There are dozens of webinars, seminars, research reports, whitepapers, and blog postings on the topic of sales and marketing alignment. Despite the endless flow of resources and suggestions, sales and marketing alignment continues to elude many organizations.
Misalignment is often a byproduct of a lack of process and a natural result of traditional marketing and sales roles. Think about it — sales is perhaps one of the most measured functions in an organization. In sales, performance is measured by tangible results, and a lack of performance is cause for immediate and unquestioned dismissal. Contrast that with marketing, which is perhaps one of the most difficult functions to wrap tangible measurements around, and therein lies the challenge; we expect the most measured function and the least measured function to work seamlessly together.
The epiphany for many organizations comes at the moment they realize the “traditional roles” of sales and marketing make the functions pre-disposed to operate independently. Many marketers are measured by the number of leads that are passed to sales, while sales is measured by the number of closed deals. The gap widens when there is no common understanding of what constitutes a “lead” between each function. As a result, marketers continue to meet objectives by tossing unqualified opportunities over to sales, and sales reps ignore these leads and independently create their own best practices for prospecting opportunities. Unless organizations make a concerted effort to align sales and marketing, time will only drive the functions apart until performance makes the issue very visible to the CEO or shareholders.
Albert Einstein once said “the definition of insanity is doing the same thing over and over again and expecting different results.” Despite all the resources that exist on the topic, many organizations get overwhelmed by the concept of aligning sales and marketing and never actually take steps to change the situation. They stagnate and continue to execute with sales and marketing at odds. In the meantime, competitors are capturing market share and growing revenue as a result of better sales and marketing execution.
Over the last two years, Aberdeen has conducted a half dozen research studies on the topic of B2B sales and marketing execution. Each of these studies has helped identify and develop best practices for aligning sales and marketing. The eight steps below demonstrate essential steps every organization can take, today, to start aligning sales and marketing.
1. Start Using ‘We,’ Stop Using ‘They’
As obvious as it may seem, sales and marketing alignment starts with a cultural change. I once had an interview with the CEO of a midsize high-tech organization who told me a great story about how he changed the culture for his organization. He was having issues with sales and marketing taking accountability for performance. Each function blamed the other for not meeting targets.
The CEO held bi-monthly pipeline review meetings with the VP of sales and the VP of marketing. During one of these meetings he said, “We’re going to start a little competition at this organization. I want each function (sales and marketing) to stop using the word “they” to describe the actions of the other function. We execute together as a cohesive organization and therefore “we” need to take accountability for execution. Each time I hear either of you or anybody in your respective functions use the word “they” to describe sales or marketing, I’m taking budget away from that group and moving it to the other group.”
This became a fun quarter-long competition between sales and marketing in the organization. Most importantly, it drove a top-down approach to sales and marketing alignment. Sales and Marketing started taking joint accountability for performance within weeks. Alignment starts with a company wide commitment that together we stand, divided we fall.
2. Standardize Definitions
Perhaps the No. 1 biggest impediment to sales and marketing alignment is a lack of standardization for defining the different stages of the buying cycle. It doesn’t matter what terms are used: Raw Lead, Inquiry, Marketing Qualified Lead, Sales Qualified Lead, Sales Ready Lead, Sales Accepted Lead, etc. What is important is that marketing AND sales share the SAME definition for each of these terms.
Ultimately, sales should determine what constitutes a “qualified lead,” and marketing should take ownership of educating and influencing prospects to the point they are “qualified” and ready to have a meaningful discussion with sales. Eighty-six percent of marketing departments in superior performing organizations qualify leads before passing them to sales. Likewise, 73 percent of these superior performing organizations share the definition of a qualified lead between sales and marketing; versus 38 percent of all others.
3. Marketing Needs to Take Accountability for Influencing the Buying Cycle
There are a number of different ways to classify the phases a prospect enters between identifying a problem and purchasing a solution to address the problem. I like to separate the buying cycle (attention, interest, desire, action) and the sales cycle (when a prospect becomes a qualified opportunity and is ready to have a conversation with sales).
