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How to align sales and marketing: Part 1

November 13, 2019

Michael Levy, Principal at GZ Consulting, writes exclusively for the Cognism blog in the first of a two-part series.

For at least a decade, I’ve heard talk about aligning sales and marketing.  Initially, it seemed more like a wish than an actual transformation of the two revenue generation groups. 

After all, sales and marketing were often badly misaligned with little agreement on what constituted a qualified lead or which metrics signified success.  Marketing would spend thousands of dollars ginning up the B2B lead generation machine, throwing money at SEO, SEM, content generation, email campaigns, programmatic advertising, and other digital tools.  From this maelstrom of activity came a set of hard-earned marketing qualified leads (MQLs), which they would send over to sales.

And what did sales reps generally do with the MQLs?  They often ignored or cherry-picked the leads.  Most leads were disregarded or contacted only once or twice.  Sales reps would grumble about the quality of the leads and then generate their own leads via B2B prospecting and web research.  It was inefficient and expensive.  Marketing was annoyed that their MQLs rarely became sales qualified leads (SQLs), and sales reps complained about the weak leads.  There was too much finger-pointing and too little cooperation.

The problem was made worse by a disagreement about metrics and objectives.  A June LinkedIn study of B2B marketers found that 77% measure ROI after a month and that 52% measure ROI after a month but have sales cycles of three months or longer. 

Marketing often focuses on intermediate marketing metrics such as click-through rates, downloads, likes and MQLs generated.  These key performance indicators are only loosely connected to the bottom line, due to the lack of attribution and the disconnect between MQLs and SQLs.  Conversely, sales reps and management are top-line focused in their B2B sales metrics – meeting quota and growing company revenue.

Four strategic transformations have begun to address this misalignment: Account-Based Marketing (ABM), the rise of the Chief Revenue Officer (CRO), B2B Data as a Service (DaaS), and Sales Engagement Platforms (SEP).

ABM

While demand generation is still an important marketing strategy, ABM has quickly risen to the top of the B2B marketer’s toolkit for sales acceleration.  Account-based marketing identifies the top customers and prospects based upon an Ideal Customer Profile (ICP).  While an ICP can be defined as a set of firmographic selects (e.g. size, geography, industry codes, installed technology), this approach only makes sense when launching a company or product. 

Once a firm has established itself, the ICP should be based upon a company’s own data (e.g. wins, losses, renewals, upgrades, churn).  By combining company data with a reference B2B data set, a better targeted ICP can be defined.  This customer base can then be expanded to identify similar companies.  Thus, the sales and marketing organizations can identify a common set of company properties (firmographics, technographics, business signals, sales triggers) to expand their universe of high-priority prospects and customers.

The ICP provides a top company and prospects list for the organization.  ICP accounts tend to be mid-size and enterprise clients (though fast-growth start-ups may also make the list).  As larger companies have well-defined functional roles and purchasing processes, SiriusDecisions has argued that sales should be targeting demand units (buying committees) consisting of purchasing, technical decision-makers, economic decision-makers, and influencers. 

Targeting one or two people at a firm or blanketing an organization with marketing are both inefficient.  If the rep only sells to end-users or technical decision-makers, he or she misses most of the demand unit members. 

ABM, with its focus on demand units at top customers and prospects, supports targeted messaging across the full set of decision-makers and influencers.  Furthermore, focusing on a smaller set of companies in distinct verticals allows for the development of narrowly defined messaging and content based upon demand unit personas.

Want to learn more about ABM? On Wednesday 9th October 2019, we assembled 3 ABM experts for an informative and insightful webinar. Click below to see our round-up blog.

Webinar recap 6 vital ABM questions - answered V1 FINAL-01

Rise of the CRO

Over the past decade, power has shifted from sellers to buyers.  Open web information and the ability to conduct purchasing research without raising one’s hand have greatly increased the power of buyers. 

In response, sellers need to place a greater emphasis on the buyer’s journey and evaluate all prospect and customer touchpoints.  The traditional model of marketing front-ending prospect discussions and sales “closing the deal” no longer holds.  Sales reps need to be involved earlier in the process with sales and marketing passing the communications baton back and forth.

Today’s business buyers have more choices, more bargaining power, and higher expectations than ever. And the growing use of “as-a-service” and other subscription-like business models has elevated the importance of long-term customer relationships, while also making them more fragile. Therefore, there’s a growing need to provide outstanding experiences at every touchpoint across the entire customer life-cycle.

- David Dodd, Point Balance

Subscription models also place a greater emphasis on customer satisfaction and coordination between functions.  Otherwise, churn will increase, and upsell and cross-sell opportunities will be missed.  A small decrease in the churn rate has a significant impact on the lifetime value of customers.

In this environment, maintaining distinct sales, marketing, and support departments under separate management makes less sense.  Instead, greater coordination and alignment between the functions are required to grow revenues and reduce churn. 

We are beginning to see firms create a Chief Revenue Officer role, which oversees sales, marketing, and customer success teams.  The CRO is responsible for managing the customer journey and defining metrics and processes which support the customer and grow the top line.

While this blog focused on process changes that promote sales and marketing alignment, the next instalment will address the cloud-based sales acceleration services which are transforming sales and marketing.

For more of Michael’s B2B industry insights, please visit his website: https://gzconsulting.org/