Why sales & marketing are misaligned and what to do about it11 min read
“If marketing is to effectively support sales, then we need to start by getting everyone on the same page regarding what success looks like. If you don’t invest the time to align on the big picture, then don’t expect to move the needle when you look at lead quality and quantity”
— Jim Dickie, Research Fellow at CSO Insights
The Trillion dollar problem:
Sales and marketing misalignment costs a whopping $1 trillion a year. Decreased sales productivity and wasted marketing efforts being the main culprits. The upside potential is equally staggering in that highly aligned organisations realise 36% YoY revenue growth, vs. 7% revenue decline for the least aligned.
Highly aligned sales & marketing organisations deliver faster growth at a lower cost. However, our experience and studies shows that many B2B companies work in sales and marketing silos, without a clear and shared commercial strategy resulting in little or no communication between functions, misaligned processes and confusion as to how succes is being measured.
Here’s how we help our clients address these challenges and what you need to start doing today to reduce sales & marketing waste and accelerate commercial performance
Reason # 1: Lack of communication
It´s a common issue. Marketing and sales working in silos with a very clear separation of roles and responsibilities between the two functions. That is exactly how unsuccesful commercial organisations work. Successful commercial organisations have sales people working as micro marketeers by for example creating awareness through social media and marketeers actively supporting the sales process by for example taking part in creating the winning value proposition for a must win deal.
The key is collaboration around the customer buying process. This often fails for two reasons. (1) No shared understanding of the customer buying process and (2) No agreement on how to collaborate around the process.
The first step to address reason #1 is to facilitate the birth of a shared understanding of how you help customers buy more effortlessly, how the functions can support each other and to set clear expectations by the establishment of a Service Level Agreement between sales and marketing.
Reason #2: Lack of shared process
It´s a common issue. Marketing and sales working in silos with no shared meetings to assess strategy, performance, activities and decide on corrective actions for improvement.
Imagine a company’s operations function responsible for delivering the company’s product had 3 functions to make operations work. Procurement, Production, Logistics. It would be unthinkable that those three departments didn’t have regular meetings to assess performance in the whole value chain, assess the current operations strategy and decide on actions to improve. Best practice operations theory dictates that you look at the whole value chain to avoid sub-optimisation and deliver the most effective system.
For some reasons, this best practice is far from common practice in the commercial part of the organisation, although it would be equally valuable to operate sales and marketing in such a way.
The first step to address reason#2 is to set up a cadence between sales and marketing, consisting of an operational meeting (i.e.. how are we collectively performing, what is the outlook and what actions do we need) and strategy meetings (what structural changes do we need in our current approach for optimal growth).
Reason #3: Lack of shared KPIs
This one is a little controversial: Marketing are partly responsible for the conversion rate of sales opportunities. Yes, they are managed by sales but leads that are well nurtured have higher conversion rates. That´s a fact. Sales too have a responsibility in creating qualified leads by employing social selling tactics. We need shared KPI´s..
Of course the right shared KPIs will depend on the exact nature of your business but here is a few examples to get you started:
- Lead conversion rates
- Opportunity conversion rates
- Win rate
- Average deal size
- Revenue goal attainment
- Sales Cycle Length
- Sales growth
- Customer satisfaction through buying process
First step to address reason #3 is to establish shared KPIs for your commercial organisation and to make them transparent so everyone understand that you are all working towards one shared commercial goal; Creation of sustained profitable growth.
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