Sales/Marketing Alignment – 32% Sales Growth
As the uncertainty of Brexit looms, having a fully aligned Sales/Marketing team is even more crucial than ever before, especially for B2B based businesses, where the B2B buyer journey has become far more sophisticated.
Today, there is an average of 5.4 stakeholders involved in any given B2B sales process. Therefore, having a fully aligned sales/marketing operation is even more crucial at times of uncertainty.
- Sales/Marketing aligned organisations achieve an average of 32% annual revenue growth while less aligned companies reported an average of 7% decline in revenue1.
- Organisations with tightly-aligned sales and marketing had 36% higher customer retention rates and achieved 38% higher sales win rates2.
- B2B organisations with tightly aligned sales and marketing team achieved 24% faster growth and 27% faster profit growth over a three-year period3.
So here are my 8 key recommendations to develop a fully aligned B2B sales/marketing team
1. Develop a detailed Strategic Plan
Strategic planning is how an organisation defines its direction and the process it takes to implement and achieve this vision. Typically, this is about establishing your vision, based on your competitive advantage and at the heart of which lies your customer. Development of Strategic Plan
Once a strategic plan has been developed, focus on translating this into actionable breakthrough initiatives and change, ensuring you focus on 3 to 4 key drivers/levers for the business
Grow Sales revenue from x to y
Develop x number of new products for market segment
Improve operating profit from x to y
I have a particular preference for the Hoshin Kanri A3 planning approach that emerged as one of the key legacies of the lean six sigma movement. Convert strategy into reality
The real value of creating a plan lies in the logical thinking process that accompanies it, and in the creation of metrices. By having metrices will enable you to determine if your business is travelling in the right direction or not and, if not, then what to do about it
2. Develop a single unified plan for sales and marketing
Once you have developed your strategic plan and completed the A3 matrix, creating a single, unified sales and marketing plan will become easier. The plan brings tremendous advantages in ensuring that everyone is on the same page and facing in the same direction. (Marketing Strategy)
The plan must incorporate the usual revenue, cost and profit objectives and establish key areas for growth by market segment, product, international expansion and investment. The A3 matrix and the strategic plan will help you and the team to focus on your strategic goals.
3. Develop customer profiles
Sales and marketing teams often use completely different prospect profiles.
Get your sales and marketing leaders to compare both sets of current profiles against what you know – based on intelligence gathered from your marketing and sales systems – about your best (and worst) customers. What traits really define a long-term or exceptionally profitable relationship? Which ones could serve as a warning that some prospects might consistently present challenges?
Also encourage them to review the win/loss analysis. It is just as important to understand why you have won a business, as is to understand why you lost a particular opportunity
Armed with this knowledge, you can proceed to build a single, mutually acceptable set of prospect profiles.
4. Develop a common sales/marketing funnel
An integrated revenue funnel helps each team understand what the other team is doing, and how their actions impact revenue. This also requires having a common language and terminology. A common sales/marketing funnel also provides common language and metrics, which is especially important for defining when a lead is qualified and/or ready to be handed over to sales.
Many businesses view the pipeline as a function exclusive to the Sales team. As per above having accountability to both the team for the growth of the pipeline will result in delivering growth. Many of the steps that we described i.e common definitions, shared metrics, SLAs – are far more useful when your company treats its sales and marketing pipeline as a single, continuous process. Both teams will still have distinct responsibilities, from prospecting and qualifying at the top of the funnel to closing and maintaining relationships at the bottom, but with a single pipeline they’ll also understand how each stage in the process works and why each is important to the business.
5) Define a clearly stated hand over process/service level agreement
The sales and marketing teams will benefit from agreeing and documenting a mutual service level agreement that establishes common definitions for the key stages in the revenue creation cycle (sales funnel), as well as establishing how the two functions commit to work together to move prospects from stage to stage in the process. It incorporates clear definitions for the key stages in the customer acquisition and retention process – from initial research and targeting through to prospecting, qualifying, closing and subsequent account development.
