It's your problem now, not mine, I got you the lead" — those days are long gone. We should be in a place where marketing is being held accountable to revenue goals. Because we can influence it. But marketing also needs to be aware: if I keep pushing the throttle and sales is closing, we could be really impacting operations where it hurts customer success.

And even though it doesn't have a direct impact on marketing, in my opinion, customer success is another piece of the puzzle of marketing. Because those stories are what you can take to your future customers and also to sales where they can say, "Look, we've done this for these last 10 customers. These are amazing stories." But if you push it to the point where no one's happy, you get no success. And sales will have a tougher time selling. It's a really tough balance, but you've got to be open to the feedback loop and always listening and having your hand on the pulse.

Customer Success Is a Marketing Function

Lee: I want to touch briefly on customer success now that we've brought it up. I agree with you that the customer success function is an important part of customer delight. And even before customer delight, pulling the customer out of the trough of despair. "What did we just buy? Why did we do that? We were perfectly happy with business as usual. Things caught on fire every now and then, but they were small fires and we knew what to do. Now we've got organizational risk with this new unknown. I've got personal risk. I'm going to get fired."

Customer success is there to catch the customer in that initial trough of despair and onward. I worked with a fabulous CSM on the Xerox key account at Oracle years ago — Jane Scott, a good friend, was on this podcast about a year or so ago. One of the important functions for a CSM is to be somewhat separate from the pressure of new revenue. They're the ones who really hold the customer intimacy. And today we hear more and more companies doing away with the CSM role. What the heck?

Javier: I don't agree with that. Let's go back to basic buying. You and I buy stuff on Amazon. We read reviews before we make a purchase, even if it's a $10 purchase or a $1,000 purchase. Those reviews are customer success. If you start dismissing or throwing away customer success as a department, I think what you're doing is hurting your overall brand.

How I look at brand is reputation — it's what people say behind your back when the doors are closed. Customer success is an opportunity to dip into brand building and storytelling. When you have a great success with your customers and they say these cool things, you can take those exact words and use that in your brand building, your advertising, your sales process, your sales enablement.

Whether it's like, "You guys are awesome" — you can use that now in your marketing because your customer said it. Tom at ABC Corporation used these exact words about us. That gives you an edge. That gives you an opportunity where no one else can compete with you. You're putting a stake in the ground. You're competing in your own blue ocean.

Lee: The NPS is a trailing indicator.

Javier: Correct. Don't get me wrong, I'm not saying dismiss those things. But use them as firepower because you get some great stories. All of a sudden marketing is like, "Oh, thank God, I can use all of this." And sales is like, "My last three engagements are this — I sent them these three things and all of a sudden they're re-engaged." It works so well.

Lee: From the perspective of relationship management — and of course we don't need to worry about that anymore because we can do sentiment analysis on emails and phone calls. So we don't need CSMs, we'll just use AI to tell us whether we're doing better or worse. Good luck.

Jane would sit down and have a biweekly conversation with the CIO at Xerox. And that CIO would be saying, "Hey Jane, this is what's coming up. This is what's working. This is what IBM is doing, this is what SAP is doing, this is what Salesforce is doing." They were all vendors. We were one of the vendors in his shop. And those were leading indicators of what's going on — not just how a relationship was going, but what's going on. And that's gold.

Leading Indicators vs. Lagging Indicators

Javier: In marketing and sales, there are leading indicators and lagging indicators. The leading indicators aren't necessarily the metrics that you want to report to the board, but they directly tell you where you're going. You're like, "This not only gut-wise feels right, but we're getting this kind of feedback. Let's see what happens in 30, 60, 90 days on the back end."

Lee: Many years ago, I asked all of my clients — at that point I was running a sales productivity practice at IDC, so IBM, HP, Oracle, Microsoft were all clients. I surveyed them all and asked, "What's your favorite sales metric?" IBM said, "Number of new opportunities put into Salesforce each week." I said, "Why is that so important?" They said, "Well, it's not the metric itself. We don't use the metric to run the business. We use the conversation about the delta — between Jim's team and Sally's team, between region three and region four. Why are we getting 2.1 new opportunities per head on this team and 3.5 on that team?" The managers would sit down and go through it. So it was a learning opportunity, not a reporting opportunity.