I believe marketers should take full ownership of the buying cycle. Marketing material and campaigns should be structured to address each phase in the buying cycle and help educate and influence prospects. Ultimately, marketing should be leveraging lead nurturing campaigns to educate new prospects, so sales is not wasting time talking to leads that are not ready to buy.
More importantly, a separate lead nurturing program should be set up by marketing to nurture prospects who may have entered the sales pipeline but, for whatever reason, chose not to purchase. These individuals need to continue to be marketed to so potential opportunities don’t fall through the pipeline.
4. Increase Quality and Decrease Quantity by Scoring Leads
Lead management technology has transformed the way B2B businesses interact with prospects. Technology can help identify a prospects propensity to purchase based on behavior (visits to a Web site, registrations to webinars, whitepaper downloads, etc.) and automatically assign numeric scores. This allows sales to focus limited resources on the best opportunities.
This is a win-win for sales and marketing because sales will increase the number of closed opportunities and marketing will have a measurable way to justify their direct impact on the top of the sales pipeline. In essence, organizations should be focusing on the quality, not the quantity of leads that are passed from marketing to sales.
5. Integrate Sales and Marketing Technologies
Integration between marketing technology and CRM has emerged as a critical component to aligning sales and marketing. Both functions share critical data the other can use to increase effectiveness.
Superior performing organizations are starting to link disparate marketing systems (email marketing, Web analytics, lead management) to CRM to build a comprehensive 360-degree view of the customer. By integrating CRM and marketing technology, reps can gain a comprehensive view of how marketing interacted with an account. Did they get an email campaign? Which one? Did they click on the email? Did they visit the Web site? Which pages?
You never want sales reps logging into a marketing automation system. The goal is to deliver value to reps in the vehicle they are most accustomed to using on a daily basis: CRM. For this reason, integration is critical to empowering sales and marketing with data that both functions can use to increase effectiveness.
6. Set Up Periodic Meetings Between Sales and Marketing
Sales and marketing should be meeting on a periodic basis to review successes and failures. Alignment means both functions are working as a team, so if processes or practices are not yielding expected results, something needs to change.
Seventy-three percent of superior performing organizations sales and marketing departments meet periodically to review performance. Both functions need to be open to feedback about what might work better in the future, and ways they can help each other be more effective.
Marketers can learn a lot about how to develop more impactful marketing materials from a simple conversation with sales, and sales leaders must understand how marketers are positioning the products and services in the market.
7. Measure What Matters
Measurement is probably one of the most important components to aligning sales and marketing effectiveness. How can you improve if you don’t know where you’ve been, and how do you know where you’ve been if you don’t have measurement?
There are a few basic measurements that ever organization should be looking at: lead-to-sales conversion rates, pipeline thickness, number of new opportunities, bid-to-win ratios, revenue, marketing spend, etc.
However, research has revealed that top performing organizations are able to take measurement a step further. In fact, highly competitive B2B organizations are three times more likely than all others to measure customer profitability, customer lifetime value, cost per lead, conversion by campaign, and the percentage of leads that are sent back to marketing from sales. These metrics allow the organization to understand how much to spend on marketing to acquire a new customer and more importantly where to spend those dollars to acquire, retain, and up-sell to prospects and customers.
8. Allow Sales to Pass Leads Back to Marketing
If sales and marking are aligned, then there needs to be a way to pass leads seamlessly between both functions. Sales need to be able to pass leads back to marketing for further nurturing if an opportunity in the pipeline suddenly goes cold. Marketing needs to develop separate lead nurturing programs to address the unique needs of a pre-qualified leads that are not yet ready to purchase.
These are real revenue opportunities that all too often fail to be harvested by organizations.
These eight simple steps will offer B2B marketers a competitive advantage in this tough economy. There are fewer real opportunities in the market today, and organizations cannot afford to leave stones unturned from misaligned sales and marketing efforts. Think about how many of the aforementioned steps are process oriented; very few require significant investments or additional resources.
Ian Michiels is a research director and the practice leader of the Customer Management Technology Group at the Aberdeen Group. He can be reached at [email protected].