Sales and Marketing Alignment: The Results Can Be Enormous
3rd August 2017 Will Humphries
According to a report by Aberdeen Research, companies that are best-in-class at aligning marketing and sales experienced an average of 20% growth in annual revenue.
So what should be at the core of your sales and marketing alignment? Your customer, right?
The ability of your organisation to align the activities of marketing and sales functions is one of the most impactful drivers of business success.
And before moving across to the marketing side of the table, I spent 20 years on the selling side. So I can fully understand the pain points of both sides – and how to address their concerns.
Let’s start with some facts & figures.
The Numbers Don’t Lie
- Demand generation and sales training teams report the least alignment around asset/content development, says Corporate Visions survey.
- B2B firms with tightly aligned sales and marketing operations achieved 24% faster three-year revenue growth, and 27% faster three-year profit growth, according to SiriusDecisions.
- Kapost reports that a whopping 65% of sales reps say they can’t find content to send to prospects.
- Highly aligned organisations achieved an average of 32% year-over-year revenue growth – while their less aligned competitors saw a 7% decrease in revenue, according to an Aberdeen Group study.
- Organisations with tightly aligned sales and marketing functions enjoyed 36% higher customer retention rates and 38% higher sales win rates, according to MarketingProfs.
- Companies with “dynamic, adaptable sales and marketing processes” reported an average of 10% more sales people on-quota compared to other businesses, according to CSO Insights.
Collectively, sales and marketing are responsible for lead generation, nurturing, conversions, and retention.
Unfortunately, the synergy that is necessary between marketing and sales is often undervalued. Plus, there is not enough emphasis on the long-term vision, goals, and strategies developed by many of firms.
Despite their closely-linked objectives, there are common factors that impede collaboration between marketing and sales.
When thinking of sales and marketing alignment, this image from Eric Wittlake of Topo best visualises the process.
The following is a thorough overview of factors that contribute to misalignment, approaches to improve alignment and benefits achieved by doing so.
What Causes Misalignment Between Sales and Marketing?
There are several common causes of misalignment between marketing and sales in an organisation. Typical examples include:
Malfunctions in business systems, processes, and activities are often affected by company culture. This can be the case when a misalignment of marketing and sales exists.
Historically, aligning these front-end activities has not been viewed as critical. Competition in many industries was not quite as high as it is today, and top management allowed each area to operate with their own goals in mind.
As is common, when no other expectation is presented, each department in an organisation operates in the way that achieves the most beneficial results within that department.
Disconnection between the two teams
Up until recently, the synergistic opportunities and benefits of marketing and sales collaboration were not recognised or valued. Therefore, these teams have been, and continue to be in some cases, physically and functionally isolated within businesses.
Without any formal connection, each team carries out activities with little to no regard for what the other is doing.
This approach can cause redundancies in lead generation efforts, and even worse, oversights in development and execution of lead generation and sales process activities.
Plus, when you have such a disconnection, there is likely no evaluation of the problems that exist, so they continue to fester or go unnoticed.
Lack of understanding about goals and communicating with prospects
Often, marketing managers, and therefore their teams, lack understanding of sales goals and communication approaches with prospects. The same goes for sales managers and their teams not grasping marketing’s role.
In a typical company structure, marketing is responsible for lead generation, which involves analysis of data throughout the sales cycle.
The sales department is responsible for taking ownership of incoming leads and converting them into buyers.
In successful firms, marketing and sales teams realise that collaboration in all sales cycle activities contributes to better goal achievement. Across both departments, and for the organisation.
Salespeople need marketing to generate quality leads. But they too must help by inputting critical data for marketing to use in analytics.
A simple but common contributor to misalignment is various approaches to completing primary activities.
Contemporary marketing leaders succeed with agility and continuous adaptation of marketing processes to leverage technology and marketing trends.
Sales teams may not always operate with this focus on agility. This point is especially true if you have a well-established group of reps who hold to historical tendencies rather than identifying ways to take advantage of new technology, trends, and methods.
Independent reporting expectations
One of the primary causes of misalignment is when executive management teams expect marketing and sales teams to report independently.
This makes no sense to me on a business level. This structure usually means that managers are rewarded when their respective departments meet target goals.
It is inconceivable to expect and achieve collaboration among two departments when you request reports and incentivise performance independently.
Though it is contradictory to historical norms, companies that succeed in reaching sales and marketing alignment look at the performance of both departments as a whole.
The blame game
It is human nature to want to blame someone or something else for one’s failure.
When you have sales and marketing misalignment, you open the door for each department to blame the other when lead generation and sales activities fail.
As noted, a common complaint from marketing is that sales reps are not playing their part in contributing data that is vital to high-quality lead generation.
The sales team often complains that marketing is not doing enough to attract the right types of leads that enable high-revenue conversions and long-term opportunities.
Lack of manager emphasis on collaboration
If managers in the respective departments are not telling their teams that collaboration is essential, it won’t happen.
It is natural for marketers and sales reps to focus on their own goals and activities if guidance from their front line managers does not contradict this perspective.
