How to Build Sales & Marketing Interlock to Consistently Achieve Revenue Targets

I’ve seen plenty of companies where the sales and marketing teams battle one another. Sales and marketing simply can’t exist without the other.?They must act as one to attract, engage, and convert prospects into customers in the shortest time possible.

I’ve made it a point to maintain a productive relationship with my sales counterpart because I recognize that sales and marketing have fundamentally the same goal: to increase revenue. Too many marketing professionals think their job is to increase visibility, generate content, or manage the website. They fail to realize that they must do all this in a way that contributes to revenue, and that is where most rifts open and velocity slows.

The first way to promote alignment is to make sure that everyone on the marketing team understands that the most important metric is revenue. I started each meeting with a recap of our target revenue for that quarter and what it was at the time. After a while, everyone else on the team picked up this habit, and soon each member of my team thought of their job performance in terms of revenue.

Beyond that, I have put in place a framework that leads to a sales and marketing marriage made in heaven. That framework focuses on building goal synchronization around a single version of the truth.

Build Goal Synchronization

Building goal synchronization sounds simple, doesn’t it? Yet in many companies, the sales and marketing teams rarely meet formally to jointly set goals, assess performance, or coordinate actions. In my experience, these formal meetings should occur at least once a month. But the way you conduct these meetings also matters. The key to maintain this transparency and synchronization is to agree on a single version of the truth.

Agree on a Single Version of the Truth

I’ve consulted for countless companies whose sales and marketing teams have different understandings of the goals and what each has to do to ensure goal attainment. When that happens, they waste tons of time just trying to figure out what is going on and how each team is performing. Then when something goes wrong, such as missing revenue targets, everyone defaults to needless finger-pointing. Nobody knows who was responsible for delivering what. Emotions take over.???????????

To avoid this, get crystal clear about quarterly goals and KPIs, including which teams own what KPI. In my experience, marketing should own these results:

·???????????????Website visitor-to-lead conversion rates: The percent of website visitors who become leads

·???????????????Leads generated: The number of new leads that marketing generated

·???????????????Cost per lead:?Total marketing spending divided by number of new leads

·???????????????Lead-to-opportunity and conversion ratios:?The rate at which leads are being converted into opportunities and customers

·???????????????Marketing-sourced pipeline: The amount of pipeline marketing has sourced

·???????????????Marketing-sourced revenue:?The amount of money marketing has sourced

·???????????????Customer acquisition cost:?The amount of money it costs to acquire a new customer, which includes both marketing and sales spending

·???????????????Marketing ROI:?The overall return on investment from marketing activities

On the other hand, sales should own these results:

·???????????????Total revenue: Total revenue (new, upsell, and cross-sell)

·???????????????Sales- and channel-sourced pipeline: The amount of pipeline sales or channel sources

·???????????????Sales- and channel-sourced revenue: The amount of revenue sales or channel sources

·???????????????Sales growth: The increase or decrease in revenue from two different time periods

·???????????????Sales closing ratio: The rate at which sales converts leads to customers?

·???????????????Average sales cycle: The number of days it takes on average to convert a lead into a customer

·???????????????Average revenue per account: The average dollar amount per closed deal, which is often compared against CAC to determine whether the average customer can generate enough revenue to cover the cost of acquiring them?

Both sales and marketing should own these results:

·????Customer lifetime value: The potential value that a customer provides your business, which is often compared against CAC ?

Each team’s responsibilities and day-to-day duties flow from the KPIs. For example, marketing needs to source a specific number of leads each quarter. Before the quarter starts, marketing can commit to delivering a certain number of leads to each salesperson. Then when a salesperson doesn’t close enough deals, or if they complain about not getting enough leads, you’ll know what went wrong to cause that breakdown. A quick look at the numbers will tell you if the salesperson did not get enough leads, or if they simply didn’t convert the leads they received at a high enough rate.

If a sales rep did not receive enough leads, then marketing would need to get involved. I always left a little bit of my budget unspent for exactly these scenarios, and used it to funnel leads to the rep. If the rep failed to convert their leads, then sales leadership would get involved and perhaps provide more training. This level of detail and alignment around goals will make it much easier for teams to proactively collaborate, while also enabling you to solve problems before they fester. With that clarity and alignment, you can then have far more productive and reasonable conversations.

During my career, whenever somebody blamed me or a member of my team for a failure, I wouldn’t engage with them based on opinions. I demanded that these conversations rely on numbers and facts. If marketing agreed to source a certain amount of pipeline for sales, and then sales missed their revenue numbers, sales might blame marketing for sending them crummy leads. But we would have to look at the actual numbers. Did marketing source the right amount of pipeline based on its goals? Were lead-to-opportunity conversion rates in line with the goals? What about opportunity-to-revenue conversion rates? Because we all knew what we were supposed to deliver, we could see who was accountable, what went wrong, and know how to fix it.

As part of the responsibilities, make sure that you establish service-level agreements with the sales team about lead follow-up. When you’ve done everything right, elapsed time is the single biggest killer of deals. The longer a sales cycle stretches, the greater the chance that something beyond your control will halt the deal. The budget might disappear, the decision maker you targeted might get promoted, fired, or switch jobs. The company’s priorities might change. This is why velocity matters, and this is why salespeople should follow up with leads quickly. A service-level agreement holds the sales team accountable for following up with leads in a specific time frame. The actual agreements vary, usually depending on how hot the lead is.

Finally, your CRM must be the system that gives you a single version of the truth. When you’re tracking, analyzing, or reporting on status vs. goals, you must do it from one system that everyone uses.