Moving Beyond Mere Sales-Marketing "Alignment"

In my last post, I discussed some of the findings of a 2019 survey about sales and marketing alignment by LeadMD and Drift. In this survey, over 90% of the respondents described their marketing and sales functions as well aligned or very well aligned. However, 60% of those respondents also reported that their company had not performed well in terms of revenue and pipeline growth.

This research also found a strong correlation between positive perceptions about the quality of sales-marketing alignment and the use of key performance indicators that are shared by marketing and sales. Ironically, the survey found that the mere existence of shared KPIs is sufficient to engender positive feelings about alignment. The survey report states, "It's critical to note that lack of achievement around these KPIs did not negatively influence alignment perceptions - the presence of the shared KPI was enough."

This finding helps explain why many companies have found it difficult to create the kind of sales-marketing relationship that will actually drive improved business outcomes. Many of the widely-touted "best practices" for improving sales-marketing alignment focus on three primary objectives:

1. Creating a shared understanding among marketing and sales team members regarding the key elements of the company's go-to-market strategy, including the definition of the target market, the ideal customer profile, core value propositions, and customer buying processes;
2. Establishing an agreed-upon lead management process ("who does what and when"); and
3. Shared performance measures that collective show how well the company's revenue generation strategy and processes are performing.

These objectives are certainly important, but they aren't sufficient to create the kind of sales-marketing alignment that is needed to produce significant improvements in important business outcomes. In fact, the term "alignment" does not adequately capture the real sense of what is required. A better term for what is needed is operational integration. By operational integration, I mean that marketing and sales work as a single, cohesive team on a day-in, day-out basis, even though they are separate functions on the organizational chart.

From Alignment to Operational Integration

To move from conventional "alignment" to operational integration, sales and marketing leaders need to focus on two additional objectives.

Recognized Interdependence - The operational integration of sales and marketing requires a widespread recognition among both marketing and sales professionals that the two functions are now deeply interdependent. In other words, both marketing and sales professionals must recognize that they need each other, and that an integrated approach to revenue generation is essential for success.

Ongoing, Self-Directed Collaboration - Operational integration also requires marketing and sales professionals to work collaboratively on an ongoing basis, and this collaboration needs to occur naturally and spontaneously, at all levels of both functions, whenever and wherever it's needed. In other words, working collaboratively must become the normal way of getting things done.

How Leaders Nurture Operational Integration

Nurturing operational integration is primarily the responsibility of the chief marketing officer and the chief sales officer. The CEO must be supportive, but the CMO and the CSO must lead the effort on a day-to-day basis. In addition to implementing mechanisms designed to achieve the conventional alignment objectives, CMOs and CSOs need to take three other steps.

Reinforce the Narrative - The CMO and the CSO must constantly communicate the importance of having marketing and sales work together seamlessly - that the company's revenue generation efforts can't produce maximum results unless marketing and sales work as a cohesive team. In addition CMOs and CSOs should make it clear that informal, self-directed collaboration among marketing and sales professionals is not only acceptable, but expected. This narrative needs to be reinforced every day in some way.

Conduct Regular Sales-Marketing Forums - CMOs and CSOs should conduct joint sales-marketing forums on a regular basis. The cadence of these forums is determined by individual company needs, but they probably should occur at least monthly at most companies. The primary objective of these forums is to provide a venue for marketing and sales professionals at all levels to interact, exchange information, and discuss problems and opportunities.

Leverage Cross-Functional Teams - The CMO and the CSO should always be looking for opportunities to use cross-functional teams to deal with meaningful problems, challenges, or opportunities. Whenever possible, these teams should be composed of individuals who don't normally work together. Not only are cross-functional teams usually the best way to address major issues, they also foster the development of personal relationships that span functional and departmental boundaries.

The Bottom Line

Creating a high-performing revenue generation system is ultimately an exercise in team building. It's essential for marketing and sales professionals to have a shared understanding regarding the major elements of their company's go-to-market strategy. And they also need an agreed-upon lead management process, and a well-designed set of shared performance measures.

