Why Sales and Marketing Alignment is Key for Revenue Growth

Marketing and sales teams are tied to one overarching goal: creating revenue growth for their organizations. While the need for synergy among these teams is apparent, an astonishing 96% of sales and marketing professionals admit to having difficulties with aligning strategies, objectives, and KPIs.

This situation can have negative impacts on organizations, from high customer acquisition costs to slow organizational growth.

On the flip side, sales and marketing alignment has proven highly beneficial for companies across all industries, helping B2B and B2C organizations close 38% more deals and generate up to 208% more revenue from their marketing efforts.

In today’s guide, we will explore the concept of sales and marketing alignment, its benefits and challenges, as well as the most crucial step you’ll need to take to gainfully align your organization’s sales and marketing teams.

What does Sales do for Marketing?

Sales representatives have the advantage of communicating one-on-one with prospects. Thus, they have access to all the burning questions and sales objections these prospects might have.

While every question and sales objection a sales rep gets is valuable, the ones that arise most frequently are the most impactful. Sales reps also understand the diverse ways an organization’s solutions are applied to real-world problems, as well as how the market dynamics are changing.

Sharing these insights with the marketing department will help marketers build assets like FAQ pages, customer testimonials, product guides and comparisons, feature-specific pages, case studies, and more.

These assets help marketing teams generate interest and nurture leads more efficiently.

Furthermore, sales teams support marketing by offering feedback on campaigns. By providing feedback on the percentage of leads that actually convert, both teams can properly gauge performances and make improvements where necessary.

How can Marketing Support Sales?

Marketing teams get the first contact within the sales funnel. They’re well-versed in building ideal customer profiles (ICPs) and generating interest in the organization’s products and services.

Marketing teams can support sales departments by sharing data on:

Audience demographics;
Behaviors and interests;
Challenges; and
Size, revenue, and decision-makers of a target business (for B2B organizations), etc.

This will enable the sales reps to tailor their outreach in the most relevant ways possible.

Marketing teams can also support sales by delivering sales enablement content that sales reps can share with customers to help influence their buying decisions.

Furthermore, to help sales reps get better results, marketing teams can provide competitive intelligence, ensure that leads are properly nurtured and qualified, and maintain engagement even after conversion.

What is Sales and Marketing Alignment?

Sales and marketing alignment (also known as smarketing) is the process of repositioning sales and marketing teams to work as a unit, sharing a common system of communication, strategies, and goals for the overall growth of their organization.

Marketing and sales teams have a long history of working independently, including generating their own data, building strategies, and running campaigns and outreach in silos. A traditional conversion funnel would have marketers at the top and sales reps at the bottom.

Once a lead has been “warmed” long enough, marketers merely hand them over to the sales teams and turn their attention to the next one.

This disjointed approach results in low performance and loss of revenue. According to a report by Marketo and ReachForce, only about 20% of marketing leads are actually used by sales teams. This is solid evidence of the huge disconnect between both teams.

By implementing smarketing, both teams will be involved at every stage of the buyer’s journey, supporting each other’s roles and ramping up results.

The Concept of Revenue Marketing

Revenue marketing is a holistic process that aligns sales and marketing efforts toward achieving new revenue goals.

Marketing campaigns can be designed to build brand awareness, generate leads, increase thought leadership, and support product launches, among others. However, revenue marketing is directly tied to an organization’s revenue goals and thus creates an overlap that results in the collaboration of marketing and sales teams throughout the conversion journey.

While running marketing campaigns to impact your revenue, it is essential to identify those earnings to measure the efficacy of your efforts. This is where revenue recognition becomes essential.

‍Revenue recognition helps brands connect their marketing efforts like running ads on social media to conversion actions such as completing a sale or receiving a payment to provide a clear picture of the effectiveness of the said marketing efforts.

This would make revenue marketing seem identical to smarketing. However, they’re not quite the same.

