• February 2, 2016
  • By Paul Greenberg, managing principal, The 56 Group

Sales and Marketing Alignment: Trend or Necessity?

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Let's start by making clear where I stand on the question: necessity. With that out of the way, let's examine why.

Historically, there has been a (somewhat exaggerated) disconnect between the marketing and sales departments. If you're a salesperson or a marketer, you're probably aware that you operate with different objectives and cadences from your counterpart, and you'd be hard-pressed to disagree that you occupy different silos.

How does this manifest itself?

THE SALES AND MARKETING DISCONNECT

Sales and marketing have always had distinct objectives. Marketing's job was to grab the attention of potential sales prospects—and of the marketplace—and make the company they represented known throughout the land (in a good way). The sales department's objective was also straightforward, in a way even more so: getting someone or some group to buy something. The people they sold to came from leads often initially generated by marketing. But otherwise, the two departments weren't involved with each other. More telling, the key performance indicators were different and unrelated, as was how each department was compensated.

As a result, a lot of effort went on in parallel but not in conjunction. And that led to discontinuities and problems such as the following:

  • Marketing ran campaigns without any input from sales and thus weren't taking advantage of salespeople's insight.
  • C-level executives didn't trust marketing because they felt that marketers didn't pay attention to the financial realities of running a company. This was borne out by a 2012 Fournaise Group study that found that 80 percent of CEOs shared that belief.
  • Salespeople altered marketing content to their own ends when they felt that corporate initiatives didn't address the sales opportunities they had in hand.
  • Lead transfers between marketing and sales were sticky because each department had its own idea of what constituted a qualified lead.

These were (and by the way, still are) just some of the problems—and they were noticed quite a while ago.

As far back as 2006, Phillip Kotler and a gang of colleagues wrote a significant article for Harvard Business Review titled "Ending the War Between Sales and Marketing" where he both posited the disconnect and at the same time made a few suggestions about how the two departments might deal with the problem.

But it was in 2008, with the seminal work by business gods Don Peppers and Martha Rogers, titled Sales and Marketing: The New Power Couple, that the problems came to the fore and people finally got to work on the issues.

One of the primary reasons that sales and marketing alignment has assumed some urgency is that customers, especially in the business-to-business (B2B) world, have become much better informed, more prone to listening to sources about a brand other than the brand itself, and considerably more demanding of a brand. Plus, with the advent of large-scale e-commerce, customers have considerably more choices on where to buy and from whom, and costs are more widely distributed than at any time in the past.

And with a seemingly endless variety of new media for people to communicate on and gather information from, marketing departments find it harder to capture the attention of potential customers and require more insight into their target audience—insight that salespeople have.

On the other side of it, because potential buyers have more information sources available and trust their peers far more than brands as sources for brand info, they come to brands much better informed. The standard number you see is that 80 percent of the buyer's journey is finished by the time he reaches a potential vendor.

The upshot is that marketing has to engage prospects, not just in the lead qualification stage but throughout the remainder of the buying cycle. All of this was borne out by some startling but at the same time logical numbers that surfaced in a 2014 DemandGen B2B Buyers' Landscape Report:

  • Sixty-eight percent of respondents said they used more sources for research in buying cycles than they had in the previous year.
  • Sixty-five percent said that winning vendors' content had a significant impact on their buying decisions.
  • Sixty-one percent said that winning vendors had a better mix of content appropriate for each stage of the buying cycle.
  • Fifty-eight percent spent more time evaluating than in the past.
  • Fifty-three percent (up from 19 percent in 2012) said they relied more on peer communications than they had in the previous year.

Think about what you see in those numbers. Distilled to their essence, they say that buyers are ready when they get to the vendor; thus, the content that marketing provides to potential buyers at pertinent times can make or break the deal. If it's right, deal closed. If it's the wrong content at a given point, deal over.

As the report indicates, marketing is no longer just the first line of engagement, where attention is grabbed and leads are generated, but a content provider for salespeople at key points. Marketing departments have been given revenue responsibilities for the first time ever in hundreds of companies across the globe. To achieve those goals, they've had to align with sales, or they simply couldn't.

One of the odd ways this alignment manifested itself at first was that marketing automation vendors Marketo and then independent Eloqua (now Oracle Marketing Cloud) started calling what they were doing a very accounting-company-like "revenue performance management," which thankfully they no longer do.

So what are some best practices now that sales-and-marketing alignment is more than just a trend or a fad or a small blip? Here are a few:

  1. Sales and marketing jointly plan and execute. This means their messages, definitions, measurements, and objectives are aligned strategically.
  2. They jointly accept some metrics—win rates, lead acceptance, and opportunities conversion, to name several.
  3. They clarify in ways acceptable to both what constitutes a marketing-qualified lead and a sales-qualified lead.
  4. Marketing is assigned revenue objectives.
  5. Marketing goes beyond being the first line of engagement to a content provider in the sales process, which allows salespeople to become subject matter experts—not just sellers.
  6. Salespeople are able to personalize marketing content with the consent of marketing—with the proper business rules and approvals in place so it can be executed quickly. That allows the content to be relevant to the target audience or individuals. Christine Crandall, in Forbes in 2014, put that very well (as she always does): "Relevance is a table stake across the entire lifecycle of a seller-buyer relationship, not just when you are making the sale or answering a customer service question."

THE BENEFITS BY THE NUMBERS

Before I close, allow me to toss out some hard numbers so you can see the benefits from the left side of your brain.

An Aberdeen Group report in 2011 titled (echoing Peppers and Rogers) The New Power Couple surveyed best-in-class companies that had aligned sales and marketing departments and found these results: 91 percent of marketers understood sales goals; 73 percent of salespeople understood marketing goals; there was a 67 percent greater probability that marketing-qualified leads closed; marketing-qualified leads had a 209 percent stronger contribution to revenue; and 40 percent of the sales-forecasted pipeline was generated by marketing.

And here are some random results of sales-marketing alignment, with the sources in parentheses: 24 percent faster three-year revenue growth (SiriusDecisions); 27 percent faster three-year profit growth (SiriusDecisions); 36 percent higher customer retention rates (MarketingProfs); and 38 percent higher sales win rates (MarketingProfs).

The numerical picture painted here is that there are measurable significant benefits to aligning sales and marketing. But there is also one right-brain reason that maybe can't be quantified but is so obvious as to be almost painful: Isn't it always better when we get along?

So, marketing and sales departments, take heed and do what your colleagues are doing in other companies across the globe, with some regularity. Align yourselves now.

****

Stay tuned for part two of my previous column examining CRM's past and future ("Reimagining CRM, Part One," October 2015), a big topic we'll revisit in detail in an upcoming column.


Paul Greenberg is managing principal of The 56 Group, a customer strategy company. He is also the author of CRM at the Speed of Light, which is in nine languages and is currently in its fourth edition. He is the author of the upcoming Commonwealth of Self Interest, to be published in 2016.


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