Sales+Marketing Collaboration: A Method for Permanent Conflict Resolution and Business Growth
Smarketing and Conflict Resolution, image Dollarphotoclub_74370616
Executive Summary
During the last 20 years of practice as a professional in the fields of marketing and sales, I have observed three crucial problems in large B2B companies.
Loss of sales revenue due to the misalignment of Sales and Marketing departments.
High subsequent internal costs generated by this inefficiency.
Tense work environments caused by disharmony between the two departments.
When the needs of Sales, Marketing, management, and their customers are addressed holistically, all of these problems can be resolved. As I will argue below, the best practice is to deploy a two-fold approach to the issues—financial and personal—at the heart of the problematic Sales/Marketing relationship. The goal is to deliver structure, measurable results and transparency of progress to all stakeholders, and, with two folds and three steps, such results are within reach.
Here is a Sales-Marketing Collaboration Program that consists of:
Initial Discovery Session
Opportunity Assessment and Oportunity Review
Dedicated Sales and Marketing optimization strategy
At the end of this program, the key departments of Sales and Marketing will be aligned, and the organisation should experience significant sales revenue and profit growth, as well as a much more harmonious work environment that attracts higher-quality talent.
1) Introduction
It is a well-known fact that the larger an organization is, the more important good communication between departments becomes. This is especially the case in companies that have separate Sales and Marketing departments, each with a sizable number of employees. A good relationship between Sales and Marketing is often considered an oxymoron. Rather than addressing the issue, many managers have merely become accustomed to it. When Sales and Marketing are disconnected from each other, the appropriate message often fails to reach the end user. Thus, this conflict leads to several problems such as profit losses.
In order to find the best solutions currently available, the following key questions must be considered:
What causes the two departments to clash instead of working together for better results?
How does a lack of communication affect the company and its performance?
2) Analysis
Within small companies, Sales and Marketing are rarely discrete departments. In general, marketing specialists in small-sized companies handle relationships with clients as well. This is a cost-effective solution, reducing payroll expenditures associated with additional sales staff. As the organization grows, so too does the number of clients, and new employees are inevitable. For the majority of businesses, marketers and salespeople, since they are assigned ever-more specialized roles within the organization, will ultimately be organized into separate silos.
2.1) The Communication Problem
In theory, Sales and Marketing should work together to attain optimal distribution results. Ultimately, they are both customer-facing and they have similar goals: to increase sales and profit. However, the strategies they use to achieve this goal are further apart than their common goals suggest: Marketing is focused on the 4 P’s (Product, Pricing, Promotion and Positioning) and takes a longer term perspective, while Sales is responsible for front-line contact with customers looking for near term results.
Differing cultures and attitudes within the silos leads to communication breakdowns and failed attempts at cooperative enterprise. Since Sales is the department that engages directly with customers, Marketing can be out of touch with those who are purchasing the product. Customer feedback rarely gets passed back up through the pipeline or the funnel to Marketing. Marketing, operating in the blind, can be responsible for inappropriate product-messages or pricing on target segments. At the same time, without access to professionally designed promotional materials, salespeople who aren’t coordinating with Marketing often rely on outdated or off-message company presentations. Sales departments are frequently resistant to holistic strategies based on a single message. In a world in which consumers are more sophisticated and better informed than ever, uniformity is more important than ever. Without a collaborative strategy in place, churn is inevitable.
The communication that occurs between Sales and Marketing at their point(s) of intersection is an important key to breaking through to increased profit. As Fisher pointed out as long ago as 1997, the communication between Sales and Marketing has to be both frequent and bi-directional to generate positive outcomes (Fisher, 1997). Before we turn to the strategies that can affect this kind of dialogue, it is first necessary to understand the symptoms and causes of ineffective or non-existent communication between Sales and Marketing departments.
2.1.1) Overlapping Duties
Perhaps you’ve noticed how personalities that are almost identical often rub each other the wrong way. The same could be said of Sales and Marketing departments. Their job functions are so similar as to frequently overlap. In The Profit Maximization Paradox, Glen Petersen paid particular attention to this as a cause for friction. Sales and Marketing drive the same engine, and so, Peterson says, they tend to point the finger across the aisle whenever profits are not where management wants them to be. His research showed that salesmen spend, on average, 40% of their time preparing presentations for clients, using less than 50% of the materials Marketing produced for that very purpose (Petersen, 2008). With blame moving in both directions and distrust abounding, it can seem as though a productive relationship between the two dug-in sides is impossible.