But these factors aren't sufficient to create the level of sales-marketing cohesiveness and coordination that are needed for high-performance revenue generation. In addition, marketing and sales leaders must nurture a "culture of collaboration" that transforms marketing and sales into a team of teams.

Image courtesy of Tatinauk via Flickr CC.

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Why Superficial Sales-Marketing Alignment Isn't Enough

Astute B2B marketing and sales professionals have long recognized the importance of having a productive relationship between marketing and sales, and many B2B companies have been working to build such relationships for more than a decade. So it's understandable that sales-marketing alignment has been a hot topic in B2B marketing and sales circles for the past several years.

Overall, there's no doubt that most companies have made at least some progress toward creating a more productive relationship between marketing and sales. It's also clear, however, that most companies still have work to do to turn their marketing and sales organizations into a cohesive, high-performing team.

A research report published late last year by LeadMD and Drift provides several important - and somewhat surprising - insights about the state of sales-marketing alignment, and about what business leaders need to do to reap the maximum benefits from a productive marketing and sales relationship.

The LeadMD Sales and Marketing Alignment Survey Benchmarking & Insights Report was based on a survey of 350 sales and marketing executives. Forty-four percent of the respondents were sales executives, 26% were marketing executives, and 30% were executives with responsibility for both functions. The respondents were drawn from several industries, and all were with companies having at least $25 million in annual revenue.

One primary objective of this study was to develop an evidence-based and actionable description of "meaningful" sales and marketing alignment. The researchers decided that alignment should be called meaningful if it is correlated with two business outcomes:

1. Growth in revenue, wins, and lead quality over a 3-year period
2. Pipeline health (growth and sustainability in predictable revenue)

The study report categorized survey participants as leaders or laggards in meaningful sales-marketing alignment based on how respondents answered survey questions related to these two business outcomes. The survey then identified what specific alignment actions distinguished the leaders from the laggards.

Perception Versus Reality

One remarkable finding from this survey is that perceptions about the quality of sales-marketing alignment are not strongly correlated with above-average business outcomes. Over 90% of the survey respondents said their sales and marketing functions are well aligned or very well aligned. However, 60% of those respondents also reported poor performance on the revenue growth and pipeline health outcomes.

The authors of the report attributed the positive feelings about alignment to two factors:

1. The use of key performance indicators that are shared by sales and marketing. Ironically, the survey found that the mere existence of shared KPIs is enough - a lack of achievement around such KPIs did not negatively influence perceptions about alignment quality.
2. Overall, the surveyed executives had positive feelings about both functions. In other words, sales and marketing leaders generally respect each other.

Keys to Meaningful Alignment

The LeadMD/Drift research identified two key attributes of companies that lead in meaningful sales-marketing alignment. First, leaders put greater emphasis than laggards on customer-focused KPIs, and they were more likely to have members of their marketing team interact directly with customers. The following table shows the differences between leaders and laggards on these issues:

The second distinguishing attribute of leaders is that they are more likely than laggards to take specific actions to foster ongoing collaboration between their marketing and sales teams, as the following table illustrates:

The Takeaway

The LeadMD/Drift study is a particularly valuable piece of research because it confirms that superficial sales-marketing alignment isn't sufficient to drive improved business performance. In my next post, I'll expand on the concepts found in this study and describe what marketing and sales leaders need to do to nurture sales-marketing alignment that is truly meaningful.

Top image courtesy of Ted Sakshaug via Flickr CC.

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Four Keys to Strong Customer Relationships

A recent report by Accenture Interactive provides several interesting insights on both the fragility of B2B seller-buyer relationships and what B2B companies need to do to strengthen long-term customer relationships. Service is the new sales was based on interviews with 748 business buyers and 1,499 B2B sellers across 10 countries and 16 industries.

