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Appalachia
had the Hatfields and McCoys. Texas had the Regulators
and the Moderators. Tennis had Connors and McEnroe.
And business, too, has its own infamous bitter battle.
"In too many companies, Sales and Marketing feud
like Capulets and Monatgues," so begins a recent
Harvard Business Review article by Phil Kotler,
Neil Rackham, and Suj Krishnaswamy.
The
impact of the raging conflict between sales and marketing
on business performance is well-documented. Harvard
Business School's Professor Benson Shapiro, a leading
authority on sales management, contends the biggest
problem in business today is that, "sales and marketing
are in separate fiefdoms. They don't even talk to one
another." A recent CSOInsights study compared two
groups of firms, those who excelled at lead generation
optimization (LGO) and those who were average or poor.
The study found that LGO leaders—companies characterized
by the close integration of sales and marketing teams—had
higher win rates, a higher percentage of the sales force
hitting quotas, and quicker learning cycles for new
members of the sales team. Unfortunately, only about
9 percent of firms fall into this LGO group. Kotler,
Rackham, and Krishnaswamy list higher market entry costs,
longer sales cycles, and higher cost of sales as consequences
of the strained relationship.
We've
found the friction between the two departments harms
an organization in two ways: it wastes resources and
hobbles profitability. Resources are wasted when the
marketing department produces research, collateral materials,
and sales training that the salespeople cannot (or will
not) use. Profit suffers when the sales people are not
talking to those prospective customers who are likely
to be the most receptive to the organization's products
or services and who are likely to be the most profitable—information
that comes (or at least should come) from the marketing
department. Ultimately the effectiveness of the sales
force and marketing programs are seriously compromised.
The
root causes of the discord have also been thoroughly
investigated right on down to the subconscious level.
As a MarketingProfs.com article said of sales and marketing,
"there seems to be an unbridgeable gulf between
these teams—they have separate goals, separate
cultures, and different fears and motivations."
Reported Businessweek in a three-part series
on the topic: "Marketers routinely dismiss sales
people as greedy and egotistical. And sales people,
well, they're a little bit more blunt. They think marketers
are fluffy and dumb." At its heart, the sales department/marketing
department conflict seems to be one of culture and of
misunderstanding. Sales people (to make sweeping generalizations)
tend to be independent, entrepreneurial, self-confident.
Marketing people (to make more sweeping generalizations)
tend to have more formal education and therefore tend
to think they are more knowledgeable about the big picture.
It's not too much of a stretch to see why sales folks
see marketers as "ivory towered" employees,
to quote Businessweek again, or see why marketing
folks see sales as insubordinate mavericks.
The
sales vs. marketing conflict is not exactly a dirty
little secret business keeps well hidden behind closed
doors—the laundry's out and been aired for awhile
now. So why in heaven's name do companies let the war
rage on and on when it's seriously impacting profitability?
As Businessweek speculated, "Some problems
are so universal and so persistent that entire industries
learn to accept them as the natural order of things,
when, in fact, solutions are readily available. The
breakdown between sales and marketing is one such problem."
According to a survey from the magazine, CEOs don't
put much stock in mandating collaboration between the
two opposing camps, so who's going to broker the peace?
Here's our plug for marketers to take the first step
towards détente.
It's
not exactly a secret that there are really only a handful
of companies in the world that truly recognize and understand
the role and value of marketing to the business. For
the majority, marketing is something that's tolerated
and not necessarily appreciated. We're saying this as
marketers ourselves and have experienced corporate ambivalence
towards our profession first hand. And it's given us
a complex, too.
Copernicus
and Brandweek recently completed a survey of
256 senior marketing executives who were queried about
the role of marketing and sales in their organizations.
We were surprised to discover how much importance our
respondents—again, senior marketers, not sales
people—placed on the sales function. Forty-nine
percent said they worked for a sales-oriented company
in contrast to 31 percent who worked for a marketing-oriented
company. Some 51 percent said that CEOs come from the
ranks of sales departments, whereas only 22 percent
said they come from marketing. Our conclusion: marketers
need a shrink—they have poor self-image, low self-esteem,
and see themselves as second-class managers.