2.1.2) The Zero-Sum Game
Put any two departments in a zero-sum game, and it won’t be long before they’re at each other’s throats. When Sales and Marketing departments are in a constant competition for the same salary and resource pool, the resulting problems are easy to imagine—salespeople blame marketers for spending too much money without any tangible results, while the latter blame the former for not doing enough with the leads or collateral they have generated.
Since both departments usually have, as it were, red hands, finding a culprit to whom the blame can be attached is difficult if not impossible. That does not mean that there aren’t plenty of experts who are coming down on one side or the other. Rod Sloane says that Marketing’s “avalanche of content” is not the solution; “Revenue focused sales people,” he says, “know that better conversations make the difference. Let your sales team off the leash” (Sloane, 2013). Katy Keim of Lithium Technologies sees things quite differently: “Smart companies”, she says, are “moving money from the sales portfolio directly to the marketing portfolio” (Keim, 2013). If there is a culprit that can be singled out, it is not Marketing or Sales; it is, rather, the ineffective relationship between the two departments—ineffective largely due to communication problems, which are exasperated by overlapping duties and zero-sum resource allocation.
2.2) Profit Consequences
As expected, the company may experience a substantial dip in profits if the conflict escalates. When Marketing and Sales do not work in sync, leads are lost, ROI is minimal, and the sales cycle is interminable.
In 1992, Hindman and Svikola wrote a study for the Harvard Business School in which they showed how much profits can grow when a single employee’s productivity rises. They found that profit only increased by 3% when sales cost was reduced by 5%. However, synergistically managed sales, which significantly reduced the length of the sales cycle, raised per-person revenues by 25% and brought the P/L ratio as high as 100% (Hindman and Svikola, 1992).
As tempting as it may be to focus on reducing sales costs as a way to boost profits, its impact is minimal. As a strategy, introducing synergistically managed sales offers a much higher return, resulting in as much as a four-fold increase in profits.
2.3) Loss of Market Opportunities
Organizations that allow Sales and Marketing to continue business as usual in their respective silos often allow new markets, and the opportunities these markets contain, to slip through their fingers. Without a holistic approach, salesmen and marketing employees act too frequently within their own narrow, departmental self-interest. In Benson Shapiro’s words: “In today's hyper-competitive world, the sales and marketing functions must yoke together at every level—from the core central concepts of the strategy to the minute details of execution.” (Shapiro, 2002)
Without such cooperation, the client becomes the collateral damage in the battle between departments that should be goal-aligned. Clients and prospective customers are met with inconsistency and imprecise execution. Whether it is an unhappy customer or an off-put prospect, the company’s profit is the first thing to suffer. The ripples can spread market wide, ruining a reputation that may have taken decades or longer to establish.
When Marketing and Sales are in lockstep, every point of contact in the sales funnel or pipeline bears a distinctively uniform fingerprint. Their disparate skill and mindsets—once the source of animosity—can be applied to problems in innovative and solution-oriented ways. Whether existing customers or new ones, uniformity is strongly felt and highly appealing. Improved sales figures and higher net profits are the inevitable result.
3) Solutions
Solving the Sales/Marketing conflict should be an important duty for any company. Of course, this requires effort by all those involved. The following chapter outlines some of the measures that organizations experiencing this conflict—and suffering from its effects—can take.
3.1) A Two-Fold Approach
The first issue to address is that which is most responsible for poisoning the well in organizations with large Sales and Marketing departments operating in discrete silos: mindset. Marketing teams need to understand that, since salespeople are the ones with the most front-line experience with customers, salespeople may be the key to conjuring up an effective marketing strategy. This experience has given them shareable information on the way the market is evolving in real time; if marketing wants to understand customers’ actual (as opposed to perceived) wants and needs, they’ll need to stop treating Sales as an enemy and start treating them like a resource.
At the same time, sales representatives need to stop viewing marketing professionals as little more than a resource drain. In interviews with salespeople, I have often noticed a tendency to see Marketing departments as spending the money that Sales earns. The days of charismatic salesmen driving sales are over: if Sales wants to bring the absolute best sales tools to market, it’s Marketing that is going to provide them.
A weekly meeting between the two departments might be tense at first, but if the right processes are in place to engage Sales and Marketing in productive dialogue, research is showing that they are able to accomplish far more together than they ever could apart. Sales can contribute valuable market insight well ahead of the marketing reports that are so often out of date by the time
Marketing gets them; with more up-to-date information about their customers and their market, Marketers can feed better qualified leads into the pipeline or funnel and they can provide sales with the kind of collateral that Sales is investing so much time preparing for themselves. If, as I pointed out above, sales representatives are spending around 40% of their time preparing their own materials, imagine how much more effective salespeople they can be if they only allow Marketing to feed them the leads and collateral they need so they can spend their time making the most of those leads. This, of course, means that they will first need to share what they know about the market and the customers with Marketing, but that kind of relationship is exactly what we’re trying to effect. Sales enablement should be one of the primary aims of Marketing, but Sales can, in turn, enable Marketing through constructive, results-based dialogue.
