Part II ( Continued)
Purpose Driven Compensation Plan: Part of the reason why marketing and sales act as rivals rather than partners lies in their planned compensation structure. The sales organization should design compensation plan incentives that align marketing and sales toward the achievement of specific goals that enhance company productivity. The company goal achievement is the ultimate goal. Therefore, these incentives must be a laser focus on the products that the company wants to sell.
Salespeople are driven by their sales quota to achieve bonuses and keep their job. Salespeople are masters at working the sales compensation plan.
Salespeople become incredibly analytical when it comes to maximizing their ability to make money by taking advantage of any loopholes in the compensation plan.
Compensation plans that are non-performance driven are horrible because they diminish competitiveness, lower production, and spur complacency.
Comp plans that promote individual over-performance are excellent for morale as they compensate the individual according to productivity, rather than being part of a team that performs well.
A good comp plan should allow top performers to make ridiculous money, to ignite other sales reps to increase their performance intensity to over-achieve. All comp plans should be as simple as possible, incompetent organizations purposefully overcomplicate something that should be simple. If you work hard and are super committed to over-produce, the company will pay you extraordinary well. Sales reps who barely get by should not be allowed to stay around these hungry, committed super producers. Underperformance tolerance should be banned.
On the flip side, the company must find a way that allows marketing folks and sales folks to get compensated for working together as a united force to meet or exceed company objectives.
You would probably agree that paying more for newly acquired customers is worth more than paying for maintaining an existing customer. Now, don’t get me wrong here! Keeping and growing your existing customer base is vital.
However, sales effectiveness is the ability of the organization to capture new dollars. Paying higher commissions for new sales should be encouraged. Sales hunters (business development sales rep) should be compensated differently than sales farmers (account managers). Part of the reason that sales organizations struggle to acquire new business is that the comp plan doesn’t motivate sales hunters to push hard to acquire new business.
Salespeople are often compelled to lower the selling price on their products to meet arbitrary and often unrealistic assigned quotas, while the marketing group would lament that the sales group is not selling effectively and shying away from selling higher-margin products bundles.
Salespeople are paid a commission immediately upon selling, installing, and activating a business solution. Marketing folks enjoy a higher salary and discretionary bonus when the group meets company goals. The marketing budget is allocated to specific company programs, not necessarily to people, and to complicate the matter more, some of these program impacts take an enormous amount of time to generate value, and even then, it’s hard to measure its effectiveness.
It is easier to measure the success of sales by the number of closes. However, it may take a marketing campaign for more than six months to start seeing any measurable results, and it’s even harder to begin quantifying a marketing campaign impact.
Marketing is all about influence. However, it’s tough to measure the latter, e. g., a sales rep closing a lead provided by an existing client. While word-of-mouth is the best referral type, the signing customer may have done some research on the products, read company reviews, online marketing material, and blog posts to make the right choice. In this case, sales will get credit but not marketing. Marketing and sales are vital forces that complement one another and should work closely together for the greater good because they cannot survive without one another.
Scalable good marketing strategy and execution can provide the necessary support to help sales attain their objectives. Marketing creates customer awareness, initiates desire, customizes native content, and sends essential communication that moves customers to action.
Several studies have demonstrated that marketing and sales interactions within many significant corporations are minimal at best and often awkward. Sales marketers’ responsibility is to craft messages that the buyer can identify with and say, yep, that’s me.
Most corporations have separate goals for marketing and sales, rather than one common collective goal. Instead of having team performance goals, these companies should have division performance goals; all units of production should work to accomplish one goal—company revenue objectives. After all, the company is one unit of output; all its departments rise and fall together.
Factor Contributing to the Discord Between Marketing and Sales.
- Poor communication. The irony is that sales and marketing’s significant strength is communication skills. These groups often fail miserably to conduct a productive dialogue and establish an inter-departmental communication model that promotes understanding and trust.
- Budget. Allocated financial resources are always limited in nature and scope. The marketing group needs money to finance its programs. Sales need money to hire and train new and existing salespeople, and it also requires a budget to incentivize and reward salespeople for exceptional performances. Marketing and sales executive’s big egos and entitlement create friction, resentment, and group dissatisfaction.
- Professional views conflict. Most salespeople feel that the marketing group is too broadly focused and often ignores local customer wants and desires. Conversely, marketing people perceive salespeople as having myopic views as they focus on individual customer wants rather than the broader market.
- Professional differences. Marketers tend to be analytical, factual, systematic, and strategic in their approach to achieving specific goals. Conversely, salespeople are primarily focused on building long-term relationships, engaging new and existing customers while closing deals. The marketing group and sales group priorities and approaches, while similar in some areas, are broadly distinct, leaving room for misinterpretation, misunderstanding, and occasional cultural clashes.
- Pipeline misalignment. The marketing group’s job is to build a growing, large pipeline of qualified leads. Salespeople’s job is to close as many opportunities as fast as possible to meet their quota and achieve their bonuses. Salespeople often complain about the poor quality of leads or shortage of lead flow. Marketing groups often blame salespeople for poor follow-up, slow reaction to reach on leads and dismissal of qualified leads within less than two attempts.
- Strategic misalignment. According to a Marketo study, “, at least 1 trillion dollars is lost annually due to misaligned sales and marketing strategies.” Mismanagement of leads often slows the process down, creates time waste, redundancies, process inefficiencies, and loss of opportunity.
