Chapter 4

Mending the Rift Between Sales and Marketing

From Problems to Solutions

In Chapter 3 we looked under the hood of the sales-marketing interface and identified a range of potential causes of dysfunctional interfaces. We then proceeded to classify these root causes into five categories: (1) different subcultures in sales and marketing, (2) different backgrounds of the individuals involved in the interface, (3) sub-optimal organizational structures, (4) a lack of joint activities and interaction, and (5) misaligned organizational systems and processes. In this chapter we will present solutions that a company may implement to deal with these root causes and improve its sales-marketing interface. While there is a broad range of solutions available, for the sake of clarity we group them into three categories (Figure 4.1):

1.Solutions within the sales and marketing functions, which include all measures that can be initiated and implemented within the sales and marketing groups. For instance, a marketing manager may put the sales-marketing interface on the agenda, hire people with the right collaborative mindset, or offer training to instill the right attitude and develop the required skills in marketing personnel. These solutions are all about making sure that you have the right people in place for an effective sales-marketing interface. In other words: It is about assembling a team of competent players with complementary skillsets.

2.Solutions at the interface between sales and marketing, which encompass everything that is directly related to an effective interaction between the sales and marketing groups. For instance, establish front-to-end sales-marketing processes, create hybrid teams that jointly perform strategic and tactical activities, facilitate effective communication, and stimulate social bonds. These solutions are geared towards getting the sales-marketing team to play a winning game.

3.Solutions at the company level, which comprise all actions at the corporate level that contribute to developing and maintaining an effective interface between sales and marketing. For example, move people from sales to marketing, establish joint objectives, and provide ongoing top management support for an effective sales-marketing interface. These solutions are designed to enable the team to win not just a single game, but stay undefeated, over a long term.

Figure 4.1 Classification of sales-marketing interface solutions

In sum, a company’s actions to improve its sales-marketing interface are all about getting the right people in the sales and marketing teams, getting them to interact and communicate in an optimal manner, and facilitating this interaction and communication long term at the corporate level. In the rest of this chapter, we will take a closer look at each of these solutions.

Solutions at the Functional Level: Assembling the Team

It all begins with building a successful team: Hiring the right people and getting them into shape to get the job done. Both marketing and sales need to assemble the right team for effective collaboration across the interface. This is the corporate equivalent of scouting for and acquiring the best players you can afford, putting them through a rigorous training program to build a winning team and using incentives and pep talks to get them ready for the big game. Key solutions at the functional level include: (a) hire the right people, (b) develop the right mindset and skills, and (c) provide them with the right leadership.

Hire the Right People

Marketers and salespeople have different backgrounds and different personalities, and therefore they bring different perspectives to their jobs. The inherent differences between salespeople and marketers are at the heart of the conflict between sales and marketing. Although both have a commercial background and are focused on the company’s customers, they nevertheless tend to have quite different roles and responsibilities. A marketer is responsible for researching the company’s products or ­services, exploring target markets, determining price points, developing channels, branding products and services, developing compelling value propositions, and developing marketing strategies. While the company’s marketer operates behind the line of fire, the salesperson is the one hitting the pavement and battling it out every single day by interacting with ­customers, conducting negotiations and closing deals¹ (Table 4.1).

Table 4.1 Differences between marketers and salespeople

Marketers	Salespeople
Perform market research	Manage accounts; sell products and services
Segment markets; explore target markets	Interface with current and prospective customers
Perform competitive analysis	Respond to customer objections
Develop value propositions	Identify selling opportunities at customers
Develop pricing strategies	Know how to close a sale
Brand products and services	Manage channel relationships
Develop sales channels	Provide after-sales service
Develop and analyze marketing campaigns	Know the firm’s products and services inside out
Adjust marketing strategies based on data and feedback	Present the products and services to customers in a convincing manner

Source: Rouziès et al. (2005).

Commenting on the varied roles and responsibilities of sales and marketing personnel in any company, one marketing executive we spoke with in a packaging company said:

“If you think about what goes on between sales and marketing, who they are and what they do; it is not surprising that they struggle with each other…it is a conflict by design.”

So, even when marketing and sales personnel are engaged in tasks that on the surface may look very disparate (and at times, conflicting); they are very closely related. Therefore, you want them to communicate and collaborate. You certainly will want your marketing managers helping your salespeople craft their presentations, explain the core selling points, explain the strategy rationale, and provide market data to handle customer concerns. At the same time, you want your salespeople working with your marketers so that they have a clear idea regarding how marketing strategies are received in the field.

