Hand in Hand SALES

How to combine the best of both worlds


They go together like franks and beans, like Abbott and Costello, like – well, like sales and marketing. Or they should. But, then again, sometimes they lock horns. Or veer off in different directions. Or just fail to sync. Then it’s, ooops, did we just give ourselves a huge black eye? Realigning sales and marketing to better support each other may have become a hot topic, but it doesn’t always work like the textbook says it should. It appeals to all par- ties – at least in principle. But what about in the real world?

REALIGNMENT CHALLENGES Rich and John are researchers who have studied how com- panies sell. Rich comes from a sales background, while his partner John worked chiefly in marketing. The two say the best companies have been realigning for profitable growth for years. What Rich and John call “managing demand through field marketing” shows dramatic gains in 1) true opportunities per response to marketing campaigns, 2) increased sales productivity of reps, and 3) more control over the timing and volume of sales. All are obvious benefits. But true change also comes with trade-offs and sacrifices. “Sales may have to give up some budget to marketing,” John acknowledges. “Lead generation is no longer tactical, but part of strategy.” Mar- keting managers become accountable for the quantity and quality of leads. And reps may get higher quotas. The key to managing this pain seems to be collabora- tion. Rich and John studied the revenue growth of more than 200 companies that sell in B2B markets. “The big difference is that organizations that had good top-line growth had very good collaboration between sales and marketing,” Rich summarizes. “They had a significant ad- vantage over organizations without formal collaboration.” Market changes require tighter collaboration. Sales cycles have grown about a fifth longer, John says. Buy- ers have become more pragmatic, and more managers are involved in major purchasing decisions. Purchases of information technology now involve business managers, not just chief information officers.

THE PIPELINE TURNS INTO A WATERFALL Selling effectively in this new market cannot be done under the old sales-marketing model, where, as John de- scribes, “Marketing did strategy and branding, and sales developed leads into opportunities.” Now, marketing must develop leads into true opportunities before turning them over to sales. As a result, the sales pipeline is no longer a simple pipeline, but a “waterfall.” Marketing campaigns attract responses, which turn into qualified opportunities that are passed to sales, where those opportunities are turned into closed business. John and Rich found that best-practice companies average, per initial response, four-and-a-half times more opportunities given to salespeople. “That is a huge potential for improvement,” Rich stresses. Under “field marketing 2.0,” marketing is measured by numbers of opportunities and its ability to fill the down- stream waterfall and increase revenue. To collaborate effectively under these circumstances, marketing and sales must first agree on the definition of a qualified opportunity, on the processes for handing oppor- tunities to sales, and on systems that hand them off quickly and inexpensively. Then, each department must restruc- ture its activities. “Marketing must identify where leads are in the buying cycle through quick questions and analyzing behavior,” Rich explains. Marketing needs a database to aggregate these activities, plus rules to interpret them. Reps must also be able to exploit opportunities quickly. They must be more competent at their specialty – profes- sional sales – and know customers and communication tools better. They must build and manage consistent presentations using the best new tools. The potential gains are enormous. Rich estimates that as much as 80 percent of responses to expensive marketing campaigns are ignored by both sales and marketing. “The money spent and wasted is ludicrous.” Rich says marketing should usually fill from 20 to 40

percent of the pipeline. The rest should come from current customers. Marketing should forecast these opportuni-


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