While a culture that promotes alignment starts at the top, it must permeate the leadership ranks closer to the action.
What Can Be Done to Improve Sales and Marketing Alignment?
Identifying factors that cause your misalignment is just the first step toward overcoming them.
Next, senior leaders need to discuss strategies to change the culture, systems, and processes that get in the way so that alignment can develop.
The following is a look at some of the most practical plans to build or improve marketing and sales alignment:
Identify opportunities for the two teams to collaborate
Creating a culture and spirit of collaboration between marketing and sales is the most important first step to achieving alignment.
If managers and team members in each area are not on board with the plan, they won’t do what is necessary to work together.
Executives, including the chief marketing officer, need to discuss strategies to build this culture and then communicate intentions with functional managers.
Model an open and communicative culture and encourage employees to do the same
Sales and marketing alignment only works if leaders and staff in each department communicate openly.
For this to take place, managers need to model a communicative culture, so they can effectively encourage their employees to follow their lead.
Eliminate the blame game and independent reporting to foster mutual respect for each function’s role and activities.
Openly discuss goals for both teams and share that information
Each team needs to understand their independent goals, but also recognise how those goals fit into the departmental alignment.
Ideally, you have at least some collaborative goals, such as increased lead generation and improved conversion efficiency, so that each department works with the other toward those ends.
Increase visibility across the two teams
Secrets and closed quarters do little to help your cause in creating alignment.
The more visible the goals, activities, and results of the aligned teams, the more reps in each department will take ownership for collective successes and failures.
Additionally, sales reps and marketing professionals will come to view their interdepartmental colleagues as team members, just as they do their intra-departmental colleagues.
Benefits of Close Alignment
While the roles of marketing and sales vary somewhat, a seamless and optimised marketing and sales funnel only takes place with a collaborative effort.
With alignment, sales can support your lead generation efforts by updating prospect and customer records so that ample data is available for analytics activities.
In the same way, marketing works with sales to utilise data for insights on the best lead generation activities to drive high-quality leads.
Aligned marketing and sales teams can more quickly adapt together to the changing technologies and behaviours of the marketplace.
Agility is critical in these areas in the current business climate, as the race to meet the ever-changing needs of customers is extremely competitive. Your chances of winning are greater with marketing-sales synergy.
Tracking Your Sales and Marketing Metrics
As I’ve pointed out in this post, in the perfect world, every B2B marketing campaign you run is successful. And every B2B lead generation campaign produces a plethora of high-quality prospects for passing to your sales team.
However, we don’t live in a perfect world, do we? We need to measure the performance of both teams.
My personal belief is that the single most important metric of sales and marketing alignment is revenue growth.
LinkedIn reports that 52 percent of sales and marketing professionals cited that shared objectives and KPIs would help the business improve collaboration.
You too should have a number of these metrics in place:
The Percentage of Marketing Qualified Leads (MQL) that become Sales Accepted Leads (SAL)
Let’s start at the beginning. If marketing believes they are churning our good leads, only for sales to groan at the prospect of dealing with another immature lead, there’s something wrong. If it’s not a sales-ready lead, it needs to go back into the marketing nurturing process.
Quantity of leads that are recycled back into marketing
If the number of marketing leads passed to sales keeps being added back to the nurturing process, both teams need to agree on a number of points:
- what the definition of a sales-ready lead actually is,
- the minimum amount of information required about a lead before it is passed to sales, and
- a timeframe for giving feedback to marketing on lead quality, particularly concerning rejected leads.
MQL to Opportunity Ratio
One metric I’m always keen to understand is how effective marketing is for my sales colleagues. If marketing leads aren’t developing into opportunities, I need to know why. For example, you should have an agreed timeframe for a sales rep to follow up on a qualified lead.
MQL to Revenue Ratio
This is the metric your CMO and CEO will be most interested in. Is marketing contributing to the company’s bottom line? Clicks, views, subscriptions are of no use unless they are driving profitable sales for the company.
Content Marketing Success
The stats at the top of this post demonstrates gaps in content for both sales and marketing teams. It’s hugely valuable for marketing to know what type of content works best with leads as they progress through the funnel. Is it case studies, blog posts, eBooks, guides, videos, webinars, or infographics? Also, you should understand which pieces of content resonate most with different target markets and buyer personas.
There’s no point in running marketing campaigns just for the fun of it. As I have already mentioned, the end goal is revenue generation. Track which campaigns are delivering the best ROI for you and spend more of your budget on the successful ones.
We have previously discussed the strategic influence of marketing in present-day organisations. However, sales and marketing alignment is critical to identify and then execute the best long-term vision, goals, and strategies.
If your company lacks alignment between marketing and sales, the first step is to figure out which factors contribute to the problem.
After you identify causes, develop a game plan to reorganise in a way that promotes, supports, and rewards a more collaborative approach.
Track and measure your results. As I’ve always said, if you don’t measure it, you can’t improve it.
And continue to evaluate your alignment success and adjust strategies when necessary to achieve the noted benefits.
After all, it’s all about the customer!
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