5 symptoms (and hidden causes) of profit-killing alignment gaps between your sales & marketing.
Your sales team has never been busier. Your website has been redesigned and is looking good. Your marketing department has been feverishly producing marketing collateral, ads and social media posts. You’re spending money on events and promotions and making a lot of contacts.
So, where’s the profit growth these efforts should have sparked?
You’re not alone
It’s a frustrating and all-too-common scenario in business-to-business (B2B) sales and marketing. Your people seem to be doing the right things but the results aren’t there. External challenges, like the effects of the COVID-19 pandemic, are obviously real.
But failure can also hide behind what looks like success:
- Revenue growth hides a lack of profitable growth or outright declines because sales accepts small, one-off product sales/projects with the hope of getting something better, later (which doesn’t happen)
- An increasing client base hides the reality that only a small number of client engagements are actually profitable
- A few profitable products and services obscure the dogs in your portfolio
- Your direct sales team is hitting quota but at the expense of channel partners, preventing you from growing your total market
- You’re achieving internal margin goals but leaving money on the table because the market is willing to pay more
Is misalignment to blame?
Here are five symptoms that suggest your sales and marketing efforts are not aligned, along with the likely causes and best practices for closing the gaps.
Promotions
Your website looks great. The content is fresh and calls to action (CTAs) are where they should be. You’ve got marketing automation software in place. You’re pumping out monthly newsletters and 5-10 tweets and Facebook updates a day. But it’s not generating enough leads, and those that are generated are not converting into sales.
Placement (channels)
Channel sales are sagging, which has your executive team wanting to increase direct sales – which will put you into conflict with loyal channel partners. Meanwhile, your marketing department complains that growth opportunities are not being capitalized upon by either current channel partners or direct sales.
Products (and services)
You find yourself in a race to the bottom for the lowest price. However, a few of your competitors are growing despite selling their products and/or services for a higher price.
Pricing
Your sales are there but the profitability is not. Sales is thankful just to get the deal, but marketing feels a lot of money is being left on the table, and wonders about the lack of recurring revenues.
Overall results
Marketing is busy. Sales is busy. But you’re still falling short of sales and profitability goals—again.
What are the causes, and what should you do about them?
Each symptom traces back to a specific gap between how sales and marketing operate. Below are the causes behind all five.
Promotions
While they need to look good, the effectiveness of your website, marketing materials and campaigns relies on how well your content resonates with your target markets.
To achieve this, marketing needs to be in tune with the market and its requirements. That’s why it’s critical for marketing to talk to end-users, channel partners, market influencers—and your sales team.
Your sales team is in the trenches every day. They hear all the issues, concerns and fears of your market. They hear what your competitors are up to. That’s why it’s critical that their input is incorporated into all marketing promotions.
After all, the purpose of your marketing promotions is to make it easier to make a sale. How can you do this if marketing is not collaborating with sales in their creation? And—unless you get lucky—no marketing campaign will be successful without timely and coordinated sales follow-up.
Once co-created materials are in place, qualifying the leads coming in is critical to converting them into sales—and to avoid wasting time on leads that should be disqualified as soon as possible. To do so, your sales and marketing team need to work together to establish criteria for defining what characteristics differentiate a suspect (someone who expresses interest but is not serious) from a prospect (someone with serious interest and worth the effort of cultivating a relationship). We believe lead qualification/disqualification is best performed by inside sales. Qualified leads should either be closed by inside sales or, if it’s a longer sales cycle, the lead may be passed to outside sales or a channel partner.
Placement (channels)
By selling through channel partners, you exchange margin for exposure to their served markets without having to make heavy investments in salespeople, advertising and geographic expansion.
While your sales team owns these relationships, marketing can help meet channel requirements more effectively by determining:
Which new channel partners to recruit in both existing and new markets, including international expansion
The right mix of marketing support to drive the most leads to channel sales (e.g. marketing assets, advertising, co-op/market development funds, etc.)