Javier: If more sales departments embraced that, it would solve a lot of problems. There's a metric I reported on a lot, and I try to teach my clients this — it's called HIRO pipeline. H-I-R-O, which stands for High Intent Revenue Opportunities. Close to what you're discussing, but we looked at HIRO pipeline as: if your sales team is closing anything over 25% or more, then we call this HIRO pipeline. The goal obviously is that you want this to be as high as possible.

If it's below 25%, then we have a problem — either your sales team really needs help or you're not delivering the right quality leads so they don't have a chance to make it go any higher. At my last in-house place, we were averaging HIRO pipeline in the 40, 50, 60% range.

Lee: That's really cool. The level of high intent reflects quality in terms of marketing, because when you deliver bad leads, your HIRO number is low.

Javier: Exactly. And not just that — your sales team is wasting time on the wrong type of leads, so they're not getting the right people into the pipeline anyway.

The Cost of Bad Leads

Lee: What's the difference in cost between a high-quality lead and a low-quality lead?

Javier: Oh my gosh. It depends on the business. In my opinion, companies should be looking for higher quality where they're willing to pay more money, given that their average cart value is going to cover those costs. When you're wasting time on lower-quality leads, you're wasting resources — ad dollars, marketing resources, sales resources. You're going to deliver a bad experience because they're probably not going to close the way you want. And if they become a customer, they're going to be a headache. There are all these repercussions.

Lee: Selling a Porsche to a Chevy buyer costs the same as selling a Chevy to a Chevy buyer. Buying that display ad is the same cost per thousand. But if it's badly targeted, you're going to get bad leads in and now your salespeople are working on impossible conversion opportunities. At the top of the funnel, it's essentially the same — marketing is spending what it's spending. And now all the costs fall onto sales.

Javier: Well put.

Aligning Sales and Marketing on Revenue

Lee: I started to see sales and marketing organizations talk about alignment, and one of the tools they used way back then was taking marketing executives and sales executives and giving them the same goals. The same MBOs, the same OKRs. If the salesperson's OKR is to hit 100% of quota and the marketing person's OKR is to put a thousand butts in seats, we don't have a meeting of the minds.

Javier: I'm all about having sales and marketing get aligned on revenue. How you get there — I don't really care if it's by going to events. Okay, great, we've got to draw a line to that. But having some sort of revenue goal and revenue target.

Does that mean marketing owns revenue? No, it doesn't necessarily mean that. But what it does mean is you shouldn't be championing that you got a bunch of MQLs. You should be championing the closed-won. Then you go back to sales: "Tell me about these 10 deals that we closed. How did they go? What was it that made you close those a lot easier than these other ones?" That's the idea.

In my take, the marketing leader should also get some sort of bonus or commissions for helping influence and hit that revenue number. They built the right type of pipeline that allowed the sales team to be successful.

Lee: And frankly, Javier, just between you and me today — I'm going to say this carefully — there's no excuse for not being successful. We have the tools. If we have a decent product-market fit, we have the tools.

Javier: I totally agree. We have more tools today than we did six months ago. Where the success is going to be mismatched is either you hire the wrong team or you haven't positioned yourself correctly and people are still confused. Even though you might have product-market fit, the positioning isn't quite there. The messaging may not be dialed in. Those are things you can work on with sales and marketing together.

AI as a Sales and Marketing Accelerator

Lee: At some level, we always had some of the basic tools, and basic tool number one is common sense. Here's an example. I brought a cloud-based data warehouse to market with Oracle a few years ago, and the initial strategy was to sell this to existing customers starting with DBAs. The response of the database administrator was, "So this is an automated tool that doesn't require DBAs anymore? So this is putting us out of work." Literally, I had DBAs show up at launch events saying, "I just came to see what's going to put me out of a job." After about 15 minutes I said, let's go after line of business. This is a line-of-business tool for people who need to do analytics. Common sense. Don't sell a tool to someone for whom the tool's going to replace them.

