Why Is Sales and Marketing Alignment Important?
- What is Sales And Marketing Alignment?
- Why is Sales and Marketing Alignment Important?
- What are Barriers to Effective Sales and Marketing Alignment?
- The True Cost of Sales and Marketing Misalignment
- What Successful Sales and Marketing Alignment Looks Like
- How to Achieve Sales and Marketing Alignment
- Last Words: The Role Leaders Should Play
Sales and marketing are the twin thrusters that propel companies to success. When they work in perfect unison, a company can easily maintain its growth trajectory and achieve revenue targets.
While most companies (and their leaders) know this, such a state of perfect unison is rare. Only 8% of companies say they have sales and marketing alignment even though aligned companies enjoy 36% better customer retention rates, are 67% better at closing deals, and achieve a 20% annual growth rate.
For most companies, each department might be burning at full capacity but with different priorities, objectives, and success metrics. The result is a loss of efficiency and effectiveness in maximizing sales and marketing resource utilization and a failure to capitalize on opportunities.
For sales and marketing leaders to bridge this gap, there must be a sound understanding of what sales and marketing alignment is, which this article addresses in detail.
What is Sales And Marketing Alignment?
Sales and marketing alignment is potentially the most significant opportunity for performance optimization and organic growth today.
Before unpacking the definition of sales and marketing alignment, what does sales and marketing misalignment mean?
What is Sales and Marketing Misalignment?
Unquestionably, sales and marketing have the same goal of driving growth and increasing revenues. However, in most cases, both operate in disparate silos, segregating information, success metrics, analytics, and other data.
The result is that each operates within a monolithic environment, reducing their capacity to cross-pollinate and leverage each other’s core competencies.
One study by the Content Marketing Institute found that in such organizations, up to 70% of content that marketing generates isn’t used because it’s not relevant to the buyer persona.
Meanwhile, HubSpot states that sales cannot convert up to 79% of marketing leads due to a failure to nurture customer connections (a role that marketing thrives in).
What is Sales and Marketing Alignment?
Sales and marketing alignment is the unification of sales and marketing around a single revenue-based objective.
When implemented, it creates a synergistic cross-functional team that merges the marketing funnel with the sales pipeline under standardized expectations, shared objectives, integrated technology, and synchronized processes.
Here, marketing helps sales generate, qualify, and nurture leads in the sales pipeline, while sales help marketing to plug strategic and tactical gaps in the funnel.
The result is an organization with higher conversion rates and shorter sales cycles that significantly increase revenues.
Why is Sales and Marketing Alignment Important?
IDC estimates that B2B organizations that fail to align sales and marketing lose up to 10% of revenue every year. By this estimate, the total annual global loss from sales and marketing misalignment is one trillion dollars.
In sharp contrast, the Aberdeen Group found that organizations that align sales and marketing grow 32% faster, compared to a 6.7% decline in less aligned companies.
These stats paint a stark reality where companies that fail to align simply cannot compete effectively in a rapidly changing B2B sales environment that relies more on lead nurturing and requires, on average, 6.8 stakeholders to close a deal.
Conversely, organizations that successfully align sales and marketing outperform the competition and respond better to shifts in market dynamics. By sharing data like market dynamics, real-world solution applications, process efficiency, customer health, and content validity, their cross-functional teams stay current on customer pain points, helping them sell more effectively.
Realizing you have a need for sales and marketing alignment?
What are Barriers to Effective Sales and Marketing Alignment?
If sales and marketing alignment (SAMA) is so crucial to business success, why aren’t more companies embracing it? In a word: status quo. Sales and marketing have traditionally not mixed. They are the proverbial oil and water.
When this status quo persists, it raises all sorts of barriers, including:
Sales and marketing expectations are often at odds, especially regarding how they view each other’s efforts. For example, sales expect marketing to shorten the sales cycle through better lead qualification, while marketing expects sales to do more to close leads after handoff.
While the overarching objective is revenue generation and growth, sales and marketing tend to have very different goals. For instance, marketing might be focused on generating more leads (a key marketing goal), while sales need higher quality leads that close faster (a key sales goal). The result is more low-quality leads, fewer closes as a percentage of total leads, and the vicious cycle continues.
Lack of Emotional Buy-in
Every company exists to solve a customer’s problem. The challenge is that misaligned teams do not understand this. Marketing shows up to market and sales to sell, but both misunderstand the company's overall purpose, making it difficult for them to unite under a common cause.
Marketing uses marketing-speak and sales sales-speak, which creates a barrier to effective communications. With both functions relying on non-standardized means of communicating, including different tools, formats, and cycles, it’s easy to see why it would be challenging to implement SAMA.
Sales’ main priority is higher quality leads so they can close more deals. Meanwhile, marketing’s main priority is lead generation at lower customer acquisition costs. The result: marketing sends cheaper, but lower quality marketing leads to sales, sales cannot convert them, revenues dip, which forces marketing to further lower customer acquisition costs, etc.
