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Bad marriages between the two are epidemic
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Differences in the way that sales teams and marketing departments are focused, managed and paid often leads them in conflicting directions. But there are strategies for harmonizing their missions that benefit everyone. Christine Crandell, executive vice president and chief marketing officer for data center technology provider Egenera, has seen it in some of the nation’s leading technology companies and helped repair their sales-marketing rifts.
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By Christine Crandell
Every company struggles to keep its sales and marketing efforts aligned – staying focused on one result. Some attain alignment only to lose it as people and priorities shift. A 2007 Aberdeen study found that 56 percent of Best-in-Class companies identified sales and marketing alignment as one of their top operational goals. 1 Yet, 60 percent of them also ranked alignment as their top challenge.
Telltale signs of misalignment can be seen in industry statistics: 80 percent of leads passed on to sales are dropped; 90 percent of collateral is unused; and the total cost of winning a net new enterprise customer via direct sales carries a hefty price tag averaging $500,000. Even worse, fully 80 percent of deals won are not influenced by marketing at all. Why is collaboration so elusive? And once established, why is it so hard to preserve?
At the root of the problem is the fact that marketing and sales have their own charters, planning time horizons, and compensation models. Aligning the two means recognizing these differences and incorporating them into the company’s overall strategy and operational philosophy.
Quelling the Clash of Titans
In his seminal 1960 paper Myopic Marketing, Harvard Business School professor Theodore Levitt observed that, “The difference between marketing and selling is more than semantic. Selling focuses on the needs of the seller, marketing on the needs of the buyer. Selling is preoccupied with the seller’s need to convert the product into cash, marketing with the idea of satisfying the needs of the customer.”
Sales' focus is on the here-and-now, driving revenue and meeting immediate customer needs. Sales people are the face of the company, taking whatever the market dishes out while fighting to make their quota. For this they are rewarded with strong incentives to meet short-term revenue goals. But their activities are not always aligned with marketing; long-term lead nurturing strategies are frequently sacrificed under pressure from investors and management to deliver profits now.
Marketing, on the other hand, focuses on goals that may be years away. It determines which segments to target, how best to position the company in those markets, what programs will build mind share, increase market share, overcome customer objections, and deliver quality leads to sales. Their eyes are fixed on both emerging trends and the realities of today’s revenue. And for this they are compensated with a fixed salary.
These core differences make clear why the two groups are frequently at odds. Yet neither can succeed without the other. For sales and marketing to become aligned, and stay aligned, several things need to happen. The Aberdeen study found that companies which successfully aligned themselves did so by structuring their organizations and processes to support demand generation and lead management. If approached methodically, these are goals any company can attain.
But as part of the alignment process, companies need to develop the right perspectives, compensation drivers, cooperative work methods, and integrated processes. In addition, both sales and marketing need to acknowledge that they have different vocabularies, different management, and different work styles. They need to learn each other’s shop talk. From there, the dialog can move to agreeing on how leads are generated and distributed, and how prospects and customers are managed. That shared understanding builds trust.
The Path to Alignment
There are four stages of sales and marketing alignment. Their characteristics range from ambiguous and conflict-laden to unified and conflict-free. Both groups need to recognize where their relationship stands and then work to advance to the next stage. Those stages are: Ambiguous, Structured, Aligned, and Unified. Although some companies realize a true Unified relationship, the Aligned stage is the most realistic, and it’s attainable for any company.
Ambiguous is the most conflict-riddled and unaligned stage. Both groups focus on their own tasks and are unaware of what the other is doing or trying to achieve. If there is any collaboration at all, it is ad hoc. To move to the Structured stage, both groups need to understand that theirs is not a zero-sum game. They need to define their respective roles and then specify the rules of engagement along with hand-off points for key tasks such as sales lead follow-up.
Moving to the Structured stage requires establishing the structure of the relationship including the company’s investment rationale and each group’s performance metrics. And because the structure carries compensation-related consequences, both the CEO and CFO need to champion it. That becomes easier if the head of sales and marketing are peers and work well together.
The Structured stage is where sales and marketing establish precise boundaries and interaction points. Their communication becomes more disciplined as evidenced by joint staff assignments and defined liaison roles. Sales and marketing still focus on their own tasks, but they also start to collaborate on such key activities as agreeing on definitions for terms like “qualified lead.”
Making the Leap from Structured to Aligned
Before progressing to the Aligned stage, both groups must achieve significant transparency with one another and with the rest of the organization. They should jointly plan how to respond to market dynamics and internal capabilities. This means clearly defining when, and with whom, to communicate on key actions. They also need to jointly define marketing plans, participate in product planning, and meet regularly to review programs and results to determine strategic adjustments.
