Sunday, January 5, 2020

Why Superficial Sales-Marketing Alignment Isn't Enough

Astute B2B marketing and sales professionals have long recognized the importance of having a productive relationship between marketing and sales, and many B2B companies have been working to build such relationships for more than a decade. So it's understandable that sales-marketing alignment has been a hot topic in B2B marketing and sales circles for the past several years.

Overall, there's no doubt that most companies have made at least some progress toward creating a more productive relationship between marketing and sales. It's also clear, however, that most companies still have work to do to turn their marketing and sales organizations into a cohesive, high-performing team.

A research report published late last year by LeadMD and Drift provides several important - and somewhat surprising - insights about the state of sales-marketing alignment, and about what business leaders need to do to reap the maximum benefits from a productive marketing and sales relationship.

The LeadMD Sales and Marketing Alignment Survey Benchmarking & Insights Report was based on a survey of 350 sales and marketing executives. Forty-four percent of the respondents were sales executives, 26% were marketing executives, and 30% were executives with responsibility for both functions. The respondents were drawn from several industries, and all were with companies having at least $25 million in annual revenue.

One primary objective of this study was to develop an evidence-based and actionable description of "meaningful" sales and marketing alignment. The researchers decided that alignment should be called meaningful if it is correlated with two business outcomes:

  1. Growth in revenue, wins, and lead quality over a 3-year period
  2. Pipeline health (growth and sustainability in predictable revenue)
The study report categorized survey participants as leaders or laggards in meaningful sales-marketing alignment based on how respondents answered survey questions related to these two business outcomes. The survey then identified what specific alignment actions distinguished the leaders from the laggards.

Perception Versus Reality
One remarkable finding from this survey is that perceptions about the quality of sales-marketing alignment are not strongly correlated with above-average business outcomes. Over 90% of the survey respondents said their sales and marketing functions are well aligned or very well aligned. However, 60% of those respondents also reported poor performance on the revenue growth and pipeline health outcomes.
The authors of the report attributed the positive feelings about alignment to two factors:
  1. The use of key performance indicators that are shared by sales and marketing. Ironically, the survey found that the mere existence of shared KPIs is enough - a lack of achievement around such KPIs did not negatively influence perceptions about alignment quality.
  2. Overall, the surveyed executives had positive feelings about both functions. In other words, sales and marketing leaders generally respect each other.
Keys to Meaningful Alignment
The LeadMD/Drift research identified two key attributes of companies that lead in meaningful sales-marketing alignment. First, leaders put greater emphasis than laggards on customer-focused KPIs, and they were more likely to have members of their marketing team interact directly with customers. The following table shows the differences between leaders and laggards on these issues:

The second distinguishing attribute of leaders is that they are more likely than laggards to take specific actions to foster ongoing collaboration between their marketing and sales teams, as the following table illustrates:

The Takeaway
The LeadMD/Drift study is a particularly valuable piece of research because it confirms that superficial sales-marketing alignment isn't sufficient to drive improved business performance. In my next post, I'll expand on the concepts found in this study and describe what marketing and sales leaders need to do to nurture sales-marketing alignment that is truly meaningful.

Top image courtesy of Ted Sakshaug via Flickr CC.

Related Articles

No comments:

Post a Comment