Smarketing aligns marketing and sales teams with organizational goals, like customer acquisition, churn reduction, brand awareness, and revenue growth.

On the other hand, revenue marketing is specific to revenue growth. Thus, you can say that revenue marketing is a subset of marketing.

Marketing-Sales Service Level Agreements (SLAs)

A marketing-sales service level agreement (SLA) is a contract outlining a set of deliverables marketing and sales teams are expected to provide each other for every stage of the conversion journey.

A marketing-sales SLA usually includes:

A target quantity and quality of leads the marketing team should provide at each lifecycle phase;
Target outreach attempts for the sales team, as well as timeframes for lead follow-up;
Definitions for sales qualified leads (SQLs) and marketing qualified leads (MQLs); and
Guidelines for feedback and communication between both teams.

By outlining how both teams will collaborate, marketing and sales executives curb the possibility of misalignment, track results faster, and boost productivity across the board.

Why do you Need Sales and Marketing Alignment?

The constantly evolving consumer journey has consistently presented new challenges for sales and marketing teams, highlighting the need for collaboration.

According to a survey by Marketo, sales and marketing alignment ranks as one of the topmost marketing priorities among SaaS companies.

This section will examine some of the main reasons you should consider aligning your marketing and sales teams.

Better Sales Enablement

Sales enablement plays a crucial role in helping organizations close more deals and achieve revenue growth. However, LinkedIn reports that 80% of content created by marketing teams is never used in sales, and according to Marketo, this is because the content is considered irrelevant to the buyer audience.

Marketing and sales alignment can improve sales enablement by providing an avenue for feedback between marketing and sales teams. This allows marketing teams to create valuable content based on input provided by members of the sales department.

In fact, 84% of sales professionals achieve their quotas when there is a best-in-class sales enablement strategy, and by ramping up sales enablement, organizations gain up to a 49% win rate.

Improve Quality of MQLs

Marketing qualified leads (MQLs) are leads that have shown “tangible” interest in an organization’s products and services. These MQLs are usually passed on to the sales team for proper follow-up and conversion.

However, 79% of these MQLs do not convert into sales due to poor nurturing.

Marketers are notorious for sending in leads that aren’t properly warmed up, and salespeople are infamous for ignoring up to 80% of leads sent in by marketers.

Marketing and sales alignment fixes this by creating a set of standard criteria that define what a qualified lead is in the context of the organization’s offerings.

When both teams have a standard definition of what a qualified lead is, it becomes easier to implement lead scoring and identify prospects that should be prioritized. That way, the quality of MQLs (and conversions) will improve drastically.

Better Understanding of the ROMI of Marketing Copy

Especially in large B2B organizations, long and complex sales cycles have made it harder for marketers to track the actual impact of their marketing content on sales. This is because sales teams have reporting systems that share no connections with the marketing departments.

Alignment eliminates this challenge by providing a shared system for reporting and analytics. This not only boosts transparency between both teams but also makes optimization swifter and more efficient.

Improved Financial Performance

In the United States alone, companies burn an estimated $1 trillion annually due to misalignment between sales and marketing departments.

On the plus side, organizations with aligned marketing and sales processes have reported up to 208% more returns from their marketing efforts, as well as a 32% YoY revenue growth.

Well-aligned teams experience shorter sales cycles, low bounce rates, and higher conversions, all of which immensely contribute to an organization’s financial success.

Cohesive Buying Experience

Recent studies show that, on average, customers do not contact salespeople (or wish to be contacted) until they’re 57% through the purchase decision stage.

This results in long sales cycles and difficulties tracking conversions from the marketing perspective.

When sales and marketing teams align, they achieve a holistic view of the entire purchasing journey: analyzing interactions, qualifying leads, and optimizing performances. This makes it easier to ignite top- and middle-funnel engagements and paves the way for productive bottom-funnel interactions.

What Restricts Sales and Marketing Alignment?

