The Key to Sales and Marketing Alignment: Communication
Sales and Marketing Alignment
Lack of sales and marketing alignment — often called “smarketing” — isn’t a new problem. While it should be obvious that both sides are after the same goals, these two departments tend to pull against, not with, one another. The relationship between the two is often contentious, with each misunderstanding and not trusting the other.
Alignment of the sales and marketing teams disrupts the status quo and rewards organizations in a big way. A recent research piece conducted jointly by Marketo and Reachforce found that businesses are 67% better at closing deals when sales and marketing work together.
Aligning your sales and marketing departments isn’t just about internal cohesion, either. According to Hubspot, when sales and marketing teams work together, companies see 36% higher customer retention and 38% higher sales win rates. And companies with good smarketing practices in place generated more than three times as much revenue from marketing efforts as companies without.
Creating a culture where sales and marketing combine their efforts to accomplish company goals isn’t out of reach.
How can your organization achieve it? There are four key points in building a cohesive, aligned sales and marketing strategy that increases productivity and delivers results.
Sales and Marketing Alignment Starts with Communication
The leadership of a company drives the attitudes of its teams. If the Sales Director diminishes marketing’s contributions, the salespeople will, too. If the Marketing VP deems sales lazy or unwilling to get behind important lead-building initiatives, the marketing team will tend toward the same opinion.
Uniting the two means the company leaders must change not only the team members’ mindsets but probably their own, too. Pent-up animosity, apathy, and distrust make this challenging. That’s why it’s vital for the managers’ superiors to involve themselves in creating stronger relationships between the departments.
A successful alignment strategy requires that leaders of both departments find common ground and respect. While the day-to-day initiatives differ, the overall goal is the same — achieve more leads, close more accounts, and increase revenue and profit.
The leaders must find ways to move toward these goals, appreciating each department’s role in the success.
two circle charts showing that organizations with highly aligned marketing and sales have higher customer sales and retention rates
Understanding and Communication: Building Trust
Sales need to be able to trust the leads that marketing provides through inbound strategies and other channels. Marketing must believe sales work the leads it generates to the best of their ability. But how do they know if they never talk to each other?
Lack of communication is costly to the company both in real and potential dollars. Alice Heiman, Founder and CSO at Alice Heiman, LLC, gives an example of where a lack of communication wastes money. “Sales requests some collateral as a leave-behind for clients. Marketing doesn’t ask a single question and produces spiral-bound, beautifully printed books that cost about $10 each. Not at all what sales wanted. The collateral sat under their desks for months until finally they were thrown away.”
An online survey conducted by ToutApp revealed that 70% of marketing professionals want to meet with the sales team more frequently, and of those who met more often, 90% deemed the meetings “effective” at improving marketing outcomes.
Real conversations that consistently produce results are the best way to increase sales and marketing alignment. Attending meetings together, working on common lingo, and understanding each person’s values is the foundation on which a successful alignment strategy is built.
Unify the Vision of Sales and Marketing
Alignment won’t happen without the realization that both teams are working toward the same big-picture goal. Showing return on investment (ROI) for trade shows and advertising campaigns, successfully rolling out new products, developing new markets, closing sales faster, and increasing revenue are all goals that sales and market share.
The responsibility of unifying sales and marketing so they function together rests on everyone involved. Top management down to the new marketing assistant needs to keep the goals at the top of their minds.
A huge school of sardines packed together. Scientists call this behavior “bait ball”. The fishes stay together to escape the attack of predators like sharks, dolphins, and other sea creatures.
The broad goals of an organization need to be discussed consistently, and each person must understand the part they and everyone else play in making it a reality.
Another key factor in marketing and sales unification is winning together. By sharing in the successes, the two former combatants start building a common appreciation of and respect for one another. Once this happens, big things are on the way!
Finally, it’s critical to measure and examine the results.
Sales & Marketing SLA: Agree to Agree
Another important piece of a smarketing strategy is a service-level agreement, or SLA, between sales and marketing. An SLA is simply an agreement that codifies the commitment to each other and the respective roles of the marketing and sales teams.
In the SLA, the marketing makes a commitment to deliver a certain number — and quality — of leads to the sales team in order to help them hit their quotas. The sales team, in turn, promises to follow up on those leads, making a specific effort and number of contacts before giving up to generate a solid ROI for the marketing team’s efforts.
To create an SLA, you need to think about a few questions. How many leads does your sales team need? Is marketing responsible for all of them? Some sales teams do their own lead generation, so the marketing team might not be on the hook for every lead that’s brought in.
If the marketing team isn’t bringing in the leads, are they nurturing them? Even if the leads come from somewhere else, they might need some work before they’re ready for the sales team to take over.
Once you’ve answered these questions, you can start to craft an SLA based on what percentage of the leads the marketing team needs to be directly involved in. To make it even more compelling, put it in terms that salespeople know well — dollars.
Putting Your SLA In Terms Of Real Dollars
First, establish how much of your sales quota comes from leads that the marketing department is responsible for providing. Once you know what’s on the marketing department’s plate, calculate the value of each marketing-qualified lead (MQL).
Make a list of every marketing initiative that’s generated a lead. This could be social campaigns, demos, trade shows, or anything else that has sent potential customers your way. Make a list of recent customers and match them up with the campaign that brought them to you in the first place. Work out the average revenue brought in from each customer. At this point, you can even segment your customers into small, mid-sized, and large customers.
Find out what percentage of leads from each campaign are actually closed. This is your close rate. Multiplying the close rate by your average revenue per customer will give you the average value of each MQL for each marketing channel.
Let’s say you have an offer on your site for a free ebook. Leads from the download of that ebook convert at a rate of 2%, and the average revenue from those customers is $50,000. The average value of each MQL, in that case, is 2% times $50,000 or an even $1000. Feel free to segment your leads, campaigns, and customers as much as you want, as long as you’re getting useful MQL values out of it.
Keep Your Costs In Mind
Pursuing leads isn’t free — it costs your sales team time, and time is money. You need to figure out how many times it’s worth pursuing a lead before giving up on them. Start with old leads that have been around for a few months, and check your CRM to see how many times those leads were contacted.
Compare the cost of your sales reps’ time — based on how long a contact attempt takes, how many attempts they can make in an hour, and what they’re being paid — with the average revenue from a customer.
Because calling more than once costs you more money without generating extra revenue, you’ll find that there’s a point where it’s no longer profitable, on average, to make another attempt to contact leads. Incorporate that into your SLA.
Communication is Key
Communication between your sales and marketing team doesn’t need to involve every distinct detail, but getting an alignment between the two teams can set you up for success. Trust needs to be the foundation to create magic, and once those two can align, the world is your oyster.