Mischaracterization of Objectives
Marketing is typically considered an expense, while sales are considered a revenue generator. The problem with this mischaracterization is that marketing is often subjected to budgetary constraints, which hurts the ability of sales to close more deals. What ensues is a blame game with marketing blaming sales for not closing more and sales blaming marketing for not generating more and higher quality leads.
Lack of Effective Attribution
Marketing attribution ties marketing efforts to the customer journey. Poor attribution makes it difficult for marketing to see how their actions impact the buying process, and sales cannot conceptualize the impact of marketing’s efforts. The result is a skewed accreditation of success, which can heighten mistrust between sales and marketing.
The True Cost of Sales and Marketing Misalignment
Organizations that lack sales and marketing alignment lose a lot more than just potential revenues. Hard and soft costs are at play, so the actual cost of misalignment might not be obvious.
Here are two ways sales and marketing misalignment costs organizations:
Sales and marketing processes suffer inefficiency and general havoc when misaligned.
Consider the following scenarios:
- marketing must redo a website because sales were not looped in
- sales cannot accurately forecast because they lack data from marketing
- marketing is slow in adjusting lead generation despite a sudden shift in the market witnessed by sales
- a competitor has entered the market, but it’s unclear whether to counter them with a marketing or sales effort
- marketing collects analytics data but lacks sales data to interpret it accurately
The cost of sales and marketing misalignment to people silently lays waste to marketing and sales departments, rendering them ineffective.
Here are some likely scenarios that demonstrate this cost:
- increased friction between sales and marketing distracts from meeting targets
- office politics undermine the effectiveness of each department
- stellar performers in both marketing and sales leave because they feel like their efforts are wasted
- team members become less responsive to the needs of customers
- uncoordinated efforts lead to wastage, both monetary and human capital
What Successful Sales and Marketing Alignment Looks Like
We’ve looked at the dark side of sales and marketing misalignment, so what does the bright side look like? If you succeed at cracking the SAMA puzzle, what pot of gold awaits at the end of the rainbow?
Richer Customer Data
Today’s B2B sales and marketing environment has shifted towards more fragmented point-solution tech stacks that generate lots of data but few insights. Bringing sales and marketing together under a joint plan can result in a more centralized and integrated tech stack that generates high-quality customer data for both teams.
Highly Motivated Teams
Sales and marketing alignment fosters better cross-functional collaboration and results in revenue growth. When team members feel like they are not competing but working towards a common goal, morale gets a shot in the arm, and everyone feels excited to do more. In addition, aligned sales and marketing team members may be less inclined to leave, resulting in less employee churn.
Better Utilization of Resources
Sales don’t participate in content creation. In most cases, marketing designs, develops, and delivers marketing collateral with zero input from sales. With better alignment, marketing messaging becomes more customer-focused and data-driven with input from sales, resulting in higher content adoption rates.
Smooth Lead Handoffs
Lead handoff is frequently a point of tension between marketing and sales teams, especially regarding the definition of a qualified lead. Sales and marketing alignment creates standardized cross-functional references for MQLs, SALs, and SQLs. Synchronized lead scoring and sales cycle estimates keep both teams on track to maximize lead generation and conversion of new customers.
Easily Demonstrated ROI
Siloed departments frequently obscure the impact various efforts have on outcomes. Tearing down these silos releases the floodwaters of data to assign credit where due. Marketing and sales alignment makes it easier to identify which assets are performing and which aren’t.
Faster and More Sustained Growth
Sales and marketing alignment rallies everyone to a common agenda; higher sales and growth. With everyone paddling in the same direction, friction reduces, wastage goes down, time is saved, and resources are maximized. Additionally, the data released from broken-down sales and marketing silos can be passed on to other departments like market research, CX, and PR to enhance and streamline organizational efficiency.
How to Achieve Sales and Marketing Alignment
Sales and marketing alignment is crucial to organizational success. Companies that fail to align will find it challenging to remain competitive in a rapidly changing business landscape.
Use these three steps to kickstart the alignment process in your organization:
1. Harness Your Sales and Marketing Alignment Toolkit
Sales and marketing functions have several components that must sync up for sales and marketing alignment to work. We call these the SAMA Toolkit, and they include Strategies, Goals, Processes, Roles, and Resources.
Goals (and KPIs) guide both sales and marketing, but they often look very different. Marketing goals are usually long-term and can include intangible outcomes like brand visibility and equity. Sales goals are often short-term and revenue-driven. Part of SAMA involves synchronizing these seemingly incompatible goals.
Strategizing meetings are common, but you’d be hard-pressed to find a marketer who knows what sales are strategizing and vice versa. Successful SAMA harnesses the power of such meetings to foster a common strategic outlook, even though the details of each function’s strategies might differ.
Each department has processes that automate work and generate higher levels of productivity. For marketing, it might be the MQL process, and for sales, the SQL sales process. SAMA should synchronize these processes to achieve individual efficiency and productivity targets while working within a common strategic theme that enables cross-functional collaboration.