Cross-Functional Team Alignment Leads to Growth
Most functional units within companies (finance, marketing, sales, legal) work toward the accomplishment of their own goals. This strategy often focuses on team and division wins rather than complete organizational success. Internal divisional competition is well and good if every division works in harmony with other business units to advance the company towards the attainment of its collective goals.
For example, you cannot have a car run well when its engine cylinders run in different sequences. The power of the engine depends on the synchronicity of its composite parts.
The same principle applies to corporations. All functional teams should work as one force that moves forward to achieve corporate growth by meeting their business objectives while aiding other cross-functional teams in attaining theirs as well.
Amazon CEO Jeff Bezos and CTO Werner Vogels have implemented a method called “The Institutional Yes.” This idea generation system allows an employee to present to her manager any good idea deemed worthy of evaluation. The manager’s default answer should be a YES, and If the manager decided to say no, then she’s required to write a two-page thesis explaining why it’s a bad idea. By doing so, Amazon has created an environment where more ideas are being tested and implemented throughout the whole organization.
Genuine company success requires the strength of all its essential divisions; a lack of harmony or weakness of some of its parts can lead to a failure of the whole system.
Just like a deadlift champion would exercise several muscle groups at the same time, e. g., back, glutes, and legs. A champion knows that everything matters: proper form, movement, hip-width ratio. Any flaw can result in failure and potential injury.
Company internal departments are interdependent but rarely act as such despite their full awareness. For example, a sale deal that requires a price exception, and a contract modification to happen, will need marketing permission, finance approval, and legal assistance. Without the collaboration of these departments, the sale will never become a reality.
Marketing and Sales Conflict Stages
Given the economic and cultural conflicts described above, it’s reasonable to expect dissatisfaction and mistrust among these groups. Now it’s easy to believe that the nature of the issue is way too broad and complex for a quick resolution. In reality, these conflicts are human-made and can be resolved with dialogue and alignment of purpose. When the relationship between marketing and sales matures, and align behind the everyday goal, growth happens quickly.
- Entrepreneurial Stage. The company is at its infancy, and there is no defined strategy on how these two groups should work together, each group works according to its agenda. Most communications revolve around reactive issue resolutions rather than proactive cooperation. Collective goals are not defined, and mistrust abounds among these two groups.
- Get-along Stage. Sales and marketing understand they should work together civilly to create opportunities and minimize conflict. The marketing team and the sales team focus on what they do best and start working together to promote the company with partners, during special events, and trade shows. Trust and relationship start building gradually.
- Partnership Stage. Sales and marketing are focused on their distinct business but have a complete understanding that both parties depend on one another to grow and achieve goals. Both groups agree to use similar work terminology to facilitate communication and speed up progress and results. Marketers start being involved in large accounts, leveraging field reps’ customer relationships to conduct surveys and collect feedback and get more involved in the general education of the sales force on how to leverage marketing to acquire more substantial and complex accounts.
- Fusion Stage. This is the ultimate stage, where the boundaries between sales and marketing become almost invisible. Both groups actively share ideas, insight, opportunities, and systems that gauge customers’ spend trends, loyalty, and reward programs. This stage reflects the ideal state where marketing and sales act as one force, that works together to improve the company brand by providing the ultimate customer experience every time.
Risk Mitigation. Imagine you board a flight, and as soon as you settled in your seat, you overheard two flight attendants’ conversation behind you. “You should know that the pilot had attempted suicide several times in the past, and his co-pilot has just spent a week in the hospital for experiencing a major series of depression.” How safe would you feel getting to your destination? What kind of stress and fear would you experience, knowing that these two critical individuals have suicidal tendencies or mental/emotional issues? It would be natural to worry about your safety in these conditions; knowing that your life is in the hands of two mentally unstable individuals is a scary fact. Yet, if you never heard the conversation, you will be just fine.
Sales and marketing self-sabotaging and undermining each other’s value and credibility is counterproductive and harmful.
One will never insult a customer by implying that he is unrealistic, dishonest, or lazy. Yet, sales and marketing often berate one another, demean the effort and contribution of one another, just like two siblings who cannot live without one another but cannot stand the closeness to one another.
These self-sabotages can get resolved with a conscious effort from both groups to refrain from judgment through a heightened state of awareness and education. Problems and misunderstandings can only be solved once recognized and addressed with the best interest of the company in mind, not self-interest.
How to solve this dilemma?
- Uncover the root of the problem that leads to marketing and sales misalignment and friction.
- Quantify and educate both parties on the economic and moral impact of the problem.
- Design and implement a path of communication and collaboration that is tied to a reward system or an incentive to change to achieve a fusion stage.
Synergy is at its optimum when clarity, understanding, and commitment are aligned to achieve mutual objectives. The integrating of marketing and sales can be a winning formula, they are equally important, and they must work in tandem for better company future.
Marketing and sales should work as a force of one; their combined strength multiply when they operate synergistically in total harmony. Departmental politic and personal rivalry should be identified, discussed, and eliminated to create the necessary synergy to meet the company goals and purpose.
In addition, sales executives should generate a compensation plan that recognizes and reward efforts and exceptional performances that contribute to the ultimate goal— the realization of the company vision and mission.
Aligning cross-functional teams to work as a force of one to deliver on the company goal will lead to revenue growth, increase market shares, employee satisfaction, and customer loyalty. Meeting these goals means the difference between growing your business or being out-of-business.
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