If you know anything about Sales and Marketing organizations, you know that they are often at odds. When business is booming, the scotch is flowing, the bell is ringing and it’s group hugs and high-fives all around. When business is in the crapper, the finger-pointing and blame games are more popular that Wii Bowling and lead to animosity and all sorts of unproductive behavior that gets in the way of success.
I recently taught a class for the Boston Start-up Institute to help new entrepreneurs figure out how to build Sales, Product & Marketing teams that work well together. (You can view the SlideShare here.) As I thought about how to frame the conversation for these bright-eyed newbies, I kept coming back to one word that is critical for success: ALIGNMENT.
In start-ups, alignment seems like it should be pretty easy, everyone marching toward the same goal, right? Not so much. Alignment is freaking hard. Big companies put zillions of KPIs in place to try to get everyone aligned. Small companies do the same thing and it doesn’t always work. Why? Because alignment requires maniacal focus on just a few high-priority things. Focus, people! You’ll always have 17 priorities and stuff that had to ship yesterday and new stuff that reshuffles the deck, but in order to gain alignment, you have to be ridiculously picky about your KPIs and, ideally, pick one thing. I believe that for all businesses that one thing is: REVENUE. The tactics are the tactics but, at the end of the day, without revenue, you have no profit margin, you have no ability to pay employees, you have no company. Customer Service, IT, Product, Sales, Marketing…they all deliver revenue. Some of it is about closing customers now. Some of it is selling the customer of the future. Some of it is keeping the customers you have now engaged and happy so they stay and keep generating…revenue.
Historically Sales & Marketing have not been aligned around revenue. Think about how these two teams are paid. Sales people know that if they don’t meet their sales goals, they can’t pay their mortgage or buy that new 7 Series or send their kids to summer camp. Marketing knows that if they don’t meet their marketing goals, they will still get paid, but will have to deal with a load of questions and crap from sales, C-level execs and board members. Both scary, but not so aligned.
What if your organization aligned itself around revenue? It’s the key to success and here’s how to make it happen.
1. Marketing as a profit center
In most organizations, marketing is set up as a cost-center. Spend, spend, spend. If there is a choice between cutting sales or marketing, the choice is clear. Marketing is the first budget and staff to get cut when the going gets tough because it’s discretionary and, most of the time, not tied directly to revenue. While marketing needs a budget in order to run the programs that generate awareness, leads, conversion, and all that great stuff, marketing needs to be organized as a revenue center. This shift is an important trend in sales and marketing organization and it makes a huge difference as to how sales and marketing align and build successful programs. Start each quarter with a cross-sales & marketing meeting to agree on the revenue goals for the quarter and then give each team the ability to define how they are going to achieve those goals. Create your revenue model based on what marketing will generate and what sales will generate. Skin in the game makes a big difference.
2. Hard-core data
I often hear marketers say: “I think we should run a campaign because ____. Typically, that fill in the blank is made up and has nothing to do with data. That’s just not good enough. Every budget dollar counts and needs to be tied back to revenue. Marketers need to be analytical maniacs. Instead of just proposing a new program, look at the success of the last program, build a model to forecast an A/B test of the new one, think like an analyst. Know your numbers. Having the right tools is key here and there are lots of them out there. Salesforce, SugarCRM, KissMetrics, Marketo, HubSpot, Wordstream and the many other data-driven solutions out there give marketers the ability to put finer points on conversion at all stages of the funnel and to build KPIs that tie to ROI and revenue. Marketing is becoming a data hub and driving business analytics through detailed metrics that affect the entire organization. As a marketer, you should be building teams of demand gen, quant and measurement linchpins who will help you drive better business decisions using data.
3. Comp models
Let’s face it. Sales compensation is the leading driver of getting to revenue. Sure, everyone in your company wants the company to be successful and has tons of passion and stays late for that big release, but when you’re talking about the teams that are filling the funnel and knocking them down, the right comp plans for the right groups will drive the behavior you want. Typically, marketing is not on commission. Marketers are usually not closing the deals at the end of the funnel. But, I am a big fan of variable comp plans for marketing teams. Why not incent your marketing team to drive toward the sales goal by building a variable comp plan they can earn as they generate revenue? Sales will act differently when they know marketing has a stake in the revenue plan. Also, consider how your sales people are compensated. Crappy comp plans = crappy sales people = crappy sales. Reward great sales behavior, both in closing the deal and retaining the deal.
4. Pipeline engagement
For sales, it’s all about building a strong pipeline and knocking them down. Marketing is often seen as the driver of the front of the pipeline – top of the funnel. But, what then? Once marketing and sales can start looking at the pipeline as a full funnel – top to bottom – both teams can work together to define the drivers of engagement and new ideas for campaigns, automation and other programs to keep leads hot and get them to close. I’ve often seen sales expect a marketing miracle to keep leads warm and get them to magically convert on their own. Don’t be so naive. Sales needs to share feedback with marketing about why customers aren’t buying, what messaging is working/not, when leads need to be touched or requalified and open communication is the key driver. All too often the pipeline grows cold because sales is spread too thin, or not properly incented, or too many leads are coming in the top, or sales is left to cherry pick what they want to focus on. Creating a sales method for pipeline engagement aligns sales and marketing around learning and refining programs to get ’em to close. Always. Be. Closing.
5. Collaboration
It seems to go without saying that collaboration between sales and marketing is nirvana but often feels like a slow burn in hell. Sales can bark orders and blame marketing and point fingers. Marketing can play the victim and make sales the enemy and slow roll programs into the sunset. Productive? Not so much. Laura Foley recently discussed the topic as it relates to sales presentations and PowerPoint decks and the tug of war she sees in her business between sales and marketing (and is credited for her awesome graphic above (thank you!) Sales people often just want sexy marketing programs to appear out of thin air, but without sales feedback from the front-lines, it’s all guessing and making assumptions on marketing’s part and, you know what happens when you assume anything. Sometimes marketing needs to take a backseat and listen when sales says a campaign didn’t work or when they identify what they see as a problem or issue with marketing. It’s hard, but necessary. Giving sales the space to talk openly can be constructive and ultimately help get to a better solution.
So, here’s to alignment and building a killer marketing and sales united front that rings the bell on success for the business. What have you found works to align your marketing and sales teams?
Happy hugging!