There has been an upsurge in the visibility of the concept of sales and marketing alignment over the last decade. However, achieving a solid alignment between marketing and sales teams is not as easy as it sounds.

Here are a few constraints that can hinder alignment between sales and marketing teams.

Lack of a Centralized Technology and Data Infrastructure

Marketing and sales teams rely on different technologies for collecting and measuring data during their day-to-day activities. This consequently creates data silos—a closed system where data from one team is inaccessible to members of another team.

Without a centralized system for collecting and tracking data, it becomes impossible for marketing and sales teams to exchange insights and function as a unit.

Inconsistent Metrics, Goals, and Definitions between Marketing and Sales Teams

For a typical marketer, a low cost per lead (CPL) is an indicator of a successful campaign. It simply means that the campaign is generating leads at a good cost for the team.

While a low CPL may mean a successful campaign for marketers, it doesn’t mean much to salespeople. This is because 79% of leads generated by marketers don’t convert to sales.

On the other hand, sales people measure success by a different set of metrics that vary across industries. In D2C, success can be measured by win rates and revenue generated. In B2B, sales professionals essentially measure success by considering revenue and pipeline amount. Pipeline here refers to an “opportunity: that could eventually lead to revenue generation.

As both teams utilize different metrics and definitions for their respective goals, it becomes tough for them to correctly gauge their performances and implement a holistic optimization process.

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No Direct Communication

Lack of a direct communication channel between sales and marketing teams makes it challenging for alignment to be achieved.

Misaligned organizations have no dedicated tools for centralized communication between marketing and sales teams. Also, leaders of such teams rarely schedule meetings to analyze strategies and share ideas.

This limits transparency and frustrates the exchange of feedback on marketing and sales processes.

71% of marketing leaders say they need more visibility around what happens at the lower end of the funnel, while 57% of sales leaders demand more insights into marketing activities. This can’t be achieved without sufficient communication.

Most aligned organizations use customer relationship management (CRM) platforms like HubSpot, Freshworks, and Salesforce to foster communication and collaboration between sales and marketing teams.

The First Step Toward Alignment: Centralizing Sales and Marketing Data

The 21st-century sales and marketing ecosystem is heavily driven by data. As customer journeys continuously evolve, it has become more crucial for marketing and sales teams to function as a unit in terms of how data is utilized for achieving organizational goals

Consolidating marketing and sales data into one place is the first step growth-driven organizations take to achieve alignment between marketing and sales teams. By centralizing data from both departments, executives can easily generate reports and dashboards using historic and real-time data.

This helps them get a holistic view of performances across the board and presents an opportunity for transparency, communication, and cross-pollination of ideas.

To efficiently centralize data for sales and marketing alignment, you will require a robust data infrastructure that can extract, normalize, and deliver your organization’s data safely and accurately.

This is where Improvado excels.

Improvado is a revenue data platform that extracts data from disparate sources, transforms it into digestible formats, and loads it to a central location. This data can then be routed to business intelligence (BI)/analytics platforms that serve as a single point of truth for cross-team workstreams.

This is a gamechanger for organizations looking to align their marketing and sales teams for several reasons:

Improvado eliminates the need to manually harmonize disparate metrics from marketing and sales teams;
It makes it easy for leaders to identify efforts that bring in the best outcomes as well as hidden trends that can impact results; and
It provides transparency, builds trust, and establishes opportunities for communication, among others.

All these combine to help you achieve predictable outcomes and hit new revenue goals.

If you want more details about how Improvado can foster alignment and help your organization scale, feel free to schedule a call with an expert using the form below.

Conclusion

The modern business ecosystem prioritizes the omnichannel approach and uses a colossal amount of data from marketing and sales activities. However, accurately aggregating and attributing sales and marketing data to revenue can only be possible when both teams are on the same page and speaking the same language.

Whether you’re a B2B or a D2C organization, aligning sales and marketing teams is a smart way to ramp up your organization’s performance, make your customers happier, and be on your way to hitting a 208% growth in revenue.