The three vignettes from Chapter 2 highlight these issues in great detail. Companies stand to benefit from the diversity that sales and marketing bring to the table if the individuals involved have the right collaborative mindset and skills. If that is the case, the inherent differences between salespeople and marketers can actually be an asset, because they increase creativity, productivity, and the team’s problem-solving capability, and bring synergy within the sales-marketing interface.

The obvious way to ensure that your employees have the right collaborative mindset is to hire the right people. People who understand and respect what their counterparts do and more importantly, how their work impacts and aligns with the work of their counterparts and vice versa. In hiring new employees, companies should not just look at narrow job-related experience and skills, but also at broader skills and attitudes that are characteristic of effective collaborators. Key to success is to know exactly which collaborative traits and skills you are looking for and design a hiring process that reliably uncovers them. For instance, Southwest Airlines interviews potential new employees in groups. In these groups, each applicant is asked to stand up and describe his or her most embarrassing moment to the group. The purpose of this approach is not to test the candidate’s confidence, but to watch how the other applicants respond. Southwest recruiters look for clues to empathy, for signals that an applicant feels bad for the person talking about the embarrassing experience. Because, as Southwest has discovered, empathy is the key ingredient in providing superior service to customers.²

In the case of salespeople, you need to look for salespeople that are not only good at selling, but also have some affinity with marketing. They must understand the key marketing concepts and be willing to look beyond the scope of their sales-related job description. Similarly, many B2B companies feel that the best marketers are the ones with prior work experience in sales, preferably at the same company or at least in the same industry since they understand what it takes to sell a product and the related challenges. Especially small B2B companies that are about to ­create a tentative, embryonic marketing function are likely to recruit a marketer from their own sales department.

Develop the Right Mindset and Skills

If your employees lack the required collaborative mindset or skills, or if they have become complacent over the years, you may remedy the situation by developing a collaborative mindset and skills through training. As Phil Jackson, the legendary basketball coach of the Chicago Bulls, explains in an interview with Oprah Winfrey, you need mindfulness: “As much as we pump iron and we run to build our strength up, we need to build our mental strength up. . . so we can focus. . . so we can be in concert with one another.”³ A training program to develop the collaborative mindset and skills that salespeople and marketers need to contribute to an effective sales-marketing interface covers several areas:

•Cross-functional basic concepts and language. Even though salespeople and marketers have similar educational backgrounds (they are even likely to have read the same textbooks), their careers have taken them in different directions. Both specialized in different areas, each with its own specific concepts and terminologies. Salespeople respond to Requests for Proposals (RFPs), use consultative selling to advance prospects through the buying cycle, negotiate terms of sales and exclusivity, and ultimately close the sale. Marketers monitor the changing characteristics of market segments, identify value gaps and develop compelling value propositions for specific target customers. As in every other situation where people need to get along, success begins with both sides understanding each other’s language. Salespeople need to brush up on their basic marketing knowledge and become familiar with the latest concepts and trends, such as big data, reputation management, brand equity, customer experiences across multiple touch-points, and online customer communities. Marketers must become acquainted with how salespeople interact with customers, the changing demands of customers and the characteristics of new effective sales approaches. For instance, in a recent article the authors argued that salespeople need to change how they sell. The familiar method of solution selling, where a salesperson creates value for customers by aligning an acknowledged customer need with a solution that is demonstrably better than the competition’s may evolve to insight selling that revolves around seeking out customers that are primed for change, challenging them with provocative insights and coaching them on how to buy.⁴

•Empathy. Effective collaboration requires that the parties involved possess empathy, which is the capacity to recognize emotions that are experienced by another person. There are two types of empathy: (a) Cognitive empathy: The ability to perceive what another person is thinking and (b) Affective empathy: The ability to sense what another person is experiencing. Cognitive empathy is a deliberate skill that everyone can learn, for instance through the aforementioned training in each other’s discipline and language or through role playing. Affective empathy is a more natural capability that can nevertheless be developed, for instance through self-reflection and by encouraging social bonds. Seminars and brown bag sessions also help to recognize different personality styles and effective ways to deal with them. Empathy helps salespeople and marketers to understand each other, build rapport, and develop trust, which are key ingredients for effective communication. It bridges the cultural divide, reduces the “us-versus-them” attitude, helps to avoid or diffuse conflict, and encourages congruent emotions and a focus on joint objectives. Although marketing tends to be global in its outlook and sales to be local, everybody needs to “glocalize;” that is, be sensitive to both global and local issues.

