A Sales Executive’s Perspective on Alignment: Outdated Stereotypes, Pipeline and Revenue Goals for Marketing
- Despite compelling evidence that tight sales and marketing alignment drives superior business results, executives struggle to drive alignment between their functions
- Sales executives can drive alignment by updating outdated stereotypes about the other functions
- Establishing pipeline and revenue contribution targets for marketing is critical; without agreement on goals, all alignment efforts are doomed to failure
Sales and marketing executives’ stereotypes about each other are tired and outdated. Unfortunately, they persist in B2B organizations and often inhibit sales and marketing alignment. For example, sales executives should acknowledge that marketing is not “arts and crafts” but an important partner in pipeline and revenue generation, and marketing executives should acknowledge that sales is not about hoodwinking prospects to buy offerings they don’t need, but about helping customers solve problems.
The case for sales and marketing executives to revise their negative stereotypes and strive to align their functions is compelling:
- Our research has found that highly aligned companies grow 19% faster and are 15% more profitable.
- Today’s digitally empowered B2B buyer interacts with marketing and sales throughout the purchase journey, which means that sales and marketing must be tightly coordinated to provide a consistently helpful, personalized purchase experience.
- Forrester’s research into what boards of directors want from their go-to-market executives found that board members want to see clear evidence of connection and alignment between revenue generating functions during board presentations.
In addition to updating their own negative stereotypes, sales and marketing executives need to agree on a set of shared goals so that they’re focused on driving the same outcome and have equal levels of accountability.
Different Goals for Sales and Marketing Causes Misalignment Problems
Too often sales and marketing executives have different measure for success of their functions. Sales is almost always ultimately measured on impact metrics such as revenue, bookings, number of new clients, and churn, which is why sales is so short-term focused. The goal is to get to the number every month or quarter. Sales is highly accountable: It’s either making the number or not.
In many cases, marketing is focused on a different set of metrics such as the number of inquiries, leads or marketing qualified leads (or number of blog post views), all of which are leading indicators. Focus on these types of goals can lead marketing to drive up the volume of leads — with little regard to lead quality — instead of focusing on generating opportunities and pipeline, which is what sales cares about. Worse, generating a high volume of poor-quality leads is actually detrimental to the sales team, because it has to invest valuable time sifting through a mountain of leads to find the ones that are legitimate.
This fundamental difference in how the two functions are measured causes misalignment, because the marketing team can succeed by hitting its metrics even while the sales team misses its goals and vice versa. The key is to set joint goals as the measure for success and to ensure equal levels of accountability.
Setting Pipeline and Revenue Contribution Targets Is Key to Alignment
Sales doesn’t just want more leads — it ultimately wants more opportunities in the pipeline. Therefore, focusing demand sources such as marketing on producing high-quality opportunities that actually close should be the joint focus for sales and marketing organizations.
To do so, sales and marketing executives should establish pipeline and revenue contribution targets for marketing and the other three demand sources (sales, tele and channels) and track progress against goals on an ongoing basis. By measuring pipeline and revenue contribution, marketing and the other demand sources can focus on generating the kind of high-quality opportunities sales needs in order to win. And when it’s time to report on the joint metrics, both functions win and lose together. Now that’s alignment.
Marketing’s Contribution to Pipeline and Revenue Depends on Customer Segment
Establishing the right pipeline and revenue contribution goal for marketing depends on the customer segment. Forrester benchmark data shows that the pipeline and revenue contribution expectation from marketing should be higher for the small business segment, which marketing can pursue more efficiently than sales, and lower for the enterprise segment, which typically requires more sales outbound prospecting to unearth opportunities.
Updating outdated stereotypes about the respective functions and agreeing on joint goals centered on pipeline and revenue contribution are two critical factors to improving sales and marketing alignment.
To learn more, listen to my podcast “Rebooting the Sales-Marketing Relationship.”