By Lorna Heynike, Senior Vice President of Marketing, CallidusCloud

As sales leaders look for ways to be more effective (in many cases with fixed headcount), they need to look at the broader organization to identify adjacent groups that can bolster their performance, including the call center, sales engineers, inside sales reps, and yes... marketing.

Can sales really look to marketing to help boost their revenues and effectiveness?

There's a lot of talk about sales and marketing collaboration. But can sales and marketing really collaborate to boost revenues? They must. But the force of the organization needs to ensure their collaboration. Businesses with strong sales and marketing alignment do in fact grow significantly faster relative to competitors, and lose fewer customers. Still marketing is often overlooked as an integral part of the broader sales function, primarily due to the perceived, and often real, unequal accountability assigned to the two departments. The Aberdeen Group reported that in best-in-class organizations, 40% of the sales forecasted pipeline is generated by marketing[1]; in fact 35% of best-in-class organizations tightly align marketing activities to specific sales objectives and goals[2]. Marketing needs to be equally accountable for sales results, including pipeline creation, quota attainment, revenue growth, average deal size, and win rate.

How do you make marketing accountable for sales results?

The same principle that drives sales behavior needs to be applied to marketing as well: leveraging incentives that drive key sales targets. For achieving critical sales objectives, salary-based compensation should be balanced with more targeted incentives. This includes leveraging quota-based bonuses, special incentives, and MBO programs to focus marketers as individuals and as a team on driving activities that are critical to filling the sales funnel, and critical to closing business.

To drive real sales and marketing collaboration, marketing must be goaled – and incented - in alignment with sales goals:

  • Filling the sales funnel with the opportunities sales needs: One way I've seen this work is to take the sales quota and work backward to build a marketing opportunity quota. For example, you can build the marketing quota based on the number of accepted opportunities sales requires to meet their quota. (This is based on the historical close rate of accepted opportunities and the average deal size.) This focuses marketing on the leading activities required for building pipeline, but also hones their focus on mining leads specifically that convert to opportunities, rather than pure lead generation.
  • Opportunity yield: Another key metric to ensure marketing focuses on quality as well as quantity of leads is to goal them on the actual pipeline value of accepted opportunities, or close value. This helps focus the team on higher yield prospects and verticals and not simply on opportunity volume targets.
  • Close rates: The third target should be based on the % conversion to deals. This helps focus marketing not only on driving competitive advantage and monitoring competitive win ratios, but also on mining for opportunities with a high propensity to close. In addition, marketing can help provide key product, competitive, and customer knowledge to move deals swiftly through the pipeline when focused on close rates. Holding budget constant, deal conversion represents the greatest potential for growth and for driving higher effectiveness ratios.

It's a two-way street

If you are asking the marketing team to deliver more, higher quality leads, then you must also drive accountability in your sales organization to develop those leads. Most important - Sales should have at least one goal based on lead development, and lead development and conversion rates should be linked into regular pipeline reviews and coaching programs. As a best practice, sales is often goaled based on meeting service level agreements for lead follow up (for example, 3 days maximum before first contact) – this ensures leads are consistently corroborated for their quality and that