•Communication. An understanding of each other’s discipline and language, combined with the ability to empathize, form the basis for effective communication between sales and marketing. This communication runs the gamut from periodic formal meetings to informal water fountain conversations. While communication tends to be associated with people talking with each other, which requires a common language and understanding of each other’s perspective, the most critical communication skill is effective listening. Because listening does not come naturally to most people, many conversations consist only of people taking turns to speak, or they are talking past one another. A useful classification distinguishes three components of listening: (1) sensing—capturing the verbal and non-verbal stimuli consisting of words, gestures, or tone of voice of the person speaking, (2) evaluating—assigning meaning to the message and evaluating its importance, and (3) responding—communicating back, or sharing additional information, if needed.⁵ Research also suggests that listening may be taken to a higher level when the listeners engage in sensing, evaluating, and responding activities with both cognitive and affective empathy—that is, when the listeners put themselves in the shoes of the communicator and try to understand the deeper-level emotions that are imbued in the message.⁶ If sales and marketing personnel engage in listening at such deeper levels, it can create a respectful, safe environment that will allow both parties to elicit additional information from one another in order to engage in collaborative problem-solving, as opposed to being dismissive of each other.

•Expectations. The success of a collaborative effort is strongly determined by the expectations of the participants. Each employee has expectations about the relationship with colleagues from another department and these expectations serve as the yardstick to measure relationship success. The expectations represent people’s vision of how the collaborative relationship will develop; even when they are implicit and reside in the unconscious mind they will drive future decisions and actions. Expectations are partly based on previous experiences—in the same company, another company, or even a completely different setting—and partly on the leadership and communications provided by the company. This means that expectations can be managed and employees need to be taught what to expect as they enter into collaboration with colleagues from another department. Expectations may also be formalized so that there are defined boundaries around one party’s expectations of the other. For example, during our research, we noticed that sales and marketing personnel in some companies had worked out a set of shared objectives for themselves and consequently formalized their commitments around those objectives. In one software company, each quarter, marketers were expected to give every territory manager at least three credible customer leads. The territory managers, in turn, were expected to make an initial and a follow-up contact with the lead in the first 8 weeks of receiving the lead and also prepare a business case for those leads that would assess their sales potential and resource needs. Marketers and territory managers would hold a conference call at the end of every quarter and assess the progress each function had made against the shared objectives they both had adopted.

•Conflict resolution. Any effective training program for collaboration must prepare employees for the conflict ­episodes that will inevitably occur. No matter how ­effective and successful a relationship, changing expectations, ­strategies, and external events are bound to cause conflict and employees need the skills to identify the early warning signs of conflict and to defuse them before it can escalate into a crisis. Some conflicts will be task-related and require effective negotiation skills to deal with; others are emotional and related to personality clashes between people. Emotional conflicts tend to last longer and be more detrimental to the professional relationship. Training in conflict resolution includes understanding the key components that are present in all conflict situations, recognizing different stages of conflict escalation, recognizing the triggers to aggressive behavior, responding to conflict and aggression, and applying skills to defuse conflict situations.

Provide Leadership

It is the task of the sales and marketing leadership to hire the right employees and provide them with the training that is necessary to develop the required collaborative mindset and skills. In addition, they need to set the right tone for an effective interface between sales and marketing. There are several ways in which the sales and marketing leadership can create the right corporate environment for effective collaboration.

Sales and marketing leaders should start by putting collaboration between the two functions on the agenda. They must actively promote collaboration, and explore different ways to improve collaboration. They must promote and communicate trust as the cornerstone of an effective relationship. They must share information with their teams and make their own decision-making processes transparent.

In addition, sales and marketing leaders also need to publicly display their solidarity in front of the sales and marketing organizations by putting corporate interests above their respective functional interests. They need to create a common purpose and vision and get their teams behind it. One way to do this is to identify important business outcomes that can only be achieved through effective collaboration between sales and marketing, such as creating superior value for customers. The sales and marketing leadership may then lead the activities that will translate these corporate objectives into complementary functional objectives and activities.

Sales and marketing leaders should also encourage and help employees explore opportunities for involvement in each other’s activities. Even activities that are traditionally the responsibility of just one of the functions may benefit from a collaborative approach and the integration of diverse perspectives.

Sales and marketing leaders must stimulate open communication and personal relationships between individuals at different levels from the two groups. To prevent the groups from becoming complacent, they should encourage constructive conflict by making it clear that people are free to raise tough issues or to provide raw feedback to their leaders or team members. Constructive conflict is designed to get the best out of diverse perspectives and provide a richer understanding of what is happening and what would be the best decision and outcome.