The best way to bring Marketing and Sales to the same table so that the inter-departmental conflict can come to an end is a restructuring of compensation—this, of course, has to come down from above. Since Sales and Marketing departments often share a budget, there is no reason that can’t share, if not identical, at least similar compensation structures. Separating the Sales and Marketing budgets only furthers
the silo mindset, so establishing a sales target for which both teams are responsible is one way to bring both parties to the table with renewed drive and focus. So long as they share rewards—and, crucially, consequences as well—Sales and Marketing departments have every reason to coordinate their efforts.
3.2) A New, Future-Proof Solution
A lasting, future-proof solution needs a holistic strategy. Moreover, such a solution needs a dedicated specialist who can help to implement and, in some cases, maintain the relevant mechanisms.
My own experience in senior sales and marketing roles in some of the largest corporations all over the world helped me to understand that a synergistic solution is necessary, especially when it comes to B2B companies. There is not a single recipe for success, every business is different and every conflict manifests itself differently.
Though each of the steps is tailored to specific organizational and personnel issues, there is a tried and tested three-Step-Program that drives organizations towards the necessary synergistic solutions.
The three steps are as follows:
1) Initial performance review
2) Sales and Marketing optimization program supported by a cloud-based application
3) Ongoing efficiency improvement
Rather than a package that the managing board implements, this approach entails a continuous work cycle, one that involves the company, as well as the consultants.
The Sales and Marketing Optimization Program offers both Sales and Marketing departments access to real-time information. More than a CRM, this cloud-based app grants instant access to any file, from anywhere. There will be no more need for emails between employees, requesting various materials from each other. Ongoing efficiency improvement is the final step that guarantees that this new approach is future-proof. Our experts will guide the enterprise through the process and perform ongoing efficiency and implementation analyses to ensure that targets are reached, not just once, but every month, every quarter, every year. This will mean a long-term relationship; whenever the market or the teams change, Peter Strohkorb Consulting will be there to help do what is necessary to keep your Sales and Marketing teams collaborating effectively with the best tools and know-how in the industry.
4) Conclusion
In conclusion, there has never been a better time for Sales and Marketing to support each other more effectively. It cannot be denied that the existing conflict between Marketing and Sales has negatively influenced countless organizations large and small around the world.
Solutions that respond to the unique circumstances of each enterprise are available for those organizations willing to bring their Sales and Marketing departments to the table together. It is time to go off the beaten path.
Cutting costs is not effective anymore when profit growth is sought after. The key is to increase the sales team performance, have them work at full capacity and deliver the best results.
List of References
Fisher, R. J., Maltz, E. & Jaworski, B. J. (1997),
‘Enhancing Communication between Marketing and Engineering: the Moderating Role of Relative Functional Identification’, Journal of Marketing 61(3)
Harvard Business Review (2013), ‘End the War between Sales and Marketing’, http://hbr.org/web/special-collections/insight/marketing-that-works/end-the-war-between-sales-and-marketing
Hindman, S. P., Svikola, J. J. (1992), ‚Managing Top-Line Computer Applications’,
Harvard Business School Publication
Keim, Katy, et al. (2013) Straight Talk from CMOs On Marketing and Sales Alignment, Lattice
Kotler, P. (1998), ‘Principles of Marketing’, 8 edition
Moenaert, R. K., DeMeyer, A., Souder, W. E. & Deschoolmeester, D. (1992),
‘Information Styles of Marketing and R&D Personnel during Technological Product Innovation Projects’, R&D Management 22 (1)
Petersen, G. S. (2008),‘The Profit Maximization Paradox: Cracking the Marketing/Sales Alignment Code’
Sloane, R. (2011), ‘Is your Marketing killing your Revenue?’,
http://no-bullbusiness.blogspot.com.au/2011/12/is-your-marketing-killing-your-revenue.html
Shapiro, B. (2002), ‘Want a Happy Customer? Coordinate Sales and Marketing’, http://hbswk.hbs.edu/item/3154.html
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Peter Strohkorb is a Revenue Funnel Specialist and Smarketing™ Expert. His methods have delivered revenue improvements for his client of up to 433%, some individuals have become millionaires.
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