The Reality of Sales and Marketing

At most organizations, the alignment of Marketing and Sales is important to building and maintaining a sustainable and profitable future. However, many Marketing and Sales teams often have a complex, sometimes contentious, relationship despite countless metrics pointing to improved organizational performance. 

According to Hubspot's 2017 State of Inbound, 44% of respondents indicated their Marketing and Sales teams are generally aligned. Only 22% stated they have tightly aligned teams. IDC reported B2B companies' inability to align Sales and Marketing teams around the right processes and technologies costs 10% or more of revenue each year. And finally, MarketingSherpa stated 61% of B2B marketers send all leads to Sales, but only 27% of those leads are qualified. 

Most would agree that isn't good!

Thoughtful alignment of Sales and Marketing is critical to building a relationship around the customer, ensuring a seamless customer experience from TOFU to BOFU at all touchpoints. Organizations who have already transitioned are seeing the results.

• Organizations with tightly aligned Sales and Marketing functions enjoyed: 36% higher customer retention rates and 38% higher sales win rates. 
• For organizations that are aligned, there's a 67% higher profitability that marketing-generated leads will close. 
• 81% of marketers with a Sales agreement think their marketing strategy is effective. 

Effective alignment means many things: developing common definitions, common goals, milestones, metrics and employing smart technologies. But first and foremost, alignment is truly about: communication. Establishing a Service Level Agreement (SLA) between Sales and Marketing is largely the result of a conscious decision to communicate. Ensuring both teams follow the same processes and work toward common, agreed-upon goals. It's just smart marketing or "Smarketing" as coined by Hubspot.

Benefits of a SLA for Marketing and Sales

Aligning Sales and Marketing generated 208% more revenue from Marketing, according to a study by MarketingProfs.

Through a SLA, Marketing gains insights such as: the characteristics of a qualified lead who is Sales-ready and the number of qualified leads required to meet Sales' quota each month. When sales increase, it's more incentive for Marketing to gain budget for staff, improve marketing automation and related technologies. 

For Sales, improving the efficiency of the sales funnel was #2 priority according to the 2017 State of Inbound. Being armed with the right information is one of the most difficult steps of the sales process. When Marketing shares customer insights based on lead scoring criteria, Sales can more effectively tailor their approach to the lead. 

Failure to combine Sales and Marketing efforts is wasting revenue potential. Remember IDC's findings that Marketing and Sales misalignment translates to 10% or more revenue lost. By improving the relationship between these two, you will likely see improved lead conversions since Marketing will have a clearer understanding of what Sales is looking for, and Sales will have better insight into what Marketing is passing along.

Steps to Creating the SLA Link between Sales and Marketing

1. Define your buyer personas - As with everything else in your demand and lead generation, your SLA should clearly communicate the criteria for who you are trying to engage. Chances are your Sales and Marketing teams have different ideas of your "ideal" customer. Armed with detailed characteristics, the teams should sit together to build a singular, mutually acceptable set of customer profiles. 
2. Establish common definitions - At a minimum, you should clearly define what a "Sales-ready" lead is. This step is the most important to accomplishing a mutually respectful collaboration between the teams. Start by looking at your pipeline data. Ask yourselves: what criteria offers the best definition of a Sales-ready lead? You should also ask:
   • How do your Sales and Marketing teams define a Sales-ready lead?
   • What criteria discards a lead from being Sales-ready? 
   • What demographics or firmographics disqualify a lead from being Sales-ready?
   • How do your team's define the various stages of lead management? 
3. Set clear goals - The marketing team should be tasked with goals around how many leads to source, targets for each phase of the funnel and how many Sales Qualified Leads (SQLs) should be turned over to Sales. This step should be reviewed each quarter at a minimum. 
4. Define the handoff - This step is why clear definitions are important (Step 1). You must determine if and how a lead is handed to Sales. At this step, you should be asking each other:
   • Who receives a Sales-ready lead? Is it a singular person, an input to CRM that triggers a workflow or are leads distributed to individual people?
   • How will Sales report disqualified leads back to Marketing?
   • Who are your main points of contact from both teams for the lead process?
5. Establish a Marketing and Sales funnel - The steps described above are far more helpful when Marketing and Sales have an aligned sales funnel. In Superhero of you Sales Funnel, we described how working as a cohesive cross-functional team better equips your organization to convert contacts to customers. Working from a single funnel, each team will understand the responsibilities from TOFU to BOFU. 
6. Review and adjust - Your SLA should include key performance indicators (KPIs) used to track the progress and effectiveness of your aligned efforts. An emphasis should be placed on shared performance and metrics:
   • Lead response rate?
   • Number of SQLs handed from Marketing to Sales?
   • What are the conversion rates at each stage of your marketing and sales funnel?
   • Review any large wins or losses. What criteria converted them to purchase or not to purchase? Where did you do exceptionally? What areas need improvement?

Establishing a SLA is no easy feat, but it's a task well worth the effort. The act of creating, monitoring and modifying the SLA enables Sales and Marketing to look at the important contributors to success and ensure everyone is on the same accord.

Sales and Marketing alignment is so critical to provide a cohesive customer experience. We are living in the age of the customer. Marketing and Sales must unify their efforts to assure all activities are to, with, for and around the customer to increase retention rates, improve relationships and remain profitable.