Solutions at the Interface Level: Winning the Game

Having assembled the team, the next step is to get them to play a ­winning game. After all the careful preparation, planning, and ­training sessions, the employees need to play the game in a way that is ­beneficial to both the sales and marketing functions and the company. In the sales-­marketing interface context, a winning game is represented by the ­successful ­development of major marketing strategies and effective ­tactical implementation of marketing and sales processes on a day-to-day basis. Companies may take several actions that directly impact the interaction and communication between sales and marketing and facilitate a win. Examples are: (a) create single sales-marketing processes, (b) place people at the right positions, (c) encourage effective communication, and (d ) strengthen social bonds.

Create Single Sales-Marketing Processes

A company’s sales and marketing functions perform closely related activities that ideally complement and support each other, to create and deliver superior value to customers. Sales collects detailed information about the wishes and requirements of individual customers and communicates them to marketing. Marketing combines this detailed information about individual customers with market information from a host of other sources to identify and analyze market segments, assess market trends and explore market opportunities. The resulting insights are then used to help sales by providing them with customer profile descriptions, support materials, and promising sales leads. In the ideal situation, these separate processes interact and strengthen each other, which makes them run like clockwork. In practice, many factors throw a wrench in the gears, resulting in suboptimal progress of these processes or a very abrupt halt. In the previous chapter, we described several a root causes that may lead to a disconnect between sales and marketing processes.

A marketing manager at a capital equipment manufacturer in our sample describes such a disconnect between her company’s marketing and sales processes. Both marketing and sales generate sales leads, but she has no way of knowing which sales leads are more effective. Marketing tracks the number of leads they pass on to sales, considers it a success if they make their target number, and that is where it ends with them. Sales receives these sales leads, but it is not clear what they do with them. The marketing manager feels that it would be really helpful if she could track sales leads through the sales conversion process. That would help her to answer questions such as:

•Which sales leads (the ones from marketing or the ones from sales) are most useful?

•At which stage during the sales conversion process do sales leads slow down?

•At which stage during the sales conversion process do sales leads drop out?

•What are the characteristics of sales leads that move quickly through the process?

•What are the characteristics of sales leads that result in successful conversion?

To answer these questions, a company needs a single process perspective to map and monitor single marketing-sales processes. Instead of having two loosely-linked processes, marketing and sales need to develop a single shared pipeline that captures the transformation of sales leads into purchase orders (Figure 4.2).

Working together to move customers through the pipeline requires that marketing and sales agree on the key process stages and the accompanying definitions of key concepts. In this regard, many companies pay special attention to creating a common business language between sales and marketing personnel so that they do not fall prey to certain “problem words.”⁷ For example:

Figure 4.2 A single process perspective on the sales funnel

•Value: Companies define what is meant by “customer value” in concrete terms that facilitates its quantification in economic terms that is understood both by sales and marketing.

•Lead: Companies clearly characterize what they mean by a lead, using varied criteria such as who the potential buyers are, who the influencers are, where they are at in the buying cycle, and who we are competing against and so forth.

When companies implement such a single-process perspective on the shared sales pipeline and develop a common language, marketing and sales still have their own tasks and responsibilities. For instance, marketing may be responsible for prospecting and qualifying sales leads, while sales is responsible for closing the deal and getting the order. But the entire process is transparent to all involved, everybody understands the stages of the process and their contribution to them, and thanks to the common language, when they interact with each other, they clearly understand what their counterparts are saying. Having such a single, shared process and a common language also allow companies to track sales leads through the process, develop and evaluate appropriate metrics, identify bottlenecks, and develop effective remedies.

All single marketing-sales processes ultimately need to be geared toward creating superior value for customers and designed for maximum performance. Just like there are only a few sports teams that can afford to hire A-list players, most companies cannot make the investments required to hire superstar employees. As Frances Frei and Anne Morriss argue in their book Uncommon Service, the solution is to design single marketing-sales processes that allow average employees to produce excellent performance as an everyday routine. All components of a company’s employee management system—selection, training, job design, and performance management—need to be internally consistent and aligned to deliver outstanding results with average employees.⁸

Place People in the Right Positions

While a winning performance starts with assembling the right team and creating the right processes, the next step is to make sure that all players are in the right position. Individual players need to be able to make the most of their individual strengths, while supported by the rest of the team. At the level of the sales-marketing interface, companies may decide to create hybrid sales-marketing teams.