Javier: My father says, "If common sense was common, everyone would have it." I don't necessarily think AI is really taking over people's jobs. A nail gun didn't replace a carpenter — it just made the carpenter able to put up a house in six months versus twelve months. You're not going to sell a nail gun to a plumber. You're going to sell it to the right person.

Lee: I'm looking at the use of AI in sales organizations from several perspectives. One, on a freelance basis — if I'm a rep, how can I leverage ChatGPT or Gemini or Claude as another series of tools? How do I sharpen my message? How do I better understand my patch? That's the ad hoc use.

Then there's the systemic use — we're going to give our team a coordinated set of tools, whether it's an AI sales coach like Rainmaker for role-playing and practice, or Spot Logic for better discovery, or any number of task-based or skill-based tools.

And then there's the third, which I'm starting to see — where people have built AI functions into the core revenue operations process. It's not an add-on. It's built in.

Javier: I think that's genius. There'll probably be things it sees that are metrics, stats, numbers that you can't quite pin together. The MCP piece where you can literally put Claude into HubSpot and it can read your entire HubSpot — those little pieces are valuable. All of a sudden you're no longer wasting time searching. You're just typing in what you need. Those are great ways to augment what you're able to do so you can make better predictions into the future.

Lee: My son, as a salesperson in a health management company, fed all of his sales call transcripts into ChatGPT and came out with better marketing collateral. He reduced his time to revenue — this is a B2C with a $5,000 high-income individual purchase — from first call to acquisition by 50 to 60%. From three months to a month or less. And his conversion rates more than doubled.

Javier: You're kidding.

Lee: Just by listening to what people were saying in an aggregated way and changing the language, pushing the sales verbiage back into marketing. Now, why is a rep doing that? That should be marketers doing that. Marketing organizations should own that kind of process enhancement.

Javier: It's interesting because I did something very similar. We were working on email communication coming from the sales team, and they were giving me feedback saying they wanted something different. So I took about a hundred transcripts of sales conversations, had them analyzed. I went into HubSpot, ripped them all out, and said, "Help me figure this out. Let's take all the positive sentiment conversations and see what the common things were that made these work."

The idea was to pull from these transcripts: why are they buying? What are these conversations? And then write our emails around that. What was interesting is sometimes the sales team would say, "Well, I wouldn't say that." And I'd say, "Dude, I analyzed a hundred of your calls. These are the things you're saying. This is literally what you're closing deals on." And they're like, "Well, I just don't know." I'm like, "The data's there."

What we did is we found common ground and fixed the messaging at different stages. If a person went all the way to almost checkout, the communication to them was different than the person who stopped at a certain page. We did this on purpose because it tailored how we'd reach out from a sales perspective — meeting them where they are, and taking our tribal knowledge from the transcripts and making sure we're talking to them in those same ways.

Lee: The difference today is almost everything can be transcribed because most conversations are recorded. You take all that unstructured data, throw it into an engine, and now you have a simple set of high-level recommendations with high confidence levels. We couldn't do that 10 years ago. We couldn't do that five years ago.

Javier: The closest company I've seen do something close to that is Gong. Amazing product, bolts on correctly, gives you coaching. But now these things are accessible to us. It's become way easier. The technology is there. You just have to think in frameworks and systems to build it out.

The Art and Science of Selling

Lee: The upside is that for transactions that are fairly consistent, one buyer to the next, it's easy to do. When you look at large acquisitions that are revolutionary — if I'm implementing a new ERP system and I've never had ERP before, that's going to take me a year from the time I say "I should do that" to signing a contract. Or more.