All of the study respondents were directly involved in (or had oversight of) their company's buying or selling strategy or processes. About 75% of the respondents were manager-level or above, and about 25% were C-level. All the companies represented in the research had annual revenues of at least $25 million.

Accenture's report opens with some rather disconcerting statistics. The research found that 44% of B2B buyers had switched sellers in the 12 months preceding the study. The percentage was even higher among buyers who made weekly B2B purchases. Sixty-two percent of those study respondents said they had switched sellers in the previous 12 months. Another 36% of these frequent buyers said they plan to switch sellers in the coming 12 months.

When Accenture asked buyers why they had switched (or plan to switch), the three top reasons - each identified by 25% of the study respondents - were:

• Uncompetitive pricing
• Long lead times for delivery/fulfillment
• Missed delivery dates

This finding indicates that business buyers are a pragmatic group, and it suggests that, before anything else, B2B sellers need to be sure they are getting the basics right.

On a more positive note, half of the buyers interviewed by Accenture said they had increased their average number of items per purchase and grown average purchase values with those sellers who met their needs and helped them succeed.

The Accenture research also sought to identify important attributes and behaviors of B2B "leaders," as compared with "laggards." The report does not provide a precise definition of "leaders" and "laggards," but it does describe how Accenture made the distinction:

"To discern the leaders from the laggards, we weighted responses to 12 questions from the sellers' survey across three key pillars of B2B transformation:  organizational strategy, activities, and infrastructure. To give a robust and accurate picture of the global state of buyer-seller relationships, greatest weighting was given to questions reflecting the objective and measurable elements of B2B sales and service."

With this "definition" in mind, here are some of the major differences between leaders and laggards that the Accenture report highlights.

Personalization - Leaders were twice as likely as laggards to track buyer behavior and more likely to make personalized offers based on "the sum of all behaviors." The Accenture study found that leaders consistently offered greater personalization at all stages of the customer journey.

Digital and Human Interactions - Laggards tended to prioritize digital sales channels over channels with a human touch. Leaders, on the other hand, emphasized interaction channels that provide a dialogue with buyers. This includes digital channels such as chatbots and traditional sales reps and call centers.

Organizational Commitment - Leaders were more likely than laggards to view customer experience as an ongoing work-in-progress rather than as a one-time effort. Seventy percent of leaders said that providing good service and experiences had been a top or high priority in their company for at least three years.

Functional Integration - Forty-eight percent of leaders said they had fully integrated marketing functions across channels, compared to only 19% of laggards. Leaders were also more likely than laggards to have partially or fully integrated their sales and marketing teams.

The Accenture report also highlighted the benefits of being in the leader category. Ninety-seven percent of the leader respondents said they had gained market share, 96% reported higher profitability, and 90% said they had won a greater share of their customers' wallets.

This research also confirmed the importance of blending digital and human-to-human interactions to build and sustain strong customer relationships.

Image Source:  Accenture Interactive

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The Unfinished Business of Sales-Marketing Alignment

Since launching this blog in 2010, I've written about various aspects of sales-marketing alignment 26 times. And I certainly wasn't the first person to address this topic. For more than a decade, most B2B marketing and sales professionals have recognized the need to forge a more productive relationship between marketing and sales, and many B2B companies have been working on sales-marketing alignment for several years.

Yet, sales-marketing alignment remains a hot topic and an ongoing challenge for marketing and sales leaders. Yesterday, I performed a Google search using the term "sales and marketing alignment." My search produced 320,000 results. When I limited the search to the previous year, Google still returned 22 pages of results.

So, as we near the end of 2018, it seems appropriate to ask how much progress has been made toward achieving effective sales-marketing alignment.

Given the continuing interest, it shouldn't be surprising that several research studies performed in 2018 address the topic of sales-marketing alignment. The research indicates that some companies have made meaningful progress in improving the quality of the marketing-sales relationship.

Earlier this year, for example, InsideView published The State of Sales & Marketing Alignment in 2018, which was based on a survey of more than 500 sales and marketing professionals. In this survey, 75% of marketing respondents, and 68% of sales respondents reported having a good or excellent relationship with their counterparts.

