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June 4, 2005
Sales and Marketing - A Sibling Rivalry or Business Partnership?
by Sridhar Ramanathan
Sometimes sibling rivalry is a good thing. It can actually push kids to carve out their identities more distinctly and to perform better. The same is true in the business world. CEOs often encourage some healthy tension to push the organization to higher levels of performance. Between Sales and Marketing, for instance, you want Sales to push Marketing to define winning products while Marketing should be pushing Sales to keep prices up despite pleas for deep discounts. The same tension exists between Engineering and Support. Support would love more design for supportability built in, and Engineering would love not to worry about documentation and supportability needs.
But sometimes sibling rivalry goes too far. Often I hear CEOs of technology companies talk about the virtual fist fights between Sales and Marketing when it comes to handoffs. Having one VP of Sales & Marketing, unfortunately, does not always remedy the issue. In fact, some of the conflicts between the silos directly lead to longer cycle times between first customer contact and final contract. This clearly hurts revenue growth. So the problem statement then is: how do I ensure the best, fastest handoffs between Sales and Marketing? What’s the right goal congruence between the two functions?

I recommend three areas in particular of goal congruence to drive the right sense of urgency and mutual accountability in the context of overall revenue growth.
Agree on the definition of a “lead”
One of Marketing’s most important contributions to Sales is, of course, generating leads. The source of the conflict is that there is poor or no definition of a “lead” for proper handoff. It’s too common to hear Sales complain that “the leads from Marketing are just junk.” Or from Marketing you often hear “why doesn’t Sales just follow up on the damn leads we give them?” Both are valid criticism. The answer lies in having an explicit agreement on the handoff. If you use sales force automation tools like Salesforce.com or Siebel CRM on Demand, you can even hard code these definitions into the tool. I recommend agreeing on explicit criteria by which leads are judged. The table gives you a template for your teams to develop their own criteria for lead quality.

The point here is to sit down and have two representatives from both organizations come up with the success criteria and build this into the Inside Sales efforts or other processes used to handoff leads to Sales. You’ll find that this will not eliminate the healthy tension between the two teams but it does get them focused on what really matters—qualified leads for sales action.
Define “success” as a booked appointment with the prospect
Another great opportunity to drive the right teamwork is to demand that leads are evaluated on the number and quality of actual appointments with the customer prospect. Too often I see Marketing just focus on cost per lead as the figure of merit in ROI calculations. This approach puts neither weight on higher quality leads nor emphasis on conversions to actual appointments both of which are far more important to driving sales. The other advantage of this is that it puts pressure on Sales (or Inside Sales) to convert “inquiries” which are just unqualified leads into booked meetings for sales action. Again, both Marketing and Sales are held accountable to maximizing the number of appointments meeting the criteria above.
Use the $100 test to prioritize product pricing/feature set requests
Pricing is another classic source of conflict between sales and marketing. Sales tends to blame pricing as a sales inhibitor especially in highly competitive deal situations. Marketing tends to discount the issue as a sign of poor salesmanship. The problem is that no one is stepping back and looking holistically and prioritizing what matters most to customer acquisition which is always a combination of pricing and product feature set or value proposition. I recommend getting reps from both organizations together in a room and giving everyone an opportunity to allocate $100 across a number of perceived inhibitors to winning profitable business. The operative words to focus the team are “winning” and “profitable” business. Have them write down their spending mix on a piece of paper to avoid group think. If people are forced to distribute $100 across, say, the top ten topics including pricing and some feature gaps, you’ll find that pricing may not the #1 sales inhibitor or competitive issue.
I encourage you to apply all three practices here over the next quarter and see what impact it has on closing business. I promise you that it won’t stop the bickering, name calling, or even occasional fist fights. But it will force some goal congruence between two key functions that absolutely must align to support your business objectives.
Posted June 4, 2005 | Permalink
Posted to Leadership
, Marketing Management
, Sales Effectiveness
