Marketing and Sales Alignment – 5 Steps to Get it Right
The relationship between marketing and sales is so crucial to a company’s success yet it is often less than ideal. In my company, we get to work with a fair number of CMOs and CSOs and while they are usually great at their individual jobs, they need to work together well to drive the revenue machine. I have written and spoken extensively on this topic, including a white paper titled: Bridging the Gap Between Sales and Marketing.
While there are many good reasons to pursue tighter marketing and sales alignment, perhaps the most important are economic. A recent ZoomInfo article by Rachel Martinez opens with three statistics that highlight the value of alignment:
- Organizations with tightly aligned sales and marketing functions enjoy 36% higher customer retention rates (source: Marketing Profs).
- Aligning sales and marketing also leads to 38% higher sales win rates (source: Marketing Profs).
- B2B organizations with tightly aligned sales and marketing operations achieve 24% faster three-year revenue growth and 27% faster three-year profit growth (source: SiriusDecisions).
These statistics comport to what I have seen with my career and with my clients. Those that align have much more revenue-generating power and those that don’t align always suffer negative consequences. CEOS that allow dysfunctional behavior from either department are doing a great disservice to their organizations.
How do you turn a lack of current alignment into future revenue growth enlightenment? Here are five proven strategies:
- Assume goodwill: If your counterparts in the other department do not respond the way you prefer, understand that this is because they have different metrics and motivations. In other words, they are acting in a way that reflects their intention to complete their mission successfully, just as you are doing with your own mission.
- Balance short- and long-term needs: The sales department usually lives and dies by its ability to achieve quarterly revenue quotas. By contrast, marketers are often focused on longer-term objectives like branding and lead nurturing. The awareness and inquiries they generate this quarter may not turn into revenue for some time but the foundation they are creating will make it much easier for sales to make its numbers downstream.
- Create a service level agreement (SLA): Unstated expectations can be a source of friction between marketing and sales. Marketing may perceive that it is doing its job based on an “understanding” of what the sales team needs to hit its revenue targets. But these so-called understandings often lead to painful discussions at the end of the quarter if results fall short. The SLA should contain a few essential items:
- The quantity of qualified leads to be delivered over a specific time period.
- The attributes of qualified leads (e.g. interest level, time period, access to decision maker)
- How leads are followed up and distributed (e.g. lead qualification process).
- How the marketing department’s contribution to revenue is to be measured.
- Adopt a lead-to-revenue framework (L2R): As I stated in my recent Forbes article, “The lead-to-revenue framework synchronizes people, processes and technology in a manner that optimizes every part of the end-to-end process to achieve greater amounts of (profitable) revenue, reduced sales cycles and higher close rates. All marketing and sales activities are included, including steps to drive awareness, generate and nurture leads and facilitate every aspect of the sales cycle. A major point is that none of the individual metrics are valued unless you achieve the macro revenue and profit KPIs.”
- Create alignment around the new buying funnel: The following graphic from Marketo shows the dramatic shift of the buying process over the past decade(s) as many of the steps once firmly in the camp of sales have now transitioned partially or fully to marketing. This adds to the burden of the marketing team, but also represents a crucial opportunity to achieve higher close rates and shorter sales cycles. The latter is true because while the buyer journey may last as long, by the time the buyer engages with a sales rep, he/she is much closer to a purchase decision.
If your existing buying funnel looks like the “then” model, it is probably time to change it to the NOW funnel. If you have no lead-to-revenue model or SLA in place it is likewise time for a change. And if you are a marketer that can’t quantify how you contribute to revenue, it is definitely time for a change. All of these things can bring you better marketing and sales alignment and stronger results. This is a great time to start.
- Nine Ways to Grow Your B2B Business in Challenging Times - March 25, 2020
- Align Marketing and Sales to Streamline the Buying Experience: 4 Imperatives - March 10, 2020
- Why a Fractional CMO Can Be Your MVP - February 24, 2020