A document that has a clearly stated an “Ideal Prospect”, a “Marketing Qualified Lead”, a “Sales Accepted Lead” and a “Sales Qualified Opportunity” and so on, will ensure both teams know where the handover process needs to be and who is responsible for which element of the funnel
Focus on quality
These definitions help to prevent leads and opportunities from being thoughtlessly “thrown over the wall” from one function to the other without sufficient attempts to qualify them. They also place a strong emphasis on quality over quantity, to the benefit of everyone engaged in the process.
Agree mutual responsibilities
The service level agreement must document what the sales team commits to do with appropriately prequalified leads and opportunities when they are received from marketing. At minimum, the SLA needs to document how feedback will be provided, and within what timeframe.
Use feedback to improve the process and eliminate friction
The insights from the feedback loop that is embedded in a sales and marketing service level agreements, are invaluable in diagnosing and dealing with constraints and bottlenecks in the revenue creation process.
Develop a process of continuous feedback and the improvement in the lead generation process, so that both teams can learn from each other. This can be done in the form of daily/weekly/monthly review meetings.
The meetings must focus on the quality of the data, to see how well leads are performing. This can help to fine tune lead generation efforts, and is an important way to take qualified prospects that are not yet sales ready and recycle them back into marketing
6. Develop an integrated Sales and Marketing Metrics
The single most important metric of sales and marketing alignment is revenue growth. Therefore, at each stage of the funnel there should be clearly defined targets for both teams
Sales and marketing alignment only works if leaders and staff in each department communicate openly, therefore having a visual board with clearly stated metrices will encourage open communication in both the teams. Eliminate the blame game and independent reporting to foster mutual respect for each function’s role and activities
7. High-Quality Data
Garbage in, usually means garbage out, and it’s going to be challenging to align sales and marketing if you don’t have access to high-quality data on all aspects of both sales and marketing.
Data becomes significant in two areas in particular. First is the quality of your prospect and customer data in either your CRM or marketing contact database. If this information is accurate, your targeting, nurturing, personalization, segmentation and ongoing communication is going to be highly effective at moving your prospects and customers along in their buyer journey.
Bad data results in misdirected, inefficient and ineffective marketing and sales programmes.
The second is performance data. You’re going to need to know in detail how your marketing tactics and sales execution is performing if you’re working on improving it. Simply put, this means knowing the conversion rates at each stage of your sales funnel process.
A data quality strategy must, therefore, address the information requirements at every stage in the revenue creation cycle – and make it clear who is responsible for the completeness, accuracy and timeliness of each aspect of the required information.
8. Implement Incentives and Reward Systems
Sales and marketing function must be focused and rewarded on the actions that generate results. This requires an incentives system based on an outcome that reflects their true contribution to the organisation’s overall sales growth objectives. I see many times that marketing teams are rewarded on activities that generated leads, however if those leads do not actually result in delivering sales growth or the impact it has on pipeline value and revenue performance, then its futile to reward them. I would recommend a system that is shared between sales/marketing based on fully defined matrices (e.g. sales/margin growth)
Sales and marketing teams have interactions with customers at different points of the customer journey. This makes it imperative that there’s consistency in content, message, tone of voice, experience, from the top of the funnel right through to the person becoming a customer.
The research data from many independent organisation, as per stated above makes it very clear. Organisations that have well-aligned sales and marketing teams outperform their competitors.
The benefits are obvious, so perhaps it’s no wonder that “achieving better sales and marketing alignment” is a one of the top strategic initiative from many B2B CEOs/MD. But turning that strategy into reality requires a clear focus and disciplined execution.
If your company lacks alignment between sales and marketing, the first step is to figure out which factors contribute to the problem. After you identify causes, develop a game plan to reorganise in a way that promotes, supports, and rewards a more collaborative approach.
Track and measure your results. If you don’t measure it, you can’t improve it, and continue to evaluate your alignment success and adjust strategies when necessary to achieve the noted benefits.
Rakesh Shah RVR Management has over 20 years’ experience of working with the CEOs and executive teams of high-potential B2B-focused organisations. He is MBA and CIM qualified, with a background of delivering growth within a range of B2B sectors and offers a range of business tools and support services that deliver results.
Contact Rakesh 0778 555 8344