I mentioned in an earlier blog my interview on the July 29 debut program of the Sales Lead Management Associations’ SLMA Radio, a series of regular talk show broadcasts touching on industry news and events and featuring interviews with industry experts. (Listen to the archive.)
My conversations with sales and marketing executives continually place sales and marketing alignment—and the lack of it—in a “top five” list of most-talked-about challenges, and I wanted to share with you comments on this topic from that interview.
Life is good when sales and marketing are fully aligned. The two organizations work in harmony on lead generation, lead qualification, lead nurturing and closing sales-ready buyers. Correctly deployed resources and effective processes just click, and they result in more sales, increased revenue and lower costs. Alignment heaven.
But when the two groups are out of sync, the path to alignment heaven takes that nasty detour south. Marketing complains that sales isn’t accepting its leads. Sales complains that marketing leads aren’t qualified. Marketing complains that sales doesn’t enter feedback in the lead database. Sales complains it doesn’t have time to nurture mid- and long-term sales prospects. “Et cetera, et cetera, et cetera,” Yul Brynner might add.
While it would be easy to place blame and point fingers, neither marketing nor sales executives are really at fault as both groups have their own prudent self interests at heart. But the ongoing costs of non-alignment—inefficiencies, wasted dollars and lost sales—make it imperative that sales and marketing get on the same page as quickly as possible.
To that end, I propose a straightforward solution where sales and marketing can’t or won’t align on their own. Assuring sales and marketing alignment is grounded in the answers to the following three questions:
- What do sales and marketing need to agree on?
- How are agreement and alignment going to be assured?
- Who is going to assure agreement and alignment?
1. What do sales and marketing need to agree on?
At the very core, sales and marketing have to absolutely agree on four key points:
Lead definition and follow up actions
Sales and marketing must agree on lead definition and follow up actions based on these definitions. We see both lack of agreement on lead definitions as well as agreement on definitions but inconsistent follow up actions in handling leads. For example, Marketing Qualified Leads (MQLs) have been sent to sales with the belief that sales will accept them as Sales Accepted Leads (SALs), but sales allows them to languish unattended in a marketing/sales purgatory. And SiriusDecisions notes another purgatory inside sales when sales makes one or two contacts with SALs but discontinues action when they don’t quickly convert into Sales Qualified Leads (SQLs).
Market definition
Sales and marketing must agree on the criteria for defining the target market. If either sales or marketing thinks the market is larger than it really is, resources and dollars will be wasted chasing too many low-value prospects. If either marketing or sales thinks the market is smaller than it really is, opportunities are lost when appropriate high-value prospects are not uncovered and engaged.
Offer and messaging
Sales and marketing must agree on the focus for the offer as well as clear messaging for solutions and services. In the absence of agreement, marketing may believe the best offer is for one or more point solutions while sales is committed to selling an enterprise solution. This disconnect will wreak havoc on results.
Results measurement
Ongoing alignment must be measurable. For example, sales and marketing demonstrate great progress toward full alignment the closer the percentages of MQLs to SALs and MQLs to SQLs get to 100%. This means each step in the process needs to be measured and reported on regularly.
2. How are agreement and alignment going to be assured?
Organizations where sales and marketing have reached productive and profitable alignment are to be congratulated. It’s organizations where one of the following is occurring that I’m directing my comments:
- Sales and marketing can’t align on their own.
- Sales and marketing won’t align on their own.
- There is an assumption that they are aligned, but they really aren’t.
How are agreement and alignment going to come to these organizations and become ingrained? Here’s what needs to happen: management needs to name a single, accountable person with mediation and arbitration skills who continually measures progress and takes action to make sure things are on track.
A single accountable person—Companies with unaligned sales and marketing groups need to have a single person responsible and accountable for agreement and alignment. In the absence of consensus, this person needs to step up, understand the real problems and take action.
With mediation and arbitration skills—This person needs to have the expertise to broker and implement a consensus among sales and marketing stakeholders, a consensus that delivers agreement on and commitment to the four key points discussed above. In the absence of a consensus, this person needs to have the authority to make a decision and say, “This is the way it’s going to be.”
Who continually measures progress—This person has worked with all stakeholders to translate the four key points into measurable, no-wiggle-room objectives and to closely monitor weekly and monthly reporting.
And takes action to make sure things are on track—Assessing progress, strengths and limitations to make the tough calls needed to get things back on track, this person says, “Hey, I just want to make it clear. This wasn’t a suggestion. This was a mandate. So here’s what’s going to happen.”
3. Who is going to assure agreement and alignment?
You may be wondering, “Who’s going to do this, and what is the name of this person’s role or title?”
Taking on the question of role name first, I’ve put together a “top ten” list of what the role could be called. Be warned! The first few are tongue-in-cheek, but the list progresses toward and concludes with what feels like a workable solution.
