Put the “and” Back in “Sales and Marketing”

Nowhere else in the executive suite of a typical corporation are two functions as closely intertwined as sales and marketing. Yet for all the shared responsibility, the marketing and sales relationship has often been a contentious and lopsided one, with sales dominating in B2B sectors while marketing leads in B2C ones. The joint challenge today for CMOs and heads of sales (or CSOs – Chief Sales Officers) is how they can work together to discover insights that matter, design the right offers and customer experiences based on those insights, and then deliver them effectively to the right people across multiple channels to drive growth. McKinsey research shows that companies with advanced marketing and sales capabilities tend to grow their revenue two to three times more than the average company within their sector. But to get to that top tier, marketing and sales executives can no longer afford the inefficient silos that have long characterized the relationship. Here are three important elements of the CMO-CSO partnership to get right: 1. Build a joint local strategy. CMOs and sales leaders need to become experts at identifying and tapping micromarkets where there are often significant overlooked growth opportunities. But the real power of the partnership comes from their ability to bring the best of each of their departments—as well as pricing, operations, and other groups—to bear in exploiting those micromarket opportunities. While that might sound obvious, heads of sales tend to set their goals geographically while CMOs often target segments, making it difficult to have a common baseline for comparing and checking progress. Leaders need to focus on how to create meaningful targets that use the best of each approach. Consider the case of an Asian telecommunications company that found 20 percent of its marketing budget was being squandered in markets with the lowest lifetime customer value. The company shifted resources to its most lucrative markets, where two-thirds of the opportunity lay. Marketing then partnered with sales to reset customer acquisition goals at each micromarket, basing them on each market’s potential. They set, and met, revenue targets that were 10 percent higher than in previous years. The CMO and head of sales should take the lead in pulling their departments together to jointly identify the best growth opportunities and translate the resulting insights into tools and plans the marketing and sales teams can use. One important way to focus the effort is by managing the sales pipeline together. “It is very important for the head of sales and the CMO to have ongoing discussions about pipeline strategy and how the pipeline gets built,” says Linda Crawford, EVP and GM, salesforce.com. “People nailing that are taking the lion’s share of the business these days.” We have found that when this process works well, marketing often takes on an expanded role by, for example, providing sales with data analytics and by supporting the development and testing of sales plays for a specific micromarket or customer peer group. 2. Collaborate around the customer decision journey. “Because customer expectations have changed so much, it’s even more important that marketing, sales and even service work closely together,” says Lynn Vojvodich, CMO for salesforce.com “Ultimately, you want to create personalized customer journeys that seamlessly integrate touch points across these functions.” The best CMOs and sales leaders are putting mechanisms in place to create a consistent experience for their customers, and identifying which marketing and sales investments will yield the greatest returns. That starts with developing a deep understanding of how customers behave and make decisions. While hardcore data analysis will get you partway, interviewing sales reps is also crucial to uncovering what customers want. “You’ve got to listen to the guys who are taking calls 24/7 and dealing with a customer every two or three minutes,” says Gary Booker, CMO for Dixons Retail. “They really know what the customer wants.” Marketers and sales people should together be spending a significant percentage of their time with customers to understand current and emerging needs. One well-known product company, for instance, bypassed its distributors and embedded some of its engineers in paint shops because customers had reported having trouble keeping the walls clean. While there, they discovered dust in paint bays was causing defects. So they created a new system for their distributors that reduced paint job defects by 49 percent. For this sort of collaboration to succeed, the CMO and head of sales need to be deliberate and visible in working with each other. This needs to go further than simply sending out joint emails and joining each other’s meetings. The CMO and head of sales should map out skills and capabilities needed to reach their goals, identify the skills that currently exist and where they reside in the organization, and identify and plan to redress talent gaps. In addition, the two leaders need to identify disconnection points between the two groups and develop processes to bridge them. When it comes to data, marketing insights teams have to adopt more of a customer service mentality, approaching sales reps on the front lines more like customers. From the sales side, teams need to be trained to take the insights generated by marketing and act on them. Teams from each function can also participate in joint assignments, and team members can be rotated through each other’s departments. Field marketing can also bring marketing closer to the sales force — and the customer. One European retail bank, for example, set up “opportunity labs” in its branches and agencies—i.e., at the point of delivery to the customer—where marketing could come together with sales to develop new customer programs. 3. Create a technology engine that powers the front lines . Investing in better and more useful technologies is critical for sales to move more quickly and effectively on the leads that marketing can uncover. That means investing in technologies to help turn ubiquitous mobile devices into sales tools and becoming more sophisticated about collecting data. In some industries (e.g. high tech), marketing can work with sales to define what data would be valuable then work with product development to create sensors that provide that data. Products can then provide feedback on when to get maintenance and when the product will have reached the end of its useful life. But for all the potential technology provides, it’s important not to lose sight of what the point is. The fundamental truth about technological innovation is that it needs to help sales people make better decisions on the front lines. In the rush of excitement to build great tools, the resulting analysis is often either too complex for sales people to use or isn’t relevant to the immediate business opportunity. The challenge for the CMO is to reduce all the heavy backend analysis to a set of simple actions and guidelines that front-line sales people can use. And the challenge for the head of sales is to effectively articulate what insights are needed to make better decisions. Caesars has taken that point of view to heart. When a guest has entered one of their hotels or casinos and interacted with it (through use of their loyalty card, or increasingly, based on beacons and similar technology throughout their properties), a host (the person responsible for helping and serving customers) will be alerted on their Blackberry or iPhone. That alert displays their historical behavior, what they have been interested in, what experience they had when they were last there, what food she or he likes, and where to find that person. A cargo airline provides another example. Their marketing team developed a complex model that took all the frequently changing dynamics of the cargo industry, as well as opportunities for different negotiation strategies based on supply and demand, into account. But that wasn’t the real win. The company then took all that complexity and hid it behind a simple dashboard that it gave to the sales force. This dashboard provided simple guidelines on flight capacity, corresponding pricing, and competitor options. The result? A 20 percent boost in share of wallet. The CMO and head of sales stand on the front lines of growth. They are best positioned to spot and understand emerging trends, build strong bonds with customers, and distill new opportunities into real action. But finding above-market growth will remain elusive until CMOs and heads of sales take the lead in developing a more cohesive approach to the marketplace.

Put the “and” Back in “Sales and Marketing”

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