Revenue Marketing Creating Sales and Marketing Alignment

Revenue Marketing: Creating Sales and Marketing Alignment

6 minute read
Kay Kienast avatar

The art of contacting and connecting with customers and prospects has become infinitely more sophisticated and effective through the buyer’s journey. We can thank advances in marketing automation, big data, predictive and behavioral analytics for this new level of sophistication.

Now both marketing and sales departments are responsible for driving revenue, margins and retaining customers. And the departments must coordinate, as they communicate with the same customers and prospects.Easy to say, but not easily done.

When marketing provides leads to sales, these leads often won't be part of the sales coverage model. A sales coverage model identifies how your company organizes its sales force to address customers and prospects in your target markets. Optimizo reports that 79 percent of leads generated by marketing do not get a follow-up from sales. This happens for a variety of reasons, such as these leads weren't assigned to a sales representative.

CEOs are essentially funding waste in an unproductive sales funnel management process. And even if your company can achieve marketing and sales alignment, there is the matter of marketing and sales giving prospects and customers different messages. This is confusing and slows the buying process.

A Three Tiered Approach

Where do you get the magic required to entice your sales and marketing departments to not only communicate, but collaborate? Cory Treffiletti, vice president of strategy for Oracle Marketing Cloud, believes the magic lies in a three tiered solution:

  • Data
  • Analytics
  • Activation

Let’s start with the data and analytics layers. Most of you know about your customer’s sales transactions, but much more is needed to gain traction. Understanding each interaction your customers or prospects have with your company is crucial to engaging them at the right time, right place, and with the right content -- which combines to create that magical moment of buying behavior.

Your current database and CRM system house customer data and their buying behavior. You know who the buyer is, who are their influencers and how to engage them.What you are missing is the integration of digital data and external data -- Dun & Bradstreet details, M&A information, funding details, reorganizations and personnel changes, external social media journeys, and other data.

Many companies have a sales coverage model that is developed solely by sales. It's not unusual for sales operations to use a separate database from the marketing database to develop the coverage model. But this is wrong. Marketing and sales need to collectively define targets and stop operating in separate silos.

Sales and Marketing Coverage Model

When sales and marketing work together , the same customers and prospects get targeted and costly mistakes are avoided.

Segmenting your customer database is the first step.One method is to use a RAD model -- Retain, Acquire, Develop.The RAD model identifies groups of customers by share of wallet and potential annual revenue (see image).


The two groups should determine the most likely categories for potential annual revenue by account. This means breaking the revenue of all of your accounts into categories using predictive models to determine their potential annual revenue.

Predictive analytics can help derive each customer’s share of wallet.Share of wallet is the amount of the customer's total spending that is captured from your company’s offered products and services. Have your data scientist identify where the natural breaks are in the data, so you can place each customer and prospect in the right segment. In the example above, the decision was made to put all customers with 50 percent or more share of wallet in the Retain category; Develop became less than 50 percent; and Acquire was 0 percent.

Learning Opportunities

Now the tricky part: Some of the Develop customers may never reach the Retain category or look like your best customers. But at some point, they bought something from you. Does that mean they should remain in Develop? Should they be in your coverage model at all? If you are only targeting prospects that are $200 million revenue companies with 2,000 employees, you will not meet your revenue goals because these potential customers may not be your best customers. Why spend the money to have sales cover these prospects and marketing target them when they will never grow to look like your best customers in Retain?

This is where predictive and behavioral analytics comes in. Predictive analytics works by taking all the data about your target accounts, from both internal and external sources, and determines who should be in your coverage model.Predictive and behavioral analytics can assist in optimizing conversions at all stages of the revenue funnel. Customers and prospects should not receive the same messages. Predictive analytics can identify customers and prospects that should receive nurturing versus cross-sell, up-sell or loyalty messages.

More sales and marketing agreements are needed to create your coverage model. One example agreement is which of the nine segments in the chart should be included in your coverage model? Should all nine segments be included or only six?The results of your agreements determine where to focus your activity.

Roles and Responsibilities

The next step deals with roles and responsibilities for each segment of the coverage model (see image).


Sirius Decisions recommends marketing take the lead in Acquire, with the Develop sector split 50 percent for both sales and marketing, and sales takes the lead in Retain. Once this is agreed to, a quota for both sales and for marketing can be worked out. Quota means the amount of money that must be delivered over a specific period of time to the company. Sales is used to having a quota, but the same is not true for marketing.Quota for marketing has the same definition as for sales, hence the term “revenue marketing.”

So the new magic needed not only involves marketing automation, big data and analytics, but close collaboration between marketing and sales.

Fifty percent of B2B sales staff consistently miss sales quotas. But hope remains.Organizations that effectively integrate sales and marketing outperform those that do not by as much as 24 percent in average revenue growth and by 21 percent in profit growth.No wonder Forrester reported that 67 percent of CEOs now consider marketing and sales alignment a top priority. Take steps now to create the magic in your company.

About the author

Kay Kienast

Kay Kienast is a marketing executive specializing in global marketing, systematic lead generation, channel development, and branding focused on a range of vertical industries. Kay has held international team leadership roles in technology start-ups to multi-billion dollar market leading companies like Xerox, Adobe, Cisco, Bell Atlantic, CDW, and Dell, where she has held senior marketing and operations positions.