Overall, however, the 2018 research shows that many companies still have work to do to turn their marketing and sales organizations into a cohesive, high-performing demand generation team.

In the InsideView survey discussed above, respondents rated their sales-marketing relationship as weak or very weak on several important demand generation activities, including:

• Defining and executing field programs;
• Sharing knowledge about customer buying processes; and
• Reporting results of joint activity.

In the 2018 State of Pipeline Marketing study by Bizible (and other firms), only 31.2% of survey respondents characterized the sales-marketing relationship in their company as aligned. Another 56.1% of respondents described their sales and marketing teams as being somewhat aligned.

In the 2019 Data-Driven Marketing & Advertising Outlook study conducted by Adweek Branded on behalf of Dun & Bradstreet, only 25% of surveyed B2B marketers said they and their sales counterparts share a full definition of who constitutes a qualified lead. Another 56% of the survey respondents said they and sales have agreed on a limited definition of a qualified lead, but they have no formal documentation of that definition in place.

The growing use of account-based marketing has elevated the importance of - and focused more attention on - building and sustaining a collaborative relationship between sales and marketing. But in the 2018 ABM Benchmark Survey by Demand Gen Report, respondents identified sales and marketing alignment as their second biggest ABM-related challenge (39% of respondents), trailing only proving ROI/attribution (40% of respondents).

Where Do We Stand?

So, where do we really stand with sales-marketing alignment as 2018 draws to a close? Many of the current "best practices" for improving sales-marketing alignment focus on two primary objectives:

1. Creating a shared understanding among marketing and sales team members regarding the key elements of the company's go-to-market strategy, including the definition of the target market, core value propositions, and customer buying processes; and
2. Establishing an agreed-upon lead management process (lead stage definitions, lead scoring criteria, etc.).

These objectives are important, but they aren't sufficient to create the level of alignment - or, more accurately, operational integration - that's required for high-performing demand generation in today's business environment.

Over three years ago, Scott Brinker described the situation eloquently when he wrote that the conventional methods for improving sales-marketing alignment weren't "so much a breakthrough in alignment as much as a negotiated peace settlement between two separate countries who share a common border. Trade policy and border control were established, facilitating commerce between them, but they were not one nation under a common flag."

What's Needed in 2019?

To take sales-marketing alignment to the next level in 2019, marketing and sales leaders need to focus on two additional objectives:

Recognized Interdependence - Effective sales-marketing alignment requires a widespread recognition by members of the marketing and sales teams that they need each other, and that an integrated approach to demand generation is essential for success. Therefore, marketing and sales leaders must constantly communicate and reinforce the importance of having marketing and sales work together seamlessly and function as a cohesive team.

Ongoing Collaboration - Effective alignment also requires marketing and sales to work collaboratively on an ongoing basis, and collaboration needs to occur naturally and spontaneously, whenever and wherever it's needed. Therefore, marketing and sales leaders must constantly communicate that informal, self-directed collaboration among marketing and sales team members is not only acceptable, but expected.

Image courtesy of m01229 via Flickr CC.

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The Missing Pieces of the Sales-Marketing Alignment Puzzle

Research continues to show that marketing-sales alignment remains a significant challenge for many companies. Earlier this year, for example, InsideView published The State of Sales & Marketing Alignment in 2018, which was based on a survey of more than 500 sales and marketing professionals.

In this survey, 75% of marketing respondents, and 63% of sales respondents reported having a good or excellent relationship with their counterparts. However, respondents also rated the marketing-sales relationship as weak or very weak on several vital demand generation activities.

Many B2B companies have been trying to crack the code on sales-marketing alignment for more than a decade. So why has this task proven to be so difficult? Part of the reason success has been elusive is that most companies have focused on only one piece of the alignment puzzle.