Marketing takes an active role in sales through customer visits, sales support, and managing customer references. It supports the sales cycle, including embedded field marketing, sales enablement, and customer advocacy. Marketing’s compensation structure is directly aligned to sales’ goals for revenue, renewal rates, and customer satisfaction.
The ultimate alignment stage is Unified. Here, sales and marketing develop a joint rhythm, operating as if they were one group. Boundaries become blurred as they share structures, systems, and rewards. Annual planning is done jointly. Each has a voice and vote in the other’s metrics, goals, and execution plans, including setting revenue targets, customer assessments, and value proposition development. Their sharing is institutionalized through automated systems such as CRM. And marketing is often split to better align its tactical role with sales’ needs while allowing its strategic marketing role to continue.
Marketing Compensation: The Seed of Alignment
Traditional compensation models do not directly link marketing to revenue or margin objectives. Marketers are paid fixed salaries, sometimes with bonuses tied to performance. Performance bonuses typically focus on long-term process improvements or making progress toward future goals. To align sales and marketing, executives need to recognize that part of marketing’s job is to directly produce revenue. Consequently, where marketers are responsible for successful lead-generation and deal closing, their pay structure should reflect this sales-based responsibility.
Marketing’s contribution to sales goals should be measurable and time-bound. In an Aligned company, these goals are very specific and affect each team member’s performance plan. For example: “generate leads that result in $20M marketing pipeline each quarter” or “deliver training that shortens the new hire sales ramp-up to two months so they close their first deal in 90 days.”
However, not every position in marketing can or should be tightly linked to revenue goals because marketing’s charter encompasses both immediate and long-term strategic initiatives. Only those positions that are core to the alignment process and revenue generation should be compensated according to the sales model.
Plan for Success
Sustaining alignment over time is critical. Accordingly, annual budgeting should define various marketing activities, link each to specific sales objectives, and clearly define success metrics as well as those accountable for marketing’s contribution. Performance plans should include sales-based performance criteria that can be tailored to individual contributors. Among the marketing positions directly involved in the sales process, and associated alignment metrics:
| Marketing Role |
Alignment Metrics |
| Product marketing |
- Pipeline and close rate by product line
- Revenue booked
- Margin by product line
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| Field marketing |
- New lead follow-up days outstanding by AE and territory
- Field-produced pipeline production
- Associated close rate by region
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| Marketing programs |
- Demand generation conversion ratios
- Marketing-produced pipeline production
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| Sales training |
- Percent of sales force current on training
- Role-based proficiency scores on key soft skills (i.e., discovery, negotiation, etc.)
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| Sales/field enablement |
- Response time to field requests
- Sales force satisfaction and effectiveness scores
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| Customer Advocacy |
- Renewal rates
- Customer satisfaction scores
- Percentage of customers serving as references and evangelists
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Every year, marketing develops a master plan that usually includes individual plans outlining every marketing program including investment, target metrics, and benchmarks by department and team. By mapping these performance plans to compensation, the blueprint for success and achievement is clearly defined at the outset. But how can companies keep that blueprint in place?
Now Keep Them Talking
In addition to formalizing processes and procedures, maintaining communication between the two organizations is critical. There are a number of mechanisms to keep the communication channels open between aligned sales and marketing groups. They include:
- Campaign Councils including top sales people and marketing demand generation leadership
- Weekly field updates on marketing campaigns, progress on shared goals, and sales successes
- Monthly podcasts or video casts on topics such as competitors, objection handling, product roadmaps, or positioning/messaging
- Regular joint knowledge-sharing and problem-solving sessions for sales and marketing managers
- Quarterly dashboards for management on progress made toward shared objectives
Finally, while formal communication processes keep everyone informed, individuals seek recognition for their own efforts, so marketing should acknowledge the accomplishments of specific sales people. Their recognition should be centered around celebrating alignment successes including recognizing the sales person who secured the most customer references, customer media participation, follow-up on assigned leads, etc. Nothing gets sales’ attention like a bit of competition. And nothing gets marketing’s energy flowing more than seeing proof of their work to the company’s success.
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About the Author
Christine Crandell is executive vice president and chief marketing officer for Egenera, Inc., a provider of data center infrastructure technology. In this role, she is responsible for the company’s business development, alliances and global market strategy. Ms. Crandell brings more than 20 years of experience in strategic marketing for enterprise technology companies including Ariba, SAP, Oracle and PriceWaterhouse. She is based in California and a frequent speaker and writer on marketing, strategy and technology. She can be reached at
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