Each department perceives its role differently. For sales, it’s revenue generation and long-term strategic thinking for marketing. Aligning these roles will reassure both teams that none is more or less important than the other and they are all working towards the same strategic outcome.
All systems and technology, including marketing automation, must work towards enabling marketing and sales to collaborate better and achieve more. Whether social media platforms like LinkedIn used by marketing or CRM tools used by sales reps, the main objective should be to assign methodologies, processes, and terminologies that align both departments.
2. Understand Sales and Marketing Alignment Best Practices
Sales and marketing alignment best practice is the core of alignment success. Without these vital benchmarks, it won't be easy to measure progress.
Here are the eight most crucial SAMA benchmarks to follow:
Redefine the Purchasing Funnel
Marketers call it the marketing funnel, and sellers call it the sales funnel. When aligned, the buyer's journey along the funnel stages are agreed upon and how each will contribute to the success of a deal. For example, marketing will target potential customers through awareness at the top of the funnel, while sales will complement this effort by targeting qualified leads.
Link Marketing and Sales Goals to ROI
Despite different roles, both sales and marketing should be working towards the same goals: revenue generation and ROI. Avoid marketing vanity metrics and ensure all data and analytics directly line up with the bottom-line business goals. For example, eyeballs on your website are not enough unless you know how many views equal a conversion and what the average conversion is worth. Use tools like marketing attribution to link indirect marketing efforts to sales win rates while also linking sales efforts back to marketing through a customer data feedback loop.
Sales and marketing should not have different definitions for leads, prospects, awareness, and so on. Bring both teams together to generate a shared lexicon of terms that explicitly define and describe all shared terminologies. Extend these terminologies to marketing collateral like content and ads, so everyone is speaking the same language.
Centralize Data and Communications
Centralized data empowers both teams to learn from each other. For instance, marketers might have website data enriched with sales data from an ABM tool. Cross-pollinating data in this way enhances it and makes it easier to extract contextual and more meaningful insights.
Invest in Sales Enablement and ABM
Sales enablement and ABM (Account-Based Marketing) bring sales and marketing teams to a roundtable to achieve shared outcomes. In sales enablement, marketing works closely with sales to provide content, data, and other resources to speed up the sales cycle and close more deals. In ABM, sales and marketing combine their efforts to target a handful of high-value accounts in a coordinated one-to-one sales and marketing initiative.
Involve Sales in Content Development
Alignment invites sales into the content development process, combining marketing strategy with sales front-line knowledge. Doing so has a twofold effect: sales better understand the content and how to use it, and marketers create highly relevant and optimized content like case studies that align with the customer experience.
Conduct Joint Meetings
Conducting joint meetings builds bridges between teams, helping them see how each contributes to the success of the other. Moreover, joint meetings help foster a shared understanding of goals, expectations, constraints, performance metrics, and strategies.
Sit Sales and Marketing Together
While this might not be a popular recommendation, housing marketing departments with sales departments in the same office can build empathy, understanding, and sales/marketing alignment. A marketer who listens in on sales calls will better understand and appreciate a salesperson’s role and get better ideas on how to improve and optimize sales enablement resources.
3. Implement a Sales and Marketing Alignment Roadmap
Now that you have a solid understanding of sales and marketing alignment, where should you start? We recommend starting simple and then building up from there.
Here’s a sample sales and marketing alignment roadmap you can adopt:
- Get everyone together for a roundtable: With sales, marketing, and possibly leadership gathered, start with the current reality of your sales and marketing alignment and speak honestly about what's going well and what needs improvement.
- Look three to five years into the future and imagine what could be: How are both teams serving the customer? What does the cross-functional team look like? Does each team’s plan align with the company’s vision and mission?
- Identify gaps between the current reality and the future state vision.
- In that "white space," between what is and what could be ... in those gaps, are your sales and marketing alignment opportunities. Debate, analyze, prioritize, and think them through as a cross-functional team.
- Write it down: what are the near-term sales and marketing alignment initiatives to achieve long-term goals. Everyone's opinion matters; everyone has a seat at the table. When there's an impasse, use analytics as a tiebreaker.
- Have marketing develop the marketing plan and sales develop the sales plan, both based on those strategic initiatives.
- Meet regularly to ensure 2-way communication and keep an eye on the long-term prize, even (especially) if you must invite yourself to another team's recurring meeting.
- Repeat once or twice every year.
Last Words: The Role Leaders Should Play
Sales and marketing alignment can only succeed with buy-in from leadership and not just sales and marketing leadership. For example, seating sales and marketing teams together might require additional resource approvals from leadership.
If sales and marketing leaders understand the importance of SAMA, they can act as advocates at a leadership level for greater integration and alignment.
However, advocacy should not stop at a leadership level. By sensitizing sales and marketing team members on the importance of SAMA (it will make their job easier, more productive, more successful), organizations can foster organic alignment that can stand the test of time.