How to balance the success of channel partner sales with that of your direct sales team
Products (and services)
Finding new ways to satisfy requirements of the market creates innovation. To do so, you need to understand the needs of your end-user target markets. This is best performed by product managers within the marketing department, who then incorporate this information into your product roadmap and the new product development process.
How do product managers stay in tune with the market? It’s important for them to get out into the field to speak with end-users, channel partners and influencers. Sales can make these conversations happen and acquire competitive intelligence (pricing, new products coming out, channel practices, etc.). Their input is also crucial in the product development process because they speak with prospects and clients every day.
Sales is also key for beta testing new products. Beta testing is the process of testing prototypes in the field to identify bugs and other issues before launch. Sales can help set up beta testers (often existing users or strategically important prospects), handle logistics and obtain the feedback that marketing needs to finalize new products and launch them with confidence.
Once new products are launched, marketing can help sales by “productizing” the initial needs assessment that sales conducts for each prospect. Marketing can ensure these needs assessments are comprehensive, structured, contain reporting and recommendations, are repeatable—and can be charged for instead of sales giving away this service for free. (No more leaving money on the table).
Pricing
There are several ways that poor pricing methodology and a scarcity vs. abundance mentality can leave money on the table.
If you use cost-plus pricing, you could be selling yourself short if comparable or lesser products/alternatives cost more.
For example: if a product costs $1,500 to produce, you may charge $2,000 in order to satisfy internal 50% margin requirements. However, you could instead make 100% to 200% margins if a lesser product costs $3,000, and you charge $3,500 to $4,000 and make 133% to 167%.
Additionally, if sales is not selective with new accounts, you may find that your delivery team’s time is consumed with supporting small, price-sensitive and high-maintenance customers instead of larger, low-maintenance and more profitable clients.
This happens because sales is happy to just get the deal, any deal—they lack the confidence to turn away small deals that take away from the time needed to win larger, more profitable opportunities. They hope the small deal some day leads to the big deal or recurring revenue, and it rarely does.
Furthermore, if you don’t effectively use lead registration, your direct sales team may steal new business from your channel partners. You could lose 10–20% margin or more on these sales, not to mention the costs of eroded or terminated channel partner relationships.
Overall results
Collaboration between sales and marketing is key to alignment, with both sides alternating as the lead and support.
But communication and collaboration between sales and marketing staff is just the beginning of a truly effective strategy.
True alignment requires understanding and leveraging the deep expertise that each side brings, and ensuring that every effort aligns with best practices for both sides.
For every effort led by the sales team, the marketing team should provide close support—and vice versa. While sales teams can take the lead in efforts around placement and pricing, the marketing team should offer direct support. Likewise, your marketing team can steer efforts around product and promotions, but sales teams should be in an active, supporting role.
Collaboration between sales and marketing
| 4 Ps | Promotions | Placement | Products | Pricing |
|---|---|---|---|---|
| Lead | Marketing | Sales | Marketing | Sales |
| Support | Sales | Marketing | Sales | Marketing |
| Overall | Sales & Marketing Collaboration | |||
Where to start?
Only a thorough assessment will surface the sales and marketing alignment gaps that keep your profits in check, and establish the real cost of leaving them unresolved. Innovaxis and Infinity join our sales and marketing expertise to help B2B companies pinpoint gaps and take action to close gaps to align sales and marketing.
Contact us to learn if our Sales & Marketing Alignment Assessment is right for you.
Is your sales and marketing aligned?
Contact us to learn if our Sales & Marketing Alignment Assessment is right for you.
About Innovaxis Marketing
If you’re frustrated by a lack of results from your business-to-business (B2B) marketing efforts, an Innovaxis B2B Marketing Audit will get to the source of the issues and obstacles standing between you and your goals. The audit includes detailed findings and recommendations around problems, performance and opportunities. The audit’s recommendations form the roadmap for your B2B Ignite Program, designed to accelerate your revenue growth by strengthening your brand story messaging, developing industry thought leadership and generating more leads than ever before—with a resulting ROI that can be as much as 300%+ within the first two years.
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