But
instead of bemoaning (and grudgingly accepting) their
lowly lot, we say, "be a factor!" If sales
is indeed king, then become his most loyal (i.e., helpful)
subject. The strong survive, but the meek shall inherit
the earth. If Red Herring's CMO survey which
found that marketing and sales alignment is one of marketing's
top five strategic issues for 2007—42 percent of
the respondents gave it a nine or ten as a crucial issue
to address—take these four important steps to make
friends with the VP of sales and the sales force:
1.
Change your mindset. Marketing should view sales
as an internal client and recognize that the salespeople
are the ones on the street or on the phone or on the
Internet. Sales does have a point that they are in the
trenches, out in the marketplace, talking to customers
and prospects day in and day out. They are the ones
touching customers with conversations and letters and
presentations and the like, and they are clearly a key
source of information that could make the marketing
function stronger.
2.
Identify targets for salespeople. Now you may
be thinking, "wait, we already do this." We've
certainly heard this from clients. We've heard some
say, for example, sales people are specialists in discount
stores, some are specialists in chain drugstores, and
some are specialists in independent stores. But this
is the equivalent of saying you have segmented the market
in terms of SIC codes or demographics—large, medium,
small, for example. In other words, you have segmented
the market in terms of variables that help you manage
your business but don't necessarily help you improve
your business.
When
we say "identify targets" we mean segmenting
the market into groups that are distinctly different
in terms of their potential profitability for a firm,
as well as other characteristics the sales force tells
you will help them quickly and easily identify to which
group a customer or prospect belongs. Ideally, marketing
should be able to tell sales, you should go after buyers
in segments A and B because they represent the greatest
share of potential profitability. You can ignore segment
E and place less emphasis on segments C and D.
3.
Find key targets for the sales force using available
databases. Take it one step further and show sales
where the folks in segments A and B live and work, along
with what they watch, listen to, and read. Pharmaceutical
companies, for example, can employ segmentation to identify
the most profitable targets for sales calls. First the
segmentation is done and the most profitable, responsive
doctors are identified. Then a statistical model is
built to predict who in a large universe of all physicians
in that specialty are likely to fall into this segment.
Finally, the names, addresses, and potential profitability
of all these physicians are printed out and distributed
to the sales force by geography.
An
insurance company identified its most profitable targets
and then profiled them demographically. A statistical
algorithm was developed to tie these insights to block
level census data. Consequently, a list was generated
for each agency and all their markets throughout the
U.S. of likely prospects for their insurance services.
The agents loved it.
4.
Provide sales with a different script for different
targets—a customized selling message designed to
build loyalty among current customers and move prospects
towards your brand. To generalize once more, virtually
all sales representatives believe they could sell more
if the company just cut its price or at least let the
sales rep negotiate (a nicer word than bargain). Yes,
a price segment does exist in every category. These
are customers who do not—within reason—care
about delivery times, after-sale service, or company
reputation; they just want the best price. But this
isn't EVERYBODY. Depending on the industry, price-sensitive
customers may represent as much as 40 percent or as
little as 20 percent of the total market. This means
that 60 to 80 percent are not fixated on price and willing
to pay more—not less—for a product or service
that solves a major problem or addresses an unmet need.
Enter marketing. With each of the segments, identify
needs, problems, pains, and new product/service interests
among segments and give sales different scripts to help
market the brand, product, or service, and make the
most profitable sale.
Remember
that sales is driven by "making quota" and
usually they make their money on commission. So very
often this means in practice a sale is a sale. The business
case marketing needs to make to get the sales force
to use the outputs from the steps above is that they
won't waste time overselling a Cadillac to customer
A when customer A, as marketing has determined, is looking
for a Kia. They won't spend time trying to sell a station
wagon to customer B when customer B wants a sports car.
Make the sales folks understand that you're not trying
to tell them to sell less to fewer customers, but to
sell smarter to more. Making sales more effective and
efficient by giving them the information and tools to
do it puts more money in their pockets, makes them happy,
and will go along way to making them think, "Now
why did I think these marketing guys were fluffy and
dumb?"
The
sales and the marketing departments' ultimate goals
align closely—both, after all, want to find and
retain customers—it's only the means to the end
that differ. Taking the first step to ending the bitter—and
dare we say, needless—feud between the sales and
marketing will go along way to improving business performance.
And let's be plain, the more evidence marketing has
that it helps moves the organization forward, the more
respect, credibility, and status—all the things
sales seems to have that we don't—the department
earns.
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