Shared Understanding Isn't Enough

Many of the "best practices" for achieving sales-marketing alignment are intended to create a shared understanding among marketing and sales professionals regarding the critical components of the company's demand generation strategy and process, some of which include:

• The definition of the target market, and the characteristics of the ideal customer (the "Ideal Customer Profile")
• Core value propositions
• Customer buying processes
• Lead management processes (lead stage definitions, scoring criteria, etc.)

Clearly, marketing and sales can't be aligned if they aren't "on the same page" regarding these vital aspects of demand generation. But such shared understanding alone won't automatically create the level of alignment - or, more accurately, operational integration - that's necessary for high performance demand generation.

Even with such shared understanding, marketing and sales can easily continue to operate without the required level of ongoing collaboration and coordinated effort. So, what else is needed to produce the quality of alignment that most B2B company want?

The Other Pieces of the Alignment Puzzle

Marketing-sales alignment that is highly effective requires two things in addition to shared understanding. First, there must be a widespread recognition among marketing and sales professionals that the two functions are now deeply interdependent. In other words, marketers and sales professionals must recognize that they need each other, and that an integrated approach to demand generation is essential for success.

Second, effective alignment requires marketing and sales to work collaboratively on an ongoing basis. In organizations with a high level of sales-marketing alignment, this collaboration occurs naturally and spontaneously, whenever it is needed, and it takes place at all levels of both functions. In other words, working collaboratively becomes the normal way that things get done.

How Leaders Nurture Alignment

Achieving effective sales-marketing alignment is primarily the responsibility of the chief marketing officer and the chief sales officer. The CEO must be supportive, but the CMO and the CSO must lead the alignment effort on a day-to-day basis. In addition to implementing the mechanisms designed to develop shared understanding, CMO's and CSO's need to take three other steps.

Reinforce the Aligning Narrative - The CMO and the CSO must constantly communicate the importance of having marketing and sales work together seamlessly - that the company's demand generation efforts can't produce maximum results unless marketing and sales function as a cohesive team. In addition, CMO's and CSO's should communicate that informal, self-directed collaboration among marketing and sales professionals is not only acceptable, but expected. This aligning narrative needs to be reinforced every day in some way.

Conduct Regular Sales-Marketing Forums - CMO's and CSO's should conduct joint sales-marketing forums on a regular basis. The cadence of these forums is determined by individual company needs, but they probably should occur at least monthly in most companies. The primary objective of these forums is to provide a venue for marketing and sales personnel at all levels to interact, exchange information, and discuss problems and opportunities.

Leverage Cross-Functional Teams - The CMO and the CSO should always be looking for opportunities to use cross-functional teams to deal with meaningful problems, challenges, or opportunities. Whenever possible, these teams should be composed of individuals who wouldn't otherwise work together. Not only are cross-functional teams usually the best way to address major issues, they also foster the development of personal relationships that span functional and departmental boundaries.

The Bottom Line

Creating effective sales-marketing alignment is ultimately an exercise in team building. It's essential for marketing and sales professionals to have a shared understanding regarding the major components of demand generation strategy. But shared understanding alone isn't sufficient to create the level of alignment that's necessary for high performance demand generation. In addition, marketing and sales leaders must nurture a "culture of collaboration" that transforms marketing and sales into a true team of teams.



Illustration courtesy of Olga Berrios via Flickr CC.

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What Sales Needs from Marketing

The business case for marketing-sales alignment has never been more compelling. According to the Aberdeen Group, companies with strong alignment grow revenue at a 64% greater rate than less aligned companies. The relationship between marketing and sales is improving, but it's clear that more work is needed.

Research shows that building a productive relationship between marketing and sales is still a work-in-progress at many companies. Earlier this year, I described some of the major findings of Altify's Business Performance Benchmark Study 2017. This global survey produced 833 responses, and it included respondents from sales, marketing, operations, IT, and customer service.

At first glance, the results of the Altify survey seem fairly positive. Seventy-one percent of the marketing respondents, and 66% of the sales respondents said their sales and marketing organizations "work well together."