These hybrid sales-marketing teams may be given some kind of permanence, for instance by creating cross-functional teams that bring together sales and marketing personnel for the company’s key accounts. However, companies should not attempt to create hybrid sales-marketing employees. Sales and marketing perform complementary tasks and companies benefit from integrating their different perspectives.

Another alternative is to rotate people across functions. Job rotation involves moving employees temporarily from their typical day-to-day task to another job inside the company. The objective is to have employees stay in their current job, but gain first-hand experience in the other job. It will help sales and marketing employees to obtain new skills, enrich their job experience, and contribute to a greater understanding of the counterpart’s function and job. In addition, this expanded perspective will improve the employee’s empathy and facilitate future communications across the sales-marketing interface. It must be emphasized that job rotation between sales and marketing is meant to be temporary and short-term, although it may happen at regular interval such as every couple of years. “Many companies have experimented with job rotation between their marketing and sales groups; many find that in the end, they have damaged important human resource capabilities in their attempts to ­transform excellent salespeople into mediocre marketing managers, and vice versa.”⁹ The advantage of formal structures aimed at improving the collaboration between sales and marketing is that they legitimize and communicate ­management’s support for increased sales-marketing coordination.

An alternative approach, that is easy to implement and promises to deliver fast results at relatively low costs, is to create joint activities. During the late 1980s, Jack Welch initiated at General Electric, the Work-Out program; an initiative to enhance strategic thinking and cut down on bureaucratic decision making. Many of the initiatives that were implemented as part of the Work-Out program involved better coordination between the company’s sales and marketing functions. While this constituted a very comprehensive cultural change, companies may follow this example by creating joint activities at the tactical level. For instance, joint customer visits by a salesperson and a marketing colleague. Just like the cross-functional sales-marketing teams and job rotation, such joint activities serve to let employees experience both sides of the sales-marketing interface and develop awareness of the other function’s activities, objectives and problems. In addition, it improves interpersonal relationships, which enhances the sales-marketing interface.

Create Effective Communication

A critical ingredient of any successful sales-marketing interface is effective communication. Effective communication between sales and marketing starts by making sure that everybody possesses a basic grasp of the other’s language, which may be taught through cross-functional training and reinforced through job rotation and joint activities. As noted above, sales and marketing must agree on a common vocabulary before they can have a constructive dialog. For instance, they must agree on key concepts such as “customer,” “sales lead,” and “market opportunity.” If both groups are unable to agree on what a sales lead is, sales will keep complaining about marketing providing them with useless leads, while marketing will remain convinced that sales is not making the best of the leads provided to them. When sales and marketing have agreed on common definitions for key concepts, these can be incorporated in a Service Level Agreement.

A second action is to have sales and marketing personnel meet frequently, in both formal and informal settings. Many companies start the week with a 1-hour sales and marketing meeting to discuss progress on current projects, update account information, exchange ideas, and look for suggestions. This is about sharing information and informing people about progress. In addition to these weekly meetings, monthly or quarterly meetings may be used to discuss issues in depth and explore opportunities for improvement. Companies must keep in mind that for such information sharing forums to be useful, the people involved must feel that they are in a safe environment where their dissenting opinions and criticism will not be misconstrued and will not have any negative consequences.

Apart from these formal meetings, management should also encourage and facilitate informal get-togethers where sales and marketing personnel can discuss pressing problems that require immediate solutions. These informal meetings between sales and marketing may be facilitated by locating both groups close together with enough spaces to hold impromptu meetings. As we discussed earlier, some companies put sales and marketing together in one large open office, which ensures that feedback from sales about lost orders is immediately communicated to marketing. Marketing experiences firsthand what salespeople do and if the marketing activities that they work on help sales or not. And sales benefits by having direct access to marketing employees whom they can ask questions about new sales leads or the latest marketing programs. Other companies locate the offices of sales and marketing employees close together in the same building. Progressive companies take this a step further and create areas that are specifically designed for informal meetings.

