Every company struggles to keep its sales and marketing efforts aligned – some attain alignment only to lose it as people and priorities shift. Over the years a number of studies have found that over half of all companies list sales and marketing alignment as one of their top operational goals, yet an overwhelming majority of them also ranked it as their top challenge.
Telltale signs of misalignment can be seen in industry statistics: 80 percent of leads passed on to sales are dropped; 90 percent of collateral is unused; and the total cost of winning a net new enterprise customer via direct sales carries a hefty price tag averaging $500,000. Even worse, fully 80 percent of deals won are not influenced by marketing at all. Why is alignment so elusive? And once established, why is it so hard to preserve?
At the root of the problem is the fact that marketing and sales have their own charters, different planning time horizons, and compensation models.
Sales' focus is on the here-and-now; they are the face of the company responsible for bringing in revenue. Marketing, on the other hand, focuses on goals that may be years away. It determines which segments to target, how best to position the company, what programs will build mind share, increase market share, overcome customer objections, and deliver quality leads to sales. These core differences make clear why the two groups are frequently at odds. Yet neither can succeed without the other.
The first step in alignment is recognizing these differences and incorporating them into the company's operational philosophy. For sales and marketing to become aligned, and stay aligned, several things need to happen, namely companies need to develop the right perspectives, compensation drivers, cooperative work methods, and integrated processes.
There are three stages to aligning sales and marketing: Ambiguous, Collaborative, and Aligned. Sales and marketing leadership need to recognize where their relationship stands and then work to advance to the next stage. Most companies start out in the Ambiguous stage, reaching the Aligned stage is realistic and attainable for any company. The motivation comes when understanding the positive impact alignment can have on revenue and profitability.
Ambiguous is the most conflict-riddled and unaligned stage. Sales and marketing focus on their own tasks and are, intentionally or unintentionally, unaware of what the other is doing or trying to achieve. If there is any collaboration at all, it is ad hoc. To move to the Collaborative stage, both groups need to understand and accept that their relationship is not a zero-sum game. Their respective roles must be defined and documented along with the specific rules of engagement and hand-off points that guide their collaborative relationship. The rules of engagement need only be done for key tasks such as marketing lead scoring, sales lead follow-up, and revenue cycle conversion calculations. At this stage CRM, lead management/revenue cycle and marketing automation technology can make a significant contribution to institutionalizing the new processes, vocabulary and behaviors.
Moving to the Aligned stage requires refining the structure of the relationship to include the company's investment rationale and each group's performance metrics. And because the structure carries compensation-related consequences, both the CEO and CFO need to champion it.
In the Aligned stage sales and marketing establish precise boundaries and interaction points. Their communication becomes more frequent and disciplined as evidenced by joint staff assignments and defined liaison roles. Sales and marketing still focus on their own tasks, but they collaborate more often on key activities.
What differentiates the Aligned stage is that both groups achieve significant transparency with one another and with the rest of the organization. They jointly plan how to respond to market dynamics and internal capabilities. This means clearly defining when, and with whom, to communicate on key actions. They also jointly develop marketing plans, participate in product planning, and meet regularly to review programs and results to determine strategic adjustments.
Marketing takes an active role in sales through customer visits, sales support, and managing customer references. It supports the sales cycle with embedded field marketing, sales enablement, and customer advocacy. Marketing's compensation structure is directly aligned to the company's goals for revenue, renewal rates, and customer satisfaction. Companies that institutionalize alignment see blurred organizational boundaries as well as team systems and rewards. Annual planning is done jointly. Each has a voice and vote in the other's metrics, goals, and execution plans, including setting revenue targets, customer assessments, and value proposition development.
The clearest evidence of an aligned company is the nature of the conversation between sales and marketing. In the Collaborative stage the conversation continues to reflect the power struggle between the two groups. Often, especially when times get tough, the battle over lead quantity and quality takes over all conversations, formal and informal.
In Aligned companies the conversation is centered around what is happening in the market, what worked and what needs to be changed to meet the company goals. There is no blame game because everyone is focused on realizing the company goal instead of achieving their departmental objective at the expense of others. The 'bad lead' discussion is recognized for what it is – cancerous.
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