The High Cost of SalesMarketing Misalignment

It’s almost 2015, and we have a lot of things now we never thought we’d have: computers we can wear on our wrists, movies and television shows delivered to devices in our pockets, and the ability to print three-dimensional objects from computer files.

So why is it still so that, in this era of human accomplishment, many businesses can’t manage to get sales and marketing together?

The Cost of Misalignment, By the Numbers

Sales and marketing misalignment still plagues many organizations, for reasons that are frustrating, ridiculous and totally understandable. Strong personalities abound in these professions, and the very structures of many businesses emphasize the differences between the two departments. In some cases, leadership above sales and marketing encourages conflict through contradictory goal-setting; in others, senior leadership willfully ignores conflict and lets sales and marketing “work it out,” which often results in a battle to the death (of a career, or sometimes, a company).

But we’re now in a data-driven era. The age of acting on hunches and gut feelings is gone. You may have a hunch, but you can now check it with data. And if you think that sales and marketing misalignment must be eradicated, the numbers back that hunch up.

A 2013 study by MathMarketing and Marketo revealed that organizations in which sales and marketing planned together had a 30 percent higher win rate for proposals and a 62 percent higher contribution to new revenue by marketing. Aberdeen echoed this in a 2010 study that revealed that organizations with good alignment between sales and marketing teams grew their annual revenue by 20 percent, while those with poor alignment saw revenues actually decline by 4 percent.

What do the revenue numbers look like for businesses suffering from misalignment? According to IDC, poor sales-marketing alignment at B2B companies costs $100 million a year at “the typical” $1 billion firm.

Businesses have burned their hands on the misalignment stove -- and yet many of them keep touching it. A yet-to-be-released study of sales and marketing pros conducted by CallidusCloud revealed that only 15.8 percent of them felt their sales and marketing efforts were fully aligned, while 28.8 percent said they were either misaligned or somewhat misaligned.

When asked how marketing felt about sales’ performance, and sales was asked about marketing’s performance, the natural animosities were brought to light. Only 8.7 percent of all respondents said they were very satisfied with their counterparts’ performance, while 24.5 percent said they were dissatisfied or somewhat dissatisfied.

Not surprisingly, performance mirrored alignment. Of the respondents, 22.7 percent said they met or exceeded sales goals regularly, while 25.6 percent said they met goals infrequently or usually missed them entirely.

Getting Sales and Marketing In Step

So, what does it take to get aligned? Step one is an attitude adjustment. The data shows that allowing sales and marketing to remain in conflict is a sure ticket to underperformance and increased internal dissatisfaction. The only way to break the cycle is for sales and marketing leaders to resolve to work together -- or for senior leadership to force them to do so. This should include alignment of goals around revenue. It makes no sense to goal marketing on sheer lead numbers -- lead numbers have nothing to do with revenue. Shift the emphasis to revenue and marketing is motivated to deliver qualified leads to meet a revenue goal.

The second thing that’s needed is a rationalization of the technology that sales and marketing use. There’s no way for sales and marketing to work in an aligned way if the technology they use is siloed -- that blinds each side to 50 percent of the process. The CallidusCloud study revealed that only 31.1 percent of respondents shared an integrated sales and marketing software suite. More than four in 10 (41.2 percent) had separate applications in sales and marketing, and, terrifyingly, 12 percent still worked from spreadsheets. How can sales and marketing work together if their data doesn’t work together?

While the technology can reinforce the problem, it’s ultimately one created by humans. But there are few problems that motivated humans can’t solve -- and solving the alignment problem will dramatically increase performance, reduce internal strife, lessen churn among employees, and generate greater commissions for sales people and greater job security for marketers. That should be motivation enough.

Creative Commons Creative Commons Attribution 2.0 Generic License Title image by  billy_boy_35