Finally, senior leaders must ensure that the communication between sales and marketing is not limited to two or just a few individuals. In order to make the sales and marketing groups function as a team, management needs to encourage building of bridges at different levels between sales and marketing hierarchy. For example, communication should not be limited to just between the marketing manager and sales director. Everyone in marketing should have access to sales reps to get firsthand information about customers and feedback on which marketing initiatives work and which ones need to be modified. Interpersonal communication is not just for a few enthusiastic individuals, but must be embedded in the corporate culture and how the sales and marketing groups operate. Having multiple relationships at different levels between sales and marketing creates trust, facilitates the free exchange of information, and makes collaboration less dependent on specific individuals and part of the company’s organizational fabric. A research group at Massachusetts Institute of Technology’s Human Dynamics Laboratory studied teams in various workplace settings, such as innovation teams, post-op wards in hospitals and call center teams. They collected information on the communication behavior of team members: Tone of voice, body language, whom they talked to, how much they talked to others. Their key finding is that the pattern of communication is the most important predictor of success—much more important than what is actually communicated. A whopping 35 percent of the variation in a team’s performance can be explained by the number of face-to-face exchanges between team members.¹⁰

Strengthen Social Bonds

The MIT study described above also shows that social time is very critical to team performance. But while many companies are quick to use these findings to organize all kinds of social events, such as Friday afternoon barbecues, to improve communication and performance, this does not always work. One young software company thought they could promote better communication between employees by organizing “beer meets” and other social events. But these events had little or no effect. In sharp contrast, making the tables in the company’s lunchroom longer, so that strangers sat together, had a huge impact on team performance.¹¹

The importance of social bonds is also emphasized by Procter & Gamble CEO A.G. Lafley, who writes: “Our experience suggests that many of the failures of innovation are social failures. Promising ideas, with real potential business value, often get left behind during the development process. Some innovations are timed too early for their market; others are lost in execution. Often, the root cause is poor social interaction; the right people simply don’t engage in productive dialogue frequently enough.”¹²

Companies must be careful not to equate the stimulation of social connections in the workplace with the use of social networking. The recent explosive growth and acceptance of tools such as e-mail, smartphones, tablets, and social media platforms (for example LinkedIn, Google+, Twitter) may actually have a detrimental effect on team ­performance. It has been demonstrated again and again that face-to-face interaction is the most effective way to communicate with team members. But in the present age of digital technologies many people have become used to communicating predominantly through e-mails with team members who are just a couple of doors down the hall! Again, this emphasizes the need for careful design of corporate spaces.

Solutions at the Company Level: Staying Undefeated. . . Over a Long Term

When a high-performance sports team has been assembled, the players have gone through a grueling training program, and the coach has determined the right lineup and given his locker-room pep talk, the team is ready to win. But winning a game is just an isolated event; a top sports team aims to win not just a single game but the championship, and invests its resources in such a way that it can repeat the success season after season. Sustained success will only become a reality if at every single game nothing distracts the team from another winning performance. Similarly, sales and marketing will only display consistent collaborative behavior that results in sustained, long-term success if the company encourages and supports it by providing the right infrastructure that ensures perpetual success. The company needs to: (a) align objectives and activities, (b) monitor and reward collaboration, (c) align IT systems, (d ) provide top management support, and (e) create a learning organization.

Align Objectives and Activities

A company’s sales and marketing groups will only be able to function as a team if sales and marketing are on the same page. To achieve this, management needs to formulate corporate objectives that serve as a common rallying point, a compass that helps sales and marketing leaders to make trade-offs, develop effective strategies and objectives, and make sure that all employees are rowing in the same direction. For instance, management may formulate a corporate strategy and goals in terms of creating maximum value for customers or increasing long-term customer satisfaction. These corporate objectives are used to derive functional strategies, objectives and tactics, which are then translated into individual goals and activities. Especially when both sales and marketing leaders are involved in developing the functional strategies for both groups, it is more likely that sales and marketing activities will be aligned. Companies that lack a coherent corporate strategy lack the common ground that sets the stage for sales and marketing. This cascading process of alignment between corporate strategy, business plans, department goals, and individual goals only works when there are explicit procedures in place and the process is transparent to all involved. In practice, this is not always the case. For instance, in their study about corporate strategy, Kaplan and Norton write that “a mere 7 percent of employees today fully understand their company’s business strategies and what’s expected of them in order to help achieve company goals.”¹³ In many small B2B companies there is a strong sales orientation, with objectives and activities at all organizational levels strongly focused on short-term sales goals and not much alignment between sales and marketing.

