“Highly aligned organizations achieved an average of 32% annual revenue growth – while less well-aligned companies reported an average 7% decline in revenue.” – The Aberdeen Group
In Aligning Sales and Marketing Strategy: The Customer Value Imperative we described an organizational design and alignment that puts customer value at the center of the universe and aligns all its functions towards creating, delivering, and realizing customer value.
Organizational alignment between sales and marketing is critical for every customer-centric organization. It’s necessary not only to drive business efficiency and productivity but also to deliver consistent and high quality customer journeys across all touch points. Too often we see organizations – both large and small – struggle to attain alignment. The larger the business, the worse it gets. As the business grows and evolves, as markets change, as competitors react and as new technologies emerge, the problem with sales and marketing often reaches crisis proportions. More than a few CEOs deal with this conflict by hiring a new CMO – someone who is more likely to follow the lead of the sales department. This is a costly mistake, and is repeated so often, we won’t go into it here. What we’ll do instead is dig deeper into how alignment is achieved and continuously synchronized between marketing and sales.
What is the the right level of alignment? Clearly getting aligned is not a one time exercise but an ongoing process. In this post we’ll go further and identify the four operational building blocks for aligning sales and marketing:
- Structure, and
It all begins with strategy. Business strategy is the starting point for building alignment between sales and marketing. Senior leadership, usually led by the CEO, define business strategy. This business strategy must be an interactive process that is both top down and bottom-up if it is to be effective.
Consequently, sales and marketing must establish quantifiable goals and objectives in support of business strategy. For example, for a growth-oriented SaaS company, key revenue goals must be centered around driving new customer acquisition, expanding wallet share from existing customers and minimizing churn rate for existing customers. Sales goals and objectives must then reflect how these three goals are accommodated in the sales quota and design of its coverage model.
Some businesses make the mistake of using strategy to drive sales targets and then ask marketing to support those targets. This is not only unproductive, it is a flawed view of how strategy works. Further, most companies don’t have a unified or common understanding of the customer value cycle in their industry.
The right way to develop your business strategy is to start with customer needs and your value mission.
- What is our winning aspiration?** Our value mission?
- Where will we play?** How do we design our products and solutions to deliver customer value?
- How will we win?** What makes us different? Better? How will we communicate our value?
- What capabilities must be in place?** Where do we start?
- What management systems are required?**
- What specific goals and objectives for marketing and sales help realize our overall business strategy?
- What are some short-term business objectives? How does marketing support those objectives? How does sales?
- Is there a target for contribution from marketing to sales pipeline?
- Is there equitable distribution of sales quotas?
- What does success look like? How will it be measured?
[** see Playing to Win by A.G. Lafley and Roger Martin]
The internal capabilities of your business will ultimately decide whether you win or lose in the marketplace.
The marketing group must possess (or outsource) the following capabilities:
- Market Segmentation: How to target the right prospects most receptive to your products and services
- Persona Mapping: Building accurate profiles of different buyer types in order to create superior experiences
- Content Marketing: Delivering the “right content at the right time” – based on persona mapping
- Campaign Management: The design and execution of effective marketing campaigns to reach the right prospects
- Buyer Journey Optimization: Creating superior “customer experiences” as part of the buying process using actionable customer insights, content and positioning
- Contact Data: The prospect and buyer data used to reach the right people at the right time
The sales group, similarly, must have the following capabilities:
- Coverage Model: the deployment of sales resources and partners to best cover the target market
- Territories: The accounts assigned to different sales reps in the target geographies in an equitable manner
- Sales Methodology: Using a selling methodology that reflects how the buyer wants or prefers to be sold
- Sales Process: The most efficient and effective process to engage and convert prospects into buyers
- Sales Enablement: The sales tools and technology used to efficiently drive prospects to convert
- Sales Training: The ability to maximize the productivity of the salesforce
- Will our current capabilities allow us to effectively meet our organization’s goals and objectives? If no, what is missing, and how can we develop them?
- Do we know our buyers, why they buy and how they buy?
- Are our marketing and sales strategies aligned with our buyer personas?
- Is our sales organization operating at an optimal level of productivity?
- Is our buyer journey optimized? How does it compare to our competitors?
- Is marketing able to influence overall sales pipeline size, deal size, deal velocity and win-rate across all territories, product lines and coverage segments? Are we able to measure it?
- Is marketing able to effectively use content and customer data to optimize buyer journeys?
- Do we have established and efficient work-processes to support both inter and intra-organizational capabilities?
- Are we able to effectively leverage technology to drive both efficiency and productivity of marketing and sales?
The organizational structure and the roles and responsibilities of both sales and marketing must be defined clearly. Additionally, all roles must be filled with people that have skills aligned to the competency requirement of the organization. Finally, the compensation plan design must drive the desired behavior from all roles. For example, an organization looking to drive revenue growth through new customer acquisitions will need sales reps with established track records. On the marketing side, the emphasis will be on driving demand from prospect accounts with a clear division of responsibilities between all participants.
- Does the structure of our marketing and sales organizations align with our capabilities?
- Do we know what competencies are needed for our organization?
- How are these competencies reflected in different roles? Have we created clear definitions of roles and responsibilities?
- Do we need to outsource capabilities we don’t have in-house?
- Do we have a culture of accountability?
- Are we adequately staffed?
- Do we have the right people in the right roles?
- How does marketing ensure all sales territories and sales groups are served equitably?
- How does marketing support the needs of sales?
- Is there a clear set of marketing-owned and marketing-supported tools used by sales during the sales process and during prospecting activities?
- How is performance measured?
- Does the compensation plan drive the right behavior?
- How do we attract and retain top talent?
Sticking to a well-defined cadence involving planning, metrics and business reviews is critical for delivering consistent performance. Well-aligned marketing and sales organizations follow a joint-planning exercise in which each sales territory leader works with marketing at the start of a new year (and quarters) to identify and agree on a demand-generation plan. The cadence also involves quarterly and monthly touch points to determine the effectiveness of existing marketing campaigns/programs as well plan new ones. In addition to joint-planning sessions each organization must also schedule timely business reviews to constantly monitor and measure progress and take necessary corrective actions.
- Are we able to consistently meet or exceed our stated organizational goals?
- What is the annual planning format for marketing and sales? How does the interlock of goals and objectives happen?
- Who is responsible for marketing and sales annual planning?
- Does marketing have a seat at key sales planning or sales review meetings?
- What is the involvement of marketing during territory and account planning by sales?
- Do we set targets for key marketing and sales metrics?
- Who is responsible for marketing and sales analytics?
- What is the format of inter and intra-business review meetings?
- Are these review meetings action-oriented? Who manages action planning?
The point of all of this is performance. Without alignment on both strategic and tactical levels, sales and marketing will not be able to work together effectively. Companies that choose to make alignment a priority will see a significant impact on revenues and profitability. Too often companies fail to bridge the gap between intention and reality. There are no shortcuts. The blueprint (above) actually works. Good luck and best wishes on your journey.
Javed Matin is an independent management consultant helping B2B companies accelerate revenue growth through sales and marketing optimization. Over the past twenty years, he has developed global sales operations programs, training and effectiveness audits across multiple industry sectors.