A recent survey by the Aberdeen Group noted that sales and marketing teams with self-described good alignment saw 20% annual revenue growth at their companies, while teams that were poorly aligned saw their company revenues decline by 4%. Another recent study by the Harvard Business Review noted that 87% of survey respondents admitted to having negative opinions and vibes between their sales and marketing teams. The ever-widening gulf between sales and marketing teams across all industries threatens to derail the growth trajectories of these companies. Using data-driven sales performance metrics, however, marketing and sales teams can come together to form a synergistic and collaborative partnership that drives better performance and revenue growth. Here are 5 proven sales and marketing alignment tactics that any company would be wise to implement.
1. Implement a service-level agreement
A service-level agreement (SLA) is a formal commitment between the sales and marketing teams that specifies how both parties plan to meet shared goals for revenue growth. The marketing team pledges to deliver a set number of leads – as well as a certain benchmark in terms of the quality or types of leads – each month or quarter. Meanwhile, the sales team promises to follow up on those leads in a timely manner, while describing how they plan on tackling these leads before abandoning them at the right time if they appear to not be an ideal fit.
To determine a specific lead goal, look at your Lead-to-Opportunity conversion rate, as well as your Opportunity-to-Deal conversion rate. Pair that information with your company’s overall bookings goal. This raw leads goal is a good place to start, before going on to benchmarking leads to separate higher-quality ones, or Marketing Qualified Leads.
2. Assign value to Marketing Qualified Leads
Which would you rather have – 100 leads that close at a 4% rate or 40 leads that convert at a 10% rate? In either scenario, you end up with 4 customers, only the latter situation carries with it a much lower customer acquisition cost. Therein lies the power of working with Marketing Qualified Leads, or MQLs.
Each company will have its own unique definition of what an MQL looks like. Your definition should reflect an amalgamation of the lead’s traits, as well as their actions. The customer’s traits should adhere as close as possible to your ideal customer profile – size, industry and customer base are some of the key considerations. Their actions are determined by the interactions or engagement they have had with your company. Has the lead engaged with you on Twitter? Or have they just put in a cursory Google search to start finding out more information? Whatever your definition for an MQL is, it is essential that both sales and marketing teams come to a concrete agreement.
Instead of just isolating the best leads, it would be more helpful to assign an expected monetary value to each of these types of leads. Determine this value by looking at your historical pipeline to see how a particular group of leads or leads from a specific source have been valued at in the past.
3. Define and study the sales funnel
Just as both parties must come to an agreement on what an MQL is, so must they agree on the definition and stages of their sales funnel. The sales funnel should have a shape similar to the diagram below, with a wide pool of leads at the top and only the most qualified prospects at the bottom. The number of stages within the sales funnel should be determined according to the buyer’s process, instead of the more traditionally-used seller’s process. The reasoning behind this is to adhere more closely to the mindset of your potential customers. In order to understand why you are losing customers, it would be helpful to think like them and put your reps in their shoes, mapping each sales funnel stage to the corresponding point of where the buyer is in the sales cycle.
To figure out why your opportunities are leaving, you need to know where they are leaving, and having a well-defined sales funnel can help you ascertain that. Looking at your sales funnel conversion rates, you can determine what the probability is of your sales reps advancing an opportunity from one stage to the next stage. If many opportunities are being lost between the demo and the trial phase, for example, your sales reps might not be qualifying leads for demos in the first place or handling demos correctly. However, if a great deal of opportunities are being lost early, perhaps your marketing team is supplying the wrong types of leads.
4. Closed loop data reporting
When it comes to aligning sales and marketing, making data-driven decisions is crucial. Historical data and information can help both teams analyze lead quality, calculate marketing ROI and – perhaps most importantly – monitor progress toward the agreed-upon goals of the SLA.
There must be open communication and shared data between both teams. Both sales and marketing managers must have regular access to information and reports from the CRM, as well as any other integrated marketing, analytics or reporting suites such as HubSpot or InsightSquared. Automatic synchronization between all marketing, reporting, analytics and CRM platforms will allow important information like contact touches, lead sources, conversion rates per channel, marketing ROI and revenue numbers to be shared freely.
5. Meet regularly
Finally, both sales and marketing teams need to meet together regularly, in addition to their weekly or monthly team-only meetings. Include the marketing team on relevant sales emails – make sure they are truly relevant though, to avoid spamming each other’s inboxes – and vice versa. Hold collaborative meetings at a time that is convenient for everyone. For example, marketers should be aware not to schedule meetings during prime calling times.
Take every opportunity you get to highlight a great achievement by the other team. If marketing stumbled upon a new lead source that is converting at an astounding rate, pat the marketing team on the back at this meeting. If a dogged sales rep was able to close a deal on what had been termed a lower-quality lead, applaud them while pledging to deliver higher-quality reps.
Data-driven decision-making is the key to true alignment between marketing and sales. Implementing the right sales analytics and relevant sales reports into a collaborative environment can make for truly powerful results. To learn more, please download our free eBook, which goes into Sales and Marketing alignment in greater detail.
Has your company had success aligning your sales and marketing teams? Share your story below.