Monitor and Reward Collaboration

Collaboration and communication between sales and marketing is not about creating warm, fuzzy feelings between individuals, but about ensuring joint sales-marketing contribution to the company’s bottom line. That is why sales and marketing need to track shared goals, activities and performance with metrics defined at the level of the cross-functional sales-marketing processes. Examples of such metrics include:

•Number of leads generated, which can be distinguished in sales leads generated by marketing and leads generated by sales. Or companies may use a more fine-grained distinction between various online sources of leads such as web site, corporate blogs, online premium content such as white papers and webinars, e-mail blasts, or social media platforms and offline sources of leads such as direct mail, trade shows, events, inbound phone calls, outbound sales calls, advertising, sposoring, and referrals. Each specified source of sales leads can be analyzed using the key metrics. For instance, by calculating the percentage of customers that visited the company’s website, viewed a webinar or downloaded an e-book before placing an order, you can identify the most effective content (and/or combination thereof) within your marketing mix.

•Expected lead revenues, which can be calculated based on the number of leads generated, lead close rates and average revenues per sale. This metric projects future revenues and helps to assess sales’ quota.

•Revenues, which measure actual achieved revenues. They should be monitored continuously to track marketing and sales performance in relation to performance goals.

•Average order size, which is a key metric to assess the company’s performance at the level of an individual customer.

•Lead status metrics, such as the number of open leads, leads in progress, qualified leads, and unqualified leads.

•Lead conversion metrics, which measure conversion in the marketing-sales funnel. Examples are the lead-to-marketing qualified lead percentage, the marketing qualified lead-to-sales qualified lead percentage and the lead-to-order percentage. A company may use close rates for individual actions to calculate average close rates for all marketing/sales activities. In addition, individual close rates may be used to identify the most effective actions.

The focus on collaboration between sales and marketing must also be reflected in the company’s compensation scheme. This means that an individual’s compensation must be (partly) based on team results. For instance, the salary of a sales or marketing employee can be calculated as a fixed component plus a variable component based on key metrics such as customer satisfaction, customer retention, or some of the other metrics we mentioned above.

Align IT Systems

In today’s day and age, collaboration between sales and marketing depends on the effective exchange of information between the two groups, which must be supported by the company’s IT systems. This can be a single, integrated IT system that is designed specifically to enhance internal collaboration. But, in practice, sales and marketing departments may already have their own information systems. These information systems are developed to support the requirements of the specific functions. For instance, sales will have developed an information system that is geared toward managing the portfolio of customer relationships, planning customer visits, and tracking individual orders, buying cycles and changing customer needs. Similarly, marketing will have developed its own information system designed to monitor market trends and assess customer satisfaction and retention. To facilitate collaboration between sales and marketing, the two IT systems need to be linked, which starts with agreeing on definitions of key common concepts.

Fully integrating both sales and marketing information systems is usually not necessary, but they must be linked so that management can monitor and assess cross-functional sales-marketing processes. Marketing needs to be able to use data analysis tools to gain customer and market insights from transaction data compiled by sales. These insights are used to craft marketing strategies and tactics, which are accessible by sales. Targeted sales leads are provided to sales and linked to customer profiles that reside in marketing’s information system. This provides sales reps with up-to-date information about the quality of sales leads and the latest marketing actions that can be leveraged during customer visits. Significant benefits will accrue when companies combine detailed transaction data about individual customers with qualitative customer profiles and general market information. Naturally, a host of companies (such as Salesforce, SAP, and Oracle) provide software solutions to implement integrated customer relationship management processes. With software moving to the cloud, companies no longer need to install, maintain and upgrade complex software suits, but can use web-based applications to manage their customer relationships.

To manage the growing amounts of available information, sales and marketing managers increasingly use digital dashboards, which display real-time information about key metrics in an easy-to-interpret visual ­interface. Digital dashboards provide sales and marketing managers with ­custom-made presentations of all real-time information that they need to track the company’s marketing-sales processes and make their daily decisions. To support collaboration between sales and marketing, the digital dashboards must include the short-term and long-term key metrics that are relevant for sales and marketing and be accessible to both teams. For instance, a digital dashboard could focus on sales pipeline analysis, providing summary metrics about the cost of customer acquisitions, conversion times, the number of qualified leads, and its impact on business performance.

Provide Top Management Support

To show that the company is serious about collaboration between sales and marketing, its top management needs to support this collaboration. There are many ways in which the company’s top management can help the sales and marketing teams to achieve more effective collaboration. Here are some of the actions that top management may undertake:¹⁴

•Promote sales-marketing collaboration by putting it on the agenda of the management team and making the search for improvement a key issue.

•Organize workshops for the combined sales and marketing leadership teams to emphasize the need for collaboration, identify critical bottlenecks and explore opportunities.

•Invite managers from other companies to share their stories and experiences about collaboration.

•Collect and disseminate case studies and research about sales-marketing collaboration.

•Celebrate early examples and successes of sales-marketing collaboration.

•Demonstrate personal commitment by participating in key joint sales-marketing meetings, even when it means traveling to other locations.

•Demonstrate collaborative behavior and function as collaborative role models by building and maintaining social relationships with key sales and marketing employees (building the informal network).

•Ensure that mentoring and coaching become embedded in their own behavior, thus making it part of the corporate culture.

Create a Learning Organization

Just like a good sports coach will videotape his games and carefully analyze his team’s performance to identify weaknesses and opportunities to create a better pass in football or a more efficient handoff in a relay race, companies must monitor and assess the collaboration between their sales and marketing groups on an ongoing basis. Having defined the key concepts, developed joint processes, and identified the right metrics is a good start; however, the company needs procedures, processes, and discipline to systematically analyze performance and identify opportunities for improvement. Only then will the company transform into a true learning organization.

All key metrics that have been identified as being relevant for single marketing-sales processes must be tracked continuously. Digital dashboards are a valuable tool to present this information in real-time to key decision makers. In addition, both top management and sales and marketing personnel must periodically analyze the collected information to learn from experience. Unfortunately, salespeople are typically more interested in tackling the next opportunity than in learning from the last one. But careful analysis of past events is critical to learning and improving your strategies and tactics.

It must be emphasized that learning from experience involves more than just identifying and learning from your mistakes. A common error is to only look at what went wrong so that the company can avoid repeating the mistake in the future. For instance, in analyzing their competitive bids many companies only look at their lost bids, which inevitably results in the conclusion that their price was too high and thus creates a downward pressure on prices quoted in future bids. But if the analysis had also included all bids that were won, the conclusion would be much more subtle and realistic. Similarly, project post-mortems are typically held only for projects that encountered a lot of risk or errors, or that were complete failures. But this usually results in negative meetings with managers playing the blame game, rather than objectively identifying weaknesses that should be addressed. In the context of the sales-marketing interface, such project post-mortems are likely to fan the flames of negative feelings that may simmer below the surface. A better strategy is to hold post-mortems for all finished projects, successes and failures. After all, in addition to avoiding your mistakes you also want to repeat what worked in future projects. An interesting variation on the post-mortems is the so called pre-mortems, which is carried out at the beginning of a project and, assuming that the project has failed spectacularly, focuses on identifying reasons for failure. The use of such prospective hindsight increases the ability to correctly identify reasons for future outcomes by 30 percent.¹⁵ The regular use of such pre-mortems, where potential causes are explored before any harm is done, also contributes to a mutual understanding between sales and marketing and improves interpersonal relationships.

The collective insights from careful analysis of key metrics and project post-mortems can be combined with information from other companies to benchmark your way of working against those of market leaders. Best practices are the result of a rigorous evaluation, have proven to be successful and can be replicated. They describe procedures and approaches that have proven to improve the collaboration between sales and marketing, create more value for customers and reduce costs. Best practices should be documented and shared within the company. In addition, management may collect illustrative examples, develop case histories and share success stories through the corporate website, in-company seminars, internal newsletters, and blogs.

A learning organization requires some kind of organizational memory, which allows the company to pass on experiences, insights, knowledge, and skills to others in the organization. Organizational memory allows an organization to store acquired insights and knowledge, so that it can be retrieved at a later date. For instance, it allows sales reps to capture their customer and market insights and make it accessible to new hires. IT solutions, such as intranets and collaborative software, may be used to disseminate knowledge internally. But the accumulated insights may also become embedded in the company’s organizational processes, procedures, and best practices. Especially in companies with a relatively large employee turnover, as happens in some sales organizations, organizational memory serves to capture the knowledge that resides in individuals. It is the task of management to determine which insights about sales-marketing collaboration are worth preserving and the best way to capture, store, and disseminate this knowledge.

To conclude, the range of solutions we presented in this chapter speak to the complexity involved in creating effective sales-marketing interfaces and ensuring that they stay frictionless and effective over a long term. We recommend that simultaneous actions be taken at three different ­levels to achieve result: Actions at the level of (a) sales and marketing’s rank and file, (b) sales and marketing leadership, and (c) the company’s top management.

However, before engaging in implementing each of the solution-oriented actions, it is imperative that organizational and functional leaders conduct a detailed assessment of where their sales-marketing interface stands so that they understand the exact nature and extent of issues they will need to address. In the next chapter, we present you with a set of tools to do just that.