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Aligning Sales and Marketing to Drive Revenue
June 30, 2008
If Sales is from Mars and Marketing is from Venus, can they both still successfully collaborate?
By Phil Fernandez
The chasm between sales and marketing seems as old as time itself and is often grudgingly accepted as an irreparable inconvenience in business. Yet, as the Internet and Web 2.0 transform the B2B buying process, aligning the estranged departments has never been more critical to business success.
The Origin of Different Species
Is it simply that the sales animal and the marketing animal have different DNA? Perhaps, but the inherent dissimilarities are intensified by a number of factors on which marketing and sales differ—including timeframes, goals and ways of showing value. While marketers look months and even years down the road as they seek to develop a brand and grow broad interest in their company, sales is laser-focused on hitting their numbers for the here and now. Each role meets a distinct and valid business need, but these contrasting views lead to conflicting perceptions of what contributes to overall success.
Minding Gaps: Aligning Sales and Marketing
Sales needs leads from marketing to help them hit their numbers, but if the quality of the leads is questionable, the gap between Sales and Marketing will only widen. The quota-driven focus on the present requires that sales leads be ready and qualified here and now, not sometime down the road. This need explains two of the key components for beginning the sales-marketing alignment process: creating a common definition of a "good" lead and using lead nurturing and using lead scoring to ensure that only leads that meet this definition are handed off to sales. As in repairing any relationship, the first steps are communicating and developing trust. When Marketing sits down with Sales and asks for the definition of a good lead and how best to deliver the leads, the dynamic between the two departments changes. With the definition of sales-ready in hand, Marketing can begin rebuilding trust by delivering leads that meet that standard.
Marketers can use lead scoring and lead nurturing to ensure that all leads meet the arranged quality standard before being passed to sales. With lead scoring, leads earn or lose points based on their demographic characteristics and behaviors. For instance, a lead might lose a point for not having the ideal job title, but gain points by reading white papers and frequently visiting a company's product pricing page online. When a lead reaches a predetermined threshold or exhibits specific behaviors that indicate sales readiness, the lead is then handed to sales.
For leads that show initial interest, but do not yet meet the qualifications of a "good lead," lead nurturing must be implemented to foster a relationship with the prospect and move it closer to sales. Eighty percent of buyers now report that they found a vendor first, rather than that the vendor reaching out to them. This indicates that buyers are beginning their search process much earlier, which only serves to expand the distance between marketing and sales (in the prospect’s eyes, at least). Lead nurturing fills the time and space between initial search and readiness to buy and ensures that a brand stays top-of-mind with potential customers. Equally important, lead nurturing can be used to recycle and revive old leads when they do not result in immediate sales wins.
Marketing Impact: Measure for Measure
Sales is seen as a revenue driver because sales operates in terms of positive numbers. Yet in order for marketing to align with sales and impact business as a revenue driver in its own right, marketing also needs to measure itself based on positive numbers and revenue in the door.
When marketers speak about budget and funding, their work is too often framed in terms of cost and spend, rather than impact on a company's bottom line. For example, the common marketing metric "cost per lead" frames the results not in terms of revenue or growth, but as a cost.This is a recipe for a lower marketing budget, and worse, without a clear and agreed upon definition of a lead, the metric is meaningless as well.
In addition to working with sales to define the characteristics of a "quality lead," Marketing needs to create common company-wide vocabulary that clearly relates the stages a lead goes through and how far each is from sales. When marketers know sales goals for three, six and even nine months down the road—and exactly what it takes to move leads to sales—they can work backwards to develop their own quotas. This way, marketers can collaborate more effectively with sales and clearly and quantitatively answer the question: "What is marketing doing today to deliver on sales targets and generate revenue down the road?"
This numbers-focused approach to marketing also eliminates uncertainty around budgeting issues. When marketing activity is clearly tied to revenue, the decision is no longer about budgeting 1.5% or 5% of revenue for marketing. For a revenue-driven marketing department, a company should allocate the amount needed for marketing to hit its numbers so that the sales teams can hit theirs. Marketing spend should be exactly what is required—no more, no less.
With these measures and activities in mind, marketing and sales can align to work as friends—not foes—in order to drive revenue more effectively.
Phil Fernandez is President and CEO of B2B marketing automation company, Marketo. He can be reached at pfernandez@marketo.com.
Sales & Marketing Management Magazine
This article is brought to you by Sales & Marketing Management, the leading authority for executives in the sales and marketing field.
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