However, the survey also revealed the existence of several significant disconnects between sales and marketing. For example, 86% of marketing respondents agreed that "marketing in our company is an effective investment of the company's resources." Only 54% of the sales respondents agreed with that statement, a gap of 32 percentage points.

A recent study by Televerde provides additional insights on the state of sales-marketing alignment from the sales perspective. The What Does Sales Need and Want from Marketing report was based on a survey of more than 200 B2B sales executives.

In this study, 62% of the surveyed sales professionals said that sales and marketing are aligned at their company, and another 18% said the two functions are very aligned. The survey report describes these results in positive terms:  "Survey results show the gap between Sales and Marketing narrowing (finally). The state of sales and marketing alignment isn't as bleak as it was 5 years ago."

The Televerde survey also asked participants about the biggest challenges they face in aligning sales with marketing. The top four responses (from a list of ten choices) were:

1. Lack of regular communication (37% of respondents)
2. Differences in the way sales and marketing successes are measured (33%)
3. The lead qualification process (30%)
4. Differences in what's important (27%)

One particularly interesting aspect of the Televerde study is that it sought to identify what sales professionals think they need from marketing to be more successful. The survey asked participants what marketing could do to help them win more deals. The following table shows the top five choices selected by respondents:

Televerde also asked study participants what marketing tools, assets, and activities were most useful to sales. The following table shows the respondents' top six choices:

So it does appear that the relationship between sales and marketing is getting better, but the improvement is painstakingly slow in many companies. It's also clear that most companies have more work to do to turn their marketing and sales organizations into a cohesive, high-performing revenue generation team.

Top image courtesy of Tomas Sobek via Flickr CC.

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Research Explains the Persistent Disconnect Between Sales and Marketing

Yesterday, I performed a Google search using the term "sales and marketing alignment." My search produced 239,000 results. When I limited the search to the past year, Google still returned over 50 pages of results. So clearly, sales and marketing alignment is still a hot topic in the B2B sales and marketing world.

Marketing and sales professionals have long recognized the importance of forging a more productive relationship between sales and marketing, and some companies have made progress in improving the quality of the marketing-sales relationship. It's also clear, however, that many companies have more work to do to turn their marketing and sales organizations into a cohesive, high-performing demand generation team.

Recent research by Altify helps explain why sales-marketing alignment is still challenging for so many companies. The Business Performance Benchmark Study 2017 was a global survey that produced 833 responses. Survey respondents represented a wide range of industry verticals and company sizes. The study also included respondents from a variety of business functions including sales, marketing, operations, IT, and customer service.

The Altify study addressed a broad range of issues, including the performance of marketing and sales. Altify reported some of the study results by the business function of respondents. In particular, the study report identifies how sales respondents and marketing respondents answered several questions. These responses highlight some of the troubling "disconnects" that still exists between sales and marketing.

Altify asked study participants if they agreed with a series of statements regarding sales and marketing performance. The table below shows the percentage of sales respondents and marketing respondents who agreed with seven of these statements. The table also shows the "gap" between sales and marketing that exists with respect to each statement.

These survey findings reveal attitudes that make the lack of effective teamwork between marketing and sales easy to understand. Only half of these sales respondents believe that their marketing team understands their customers, and just over half (54%) believe that marketing in their company is an effective investment of company resources. On the flip side, only about half (52%) of these marketing respondents believe that their sales team is effective at qualifying sales opportunities.

The extent of the disconnects shown in the table is surprising because 66% of the sales respondents and 71% of the marketing respondents in the study said that their sales and marketing organizations "work well together." One can only wonder what these study participants meant by "work well together."

As the above table shows, the disconnects between marketing and sales are still numerous and significant. So it shouldn't be surprising that many companies haven't achieved the level of cohesive teamwork between sales and marketing that's required for a high-performing demand generation system.

Top image courtesy of Tambako The Jaguar via Flickr CC.

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