Misalignment between sales and marketing can cause companies to miss their revenue targets even if both the marketing and sales departments are good at their individual functions. A revenue-killing gap can occur if your sales leader and marketing leader don’t see eye-to-eye on objectives, branding, sales support needs, etc. Because the sales department is closer to revenue, this gap will usually work against the interests of the marketing department. Marketing VPs have been fired because they’ve failed to achieve alignment.
The financial impact is as great a problem as the human impact. In a recent article, Digital Marketing Institute stated, “Misalignment significantly impacts revenue with lost sales and wasted marketing outlay costing companies $1 trillion a year…lack of alignment leads to the waste of 60-70% of B2B content and a failure to convert 79% of marketing leads into sales. There are, however, encouraging statistics for companies who are getting their sales and marketing teams on the same page.
- Aligning sales and marketing could generate 208% more marketing revenue for your company.
- Companies that ensure sales and marketing teams align are up to 67% better at closing deals.
- Organizations that successfully align sales and marketing achieve 36% higher customer retention and 38% higher win rates.”
These are disturbing numbers. Too often, a lack of accountability is the cause. Metrics drive the modern B2B marketing organization. Ideally, your service level agreement (SLA) specifies what your department is expected to directly produce in terms of awareness, inquiries (raw leads) and marketing qualified leads (MQL) – and also how you will influence metrics like the number of opportunities and revenue.
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A related problem is setting the marketing department up for unachievable objectives. Marketers tend to be optimistic by nature, but too much optimism can get us in trouble, especially when it comes to making promises. The sales VP says, “We need 150 qualified leads a month to hit our numbers.” Instead of a thoughtful response like “Let me run the numbers and get back to you,” you blurt out, “Of course. No problem. We’ll get your 150 qualified leads per month.” Although well-intentioned, your promise can come back to haunt you, so it is usually best to slightly under-promise and over-deliver.
Communication Can be Your Biggest Challenge
In an article titled “Communication Is Greatest Challenge for Sales and Marketing Alignment,” the following challenges to marketing and sales alignment were identified:
What Marketing and Sales Can Do to Ensure Alignment
Enough about the challenges. Let’s explore some action items for the marketing side:
- Gain agreement on the technical aspects of L2R. The ideal structure will combine a great deal of flexibility for field sales reps with maximum control by the marketing department (not the other way around), and ensure that relevant information about all prospects is captured — all prospect and customer data belongs to the company, and not to the individual sales rep.
- Go on a sales call, listen to sales calls, attend sales meetings, join your sales colleagues at trade shows, and anything else you can do to understand what prospects are really saying.
- Socialize together (but not too much!). It’s hard to be critical of people you know and like.
- Try to give your sales counterparts what they want – but don’t be seen as order takers.
- Over communicate. Never take it for granted that the folks in sales know or care what you are doing. Avoid surprises like your sales teams learning about a big campaign after you’ve already launched it.
- Reduce complexity. Stop it already with introducing a bunch of new (and complicated) technology that adds to the workload but often doesn’t produce results. Start by reading this article by Hank Barnes, VP and Distinguished Analyst at Gartner Group.
If you are in sales, you can:
- Stop blaming marketing when you don’t produce.
- Specify exactly what you believe constitutes a qualified lead, because this definition will drive much of the marketing department’s efforts. This criteria also forms part of the service level agreement (SLA) between the marketing and sales departments.
- Cooperate when they ask you for:
a. Help at a trade show
b. Information on what is working and not
c. Ideas for messaging and new campaigns
- Help marketing get the word out. They spend a lot of time writing promotional materials, organizing events, etc. You can magnify results with a simple LinkedIn update, tweet or addition to your email signature block.
- Keep your part of the data updated. Marketing is usually working with a marketing automation system of some type but unless the CRM or sales force automation (SFA) systems are kept up to date, it will be difficult to measure marketing’s contribution to revenue (see below).
How to Quantify the Marketing Contribution
One additional way to create a mutually respectful and appreciative relationship is to have a written understanding of what the sales department expects and what it will require to make its revenue targets. Always start with the revenue numbers and work backward. But don’t assume that marketing will supply all the inquiries, leads, and qualified leads that are necessary to hit the revenue target.
To illustrate, an established company with a quarterly revenue target of $10 million may find that fifty percent or more of this number is run-rate business that will come in regardless of what marketing does. Cross-sales, add-on sales, maintenance sales, and some channel revenues are examples of this type of run-rate business. I have seen situations where marketing’s contribution to revenue is as little as ten percent and as high as ninety percent. Regardless, this is the number you should focus on.
Once marketing and sales leaders have established each crucial metric, they then come to agreement as to who is responsible for which part of the process. In most scenarios, the marketing VP is responsible for every part of the process through qualified leads, and the sales VP is responsible for opportunities and revenue.
Clearly and accurately communicating by the numbers ensures optimal alignment. Anything less and you’ve harvested an antagonistic relationship that will destroy your chances of success. Remember that whether you like it or not, revenue is your common goal. If you can’t align, marketing or sales leadership will be called to the carpet—and the result will be additional chaos and acrimony while you’re trying to make the numbers. Never fun, never optimal, never works.