10. Grand Poobah of Alignment
OK … more than tongue-in-cheek … patently absurd. Who could respect a role name that Fred Flintstone co-opted from a Gilbert and Sullivan opera?
9. Alignment Kingfish
Yes to implied leadership, but, again, way past irony. And there is the added risk of calling up Huey Long’s image.
8. Alignment Wizard
While wizards possess significant skill sets, we require both more decorum in our role name search as well as a belief in management science over magic.
7. Alignment Guru
A guru brings wisdom, ethical guidance and recognizable leadership, but our search calls for more authority.
6. Alignment Chieftain
Reference.com notes this title conveys leadership but qualifies it by adding, “Among many peoples, chiefs have very little coercive authority and depend on community consensus for implementing recommendations.” Our search pushes us for a role name with attributes of power that go beyond consensus building.
5. Alignment Architect
The role we’re defining does include organizing and structuring, but we need the added elements of conflict resolution and the power to make binding decisions.
4. Alignment Strategist
We’re getting warmer, but—similar to “architect”—this role name lacks bite.
3. Alignment Czar
Czar has the feel of a freestanding or dedicated role—like an individual who has the sole title of “czar.” We’re looking, however, for the name of a role that can be added to an individual’s existing organizational title. Additionally, there can be a negative connotation about how the word has been used in political contexts.
2. Alignment Authority
Getting warmer. Reference.com on authority: “the power to determine, adjudicate, or otherwise settle issues or disputes.” The downside is the sense that “authority” may convey the idea of an entity rather than an individual. We’re looking for a role name for the latter.
1. Alignment Arbiter
Finally! Reference.com delivers a role name that matches our requirements with “arbiter”:
“A person empowered to decide matters at issue; judge; umpire.”
“A person who has the sole or absolute power of judging or determining.”
The Alignment Arbiter would work to reconcile sale’s and marketing’s points of view and arrive at a consensus on each of the four points discussed above. But in the absence of a consensus, the Alignment Arbiter would be empowered to arrive at a binding mandate to assure sales and marketing are on the same page in these four areas.
Who’s going to be the Alignment Arbiter? Unless sales and marketing executives can reach consensus on their own, accountability and responsibility for assuring alignment must be elevated to as high within the organization as is necessary to effect change. Accountability and responsibility for alignment therefore ultimately rest with C-level and other senior executives, one of whom will need to become the Alignment Arbiter to assure successful sales and marketing alignment.
What’s going on in this regard within your company? Have sales and marketing reached agreement and alignment on their own? Or have you turned to an Alignment Arbiter to settle differences and get everyone on the same page? If so, what executive is the Alignment Arbiter in your organization? I’d like to hear your comments.
Who should mediate when sales and marketing alignment issues get in the way of results (lack of common lead definition, fuzzy market definition, offer problems)? What level in the organization is required for successful alignment and what should this role be called? Alignment czar? Alignment arbiter?
“Regarding lead generation, when does the role of marketers end?”
A recent blog by Parker Trewin, director of marketing communications at Genius.com, discussed responses to this question found in the 2010 B2B Marketing Skills Survey, a collaboration between Genius.com and BtoB Magazine.
Of 500+ surveyed marketers, roughly four of ten split their responses by saying marketing involvement ended at one of the following milestones: after a program goes live (5%), after a program starts to generate leads (10%), after lead qualification and lead scoring (16%), after lead nurturing (9%), or after a sale has been completed (3%).
By comparison, it’s interesting to hear that the largest group by far—58%—said marketing involvement never ends in B2B lead generation. Commenting on reasons, Parker added that “marketers increasingly remain engaged with customers even after the close to keep them informed about service offerings, company news and cross sell opportunities.”
While this is good news, the survey also showed the need for improved collaboration between marketing and sales with findings like these around data sharing and frequency of meetings:
- 54% of marketers said they share, at most, half their data with sales
- 66% of marketers said that sales shares, at most, half their data with marketing
- 58% of marketers said they met with sales once a month or less
The report summarizes the mixed findings on marketing involvement with a sober assessment:
The lack of interaction and collaboration nonetheless suggests an unfortunate outcome: sales and marketing continued to be as misaligned as ever.
The Marketing Skills Survey is an insightful read, and I think you’d enjoy it. There are six high level findings discussed, several of which may point away from conventional wisdom. For example, the report suggests marketers are moving from top-of-funnel metrics like click-through rates and website traffic to bottom-of-funnel metrics like revenue and sales accepted opportunities to gauge marketing program success.
1) The more leads you give to sales the less likely they'll be followed up on: Sales is conditioned to not follow up on marketing's leads. Why? Because they've been burned. They receive hundreds of so-called leads generated through tradeshows, email campaigns, webinars, whitepaper downloads, etc. and have learned that there may be, if they're lucky, 10% that are qualified. Sales has a quota and they're not going to spend the hours needed to cull through lists of low-level, so-called leads.
