There used to be a time, before the tech-bubble bust in early 2000, when the route to CEO was through the CMO’s office. The belief was Marketing touched and coordinated all aspects of the business, knew how to build market share and understood how to read the tea leaves of emerging trends. Post tech-bubble, the tables turned and the path to the CEO seat was through sales. Board of directors and venture capitalists believed that Sales touched all aspects of the business, knew the numbers, how to drive revenue, and were on the frontlines of emerging trends. Interestingly, both paths to CEO-ship have not proven to be sure-fire successes. Tech company failures litter roadsides during both downturns unable to get their value proposition, go-to-market strategy and product roadmaps right, in the eyes of the buying customer. What does this have to do with aligning sales and marketing? It could just be the root cause - the smoking gun, so to speak.
I’ve been interviewing a growing number of Board members, CEOs, heads of sales and CMOs of large and small technology companies about sales and marketing alignment. I’m looking for the smoking gun as to why it is so hard to keep these teams aligned. There has to be a reason beyond “different cultures, time horizons, and skills”. While my interviews are not done, some patterns are emerging.
- No one knows how to measure marketing.
Boards and CEO, regardless of their domain expertise, are puzzled as to how to measure marketing. When asked what metrics they use the most frequent response is leads. Yet when probed, it’s not really leads, it’s inquiries. Both groups then lament on how marketing cannot produce quality “leads” and when asked how they fix the situation, the most frequent response is to replace the CMO. The response was the same for those CEOs that rose through sales as well as marketing ranks.
2. SMB tech company marketers aren’t measuring the right things.
There is a big gap between large and small company marketers when it comes to understanding, measuring and managing marketing’s impact on pipeline, business and strategy. Large company CMOs typically have a metrics-based operating mindset. Each one knew, to the minute, what was happening to the pipeline, the funnel and how various marketing activities impact current and future revenue. There were no differences between B2B and B2C large tech companies. The same can’t be said for SMB tech marketers.
3. Marketing doesn’t really have a seat at the Board table
Regardless of whether the company was large or small, CMOs have little to no exposure to Boards and are often left out of key strategic discussions. Board members, on the other, drew a blank on what key questions to ask CMOs to evaluate marketing’s value add and contribution. When pressed, marketing was described as a ‘black box’ and something companies are ’suppose to have’. Which explains the zero sum marketing/sales budgeting situation prevalent in so many companies.
4. Sales knows they are king of the hill.
In just about every case, the CEO and the board decides in favor of Sales. Whether it’s taking funds from marketing to add more sales people, supporting some ‘creative’ sales models, letting sales dictate marketing programs, or letting sales get away with dysfunctional and organizationally destructive behavior – the CEO is betting his job, and bonus, on the sales leader. No wonder alignment is hard to institutionalize. In companies where there was alignment, it was the result of a partnership between sales and marketing leadership and grass roots adoption.
5. Boards and CEOs could not define “sales and marketing alignment”
Everyone wanted it, felt they had some degree of it but darn if they could articulate what it meant. And that meant they could not quantify what lack of alignment was costing them in lost revenue, market share, customer dissatisfaction and bottom-line profit.
I’m not sure if I found the smoking gun but the powder burns are there and something is smoldering. Bottom-line is that if companies are going to benefit from alignment, CEOs and Boards need to get with the program. They can no longer hide behind Sales, they have to educate themselves on how to measure marketing.