Understanding what an experienced field rep does — it's the art versus the science. Much of that art is invisible to us because it's done at dinner tables, ball games, on the golf course, or occasionally in an office. Most of that is relationship development as opposed to simple product-based conversations. Even there, the relationship stuff you can take a look at. But it's an interesting time to be in this business.

Javier: It is. Is it scary? Yes, because we don't know what we don't know. Is it going to replace me? It might, but it's not quite there yet. But it's exciting. I feel as though this moment is almost like when Apple came out with the iPhone and everyone was excited, but you didn't have an app store. For six months or twelve months, there was no app store. Someone I was talking to was doing consulting for a company called YouVersion, which is a Bible app. They were in the midst of closing their doors. Then Apple comes out with the actual app store and they've never turned around since. I feel like we're at that same inflection point with AI.

Lee: I was listening to a podcast that Reid Hoffman was on, and he was talking about how when he fires off a new project, he's got three separate AI platforms working on it. At one point he said, "I need to understand how to manage them, because I realized that ChatGPT and Gemini spent four hours saying thank you to each other, and that cost me about 300 bucks."

Javier: That's funny.

Stay in the Inquiry

Lee: The host asked him what's the maximum number of projects he had going at any one time. He said 17. Now Reid is not your typical entrepreneur. But this reminds me of one of my favorite books, Think Better. Here's the short version: there are two kinds of thinking. One is evolutionary thought, the kaizen method — let's improve by 1% every day. The other is revolutionary thinking — whatever we did before, let's not be encumbered by that. Let's look at things fresh and take quantum leaps. The second theme is: stay in the inquiry. Keep asking questions. Don't jump to action so quickly. Keep peeling away the layers of the onion.

Javier: It's funny you say that, because I feel like the best salespeople ask lots of questions — sometimes stupid questions. "Are you sure this is black?" "Yes, it's black, Tom." But what you're trying to do is unveil problems.

I've embraced that as a marketing leader and sales leader. I'm always asking questions — not from a point of not knowing. I'm curious to see what you're going to say, because there's going to be one or two things where it's like, "Boom, that's it. That's the true underlying problem." Or, "That's the goal we can go take to market and run with." Asking more follow-up questions is one of the hardest things to do, as opposed to always going into "let's just close this deal." Ask the right questions, because that's going to change everything.

Lee: When I was running sales at By Appointment Only, we were working on a big deal with a large new prospect. Jim, the CEO, joined me on one of these meetings. We were getting pretty close to closing, and then Jim asked a couple of the key stakeholders, "What would cause us to fail? What would cause this project to go off the rails?"

At first it scared me — "Hey Jim, you're going to screw up my deal." But no, he was actually making sure it was a solid deal.

Javier: When you step back and think about that — okay, these are the things that will make it fail. We just don't do those things.

Lee: Exactly. Or something simple like, "Our sales leaders don't pay attention to email." Great — how can we communicate with them so we know what's going on?

Javier: I love that. Ted Lasso is one of my favorite shows. "Be curious, not judgmental." That's one of my favorite lines. I think as a leader, you should always embrace that. Always be curious. Always ask a little bit more.

Lee: Be the goldfish.

Key Takeaway

Lee: What do we want people to take away from this conversation?

Javier: We hit a lot of stuff here, but the big thing is that I really believe marketing and sales need to find ways to align with each other. At the end of the day, those two pieces of the engine are what's going to create that success, hit that revenue. I'm not saying operations doesn't account, I'm not saying customer success doesn't account — but sales and marketing have the biggest impact at hitting revenue goals, and they need to be working together. Tied at the hip. Aligned in so many different ways.

It can be done — I've done it before, I've seen it done before. When you do that, it's just a different journey because you're fighting the same battle. In football terms, everyone's mad when everyone's losing, everyone's pointing fingers. But as soon as everyone's winning, you're winning Super Bowls. Nobody's pointing fingers. They don't care what you do because you did your job. That's how marketing and sales should be.

Lee: It starts with culture as opposed to comp. But comp sure helps.

Javier: A hundred percent.

Diagnosing Leaky Pipelines

Lee: Javier, where can people find you?

Javier: Two places. First is LinkedIn. I believe I'm the only Javier Lozano Jr. on LinkedIn, so make sure you put the Junior in there. Connect with me there, send me a DM. And then you can go to my website, boldermediasolutions.com — that's Bolder, B-O-L-D-E-R. I do have a free diagnostic that folks can download on their own. It allows them to see where there's leaky pipeline in their revenue engine. Takes 15 minutes and gives you priorities: these are your top two or three items and here's what you'll be doing.

Lee: So two things. First, a tweak — that's Bolder Media. B-O-L-D-E-R, not B-O-U-L. Bolder. Like the rocks. And two — diagnosing leaky pipelines? We didn't talk about that, dude. You got my attention.

Javier: As I come in as a fractional, I don't just come in from the marketing perspective. I look at it holistically. I see a lot of companies where they're doing things operationally — "This is just what we do, this is how we do it" — and they don't realize they're missing out on opportunities.

It's basically keyed around seven pieces from pipeline — everything from marketing, success, sales, rev ops — different elements. It allows people to find out where they really need to focus. Because like any ship, if you have all these little holes, you're not going to be able to keep going. Scalability does not become a predictable thing.

It gives you focus, and that's the biggest challenge I see — a lot of CEOs and founders don't have focus on where to put their attention. The diagnostic reveals where to put the attention versus "we need to do all these things." It doesn't work like that. When you're creating a true motion, you wedge into "this is what we're doing," and hell or high water, this is how we're doing it.

Lee: I love that. Following on with a boat analogy, one of my favorite books is Will It Make the Boat Go Faster? Only do the things that make the boat go faster. Stop doing the things that make the boat go slower.

Javier: That's the whole purpose behind this. Two weeks ago I relaunched it, and someone downloaded it and immediately said, "I know what my score is. This is where our problems are." It's not going to give you the recipe, but it gives you the direction of where to put your attention. That's really half the battle.

Lee: What would be one or two common issues you might identify if 50 people went through the diagnostic?

Javier: One of them is going to be rev ops. When I say rev ops, I look at it not just as dashboards and HubSpot. It's like, "Hey, you've generated these leads, but then there's no follow-up. Where are the stages? How are people moving?" Most organizations that are larger have a dedicated rev ops person. But in a startup or scale-up, someone has to put that hat on and it's usually three or four people.

One of the things we did at my last company is we built an engine for emails that was generating $1.5 to $2 million. That was part of our rev ops strategy — if someone doesn't do this, this is what happens next. It allowed the sales team to focus on what gives the biggest leverage.

The other one — positioning and messaging. This is one that creeps up. You might think you have the right message, but is it resonating? Is it drawing in the right traffic?

Lee: "My message is great. I love it. Nobody else understands it, but I love it."

Javier: I hear that from CEOs all the time. "Well, it doesn't resonate with me." I'm like, "Last time I checked, you're not signing the checks for all of these purchases." We need to remove ourselves from our personal feelings and let the customer reveal what's interesting to them, what's important to them. That's where the customer success piece comes in — listen to what they're saying and use that.

Lee: I love the tool of that self-diagnosis. It's free, it's private. They can do it in the comfort of their own home. They don't have to be embarrassed. It surfaces where they can choose to get help.

Javier: That's the goal. It all starts with self-realizing, self-reflecting, being self-aware of what you need. I can do so much DIY in my home, and other times I'm like, I've got to hire a contractor.

Lee: When it comes to fire, that's when I outsource.

Javier: Exactly. So it's like WebMD, if you will.

Lee: Javier, this has been absolutely fabulous. We should pick this conversation back up soon and find out whether AI has replaced us in three months or made us bionic.

Javier: I'd love to have this conversation again. This has been great.

Lee: Sounds good, Javier. Thank you.

Javier: Thank you.