2) Fewer leads empower sales: Marketing can recondition sales by sending qualified opportunities, as opposed to raw, unfiltered leads. How? If marketing segments, measures, and qualifies, sales will learn to value what marketing sends their way. That translates into more deals and more revenue, and that's good for sales, marketing, and the company.
3) When leads are qualified marketing can do a better job: When marketing takes on the lead qualification role, sales gets in front of more qualified prospects. Which means marketing is able to increase its ROI as leads generated are no longer wasted. Plus the process of qualification helps marketing fine-tune its demand generation programs: if a list generated from a tradeshow, for example, is only pulling at 5%, Marketing can adjust its investments to maximize the benefits.
Want to learn more?
I’ve been having a lot of conversations about sales and marketing alignment of late, and the question has arisen, “How do we know when we’re on our way to reaching sales and marketing alignment?”
This reminded me of comments Mac McIntosh made in our recent webinar on best practices for handling webinar leads. I provided an overview of the webinar in a recent blog, and I wanted to share additional comments Mac made around sales lead generation and the marketing-to-sales handoff process.
Mac used the following terms that have been nicely illustrated and well defined in SiriusDecisions’ Demand Metrics Waterfall chart:
Marketing Qualified Leads (MQLs)
Leads deemed ready for handoff from marketing.
Sales Accepted Leads (SALs)
Leads where lead qualification tenets have been met and where sales agrees to work them.
Sales Qualified Leads (SQLs)
Leads where opportunities have been identified and sales-ready buyers have been added to the pipeline with a high probability of buying.
Mac recommends measuring the percentage of MQLs that become SALs as well as measuring the percentage of MQLs that become SQLs.
Perfection, of course, is that 100% of MQLs become SALs and SQLs.
But sales and marketing demonstrate great progress toward full alignment the closer that percentage gets to 100%.
What other metrics do you suggest for confirming sales and marketing alignment?
Two recently-released sales metrics reports share a common finding that's impacting lead generation and sales success: there is a decrease in the percentage of field and inside sales reps making quota.
In a blog posted June 16, Trish Bertuzzi, President and Chief Strategist of The Bridge Group, announced availability of the 2010 Inside Sales Metrics & Compensation Report based on surveys of over 115 technology companies conducted in the first quarter of this year. In her post, Trish shared these key findings:
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Since 2007: The average size of Inside Sales groups has nearly tripled.
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Since 2007: The average sales quota has increased nearly 33% to $853k.
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Since 2007: The percentage of reps making quota has fallen by 25%.
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In 2010: 42% of respondents reported less than 50% of their reps at quota.
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In 2010: Only 4% of respondents had greater than 80% of their reps at quota.
In a blog posted May 31, Barry Trailer, Managing Partner and Co-Founder of CSO Insights, announced availability of the 2010 Telemarketing/Inside Sales Performance Optimization Report based on surveys with 250 companies. Barry noted this key finding:
Certainly, there are internal factors contributing to quotas not being met.
In a February 2010 article in the Denver Business Journal, Barry and fellow Managing Partner Jim Dickie talked about an earlier CSO Insights report that noted many sales organizations were cutting sales budgets. That earlier report mentioned frozen or reduced lead generation budgets and reduced training budgets for reps. Jim added the following:
"Many of these firms then tried to 'cut their way to success' by reducing budgets. The [survey] results show that strategy was a huge mistake."
And there are external factors impacting quota attainment. In an earlier blog, I referenced OneSource's 2010 B2B Sales Pulse Survey finding that 59% of respondents report sales cycles were either significantly longer or somewhat longer than last year.
What is your take on reasons for this decline in the percentage of reps making quota?
What are your thoughts on contributing internal and external factors?
What are your ideas on ways to lift quota metrics in this tough economy?
Marketing and sales need a "judicial branch" to keep everyone honest: In the ideal sales lead management process, marketing defines the target market, the offer, the message and the media necessary to cost effectively generate the number of leads required by sales to meet revenue goals. As a "check and balance," sales must evaluate and accept or reject marketing's leads and marketing should be evaluated accordingly. This step ensures that marketing does not simply load the pipeline with low-level leads. Instead they must provide sales with legitimate, closeable sales opportunities.
Sales can either accept or reject leads on a lead-by-lead basis, and then convert the leads to revenue (or not). Once a lead is accepted by sales (the lead advances from marketing qualified to sales accepted), marketing's responsibility for the lead ceases (unless it requires nurturing or reheating, but that is not a marketing or sales responsibility and a whole different story).
For this process to actually work, organizations require a judicial branch comprised of senior sales and marketing executives, if not the CEO. The judicial branch is required to assess leads that have been rejected by sales, but "appealed" by marketing to ensure opportunities are not being squandered. This same team should evaluate sales effectiveness in lead follow-up.
I find that the missing ingredient in many organizations is a "judicial branch". The judicial branch could keep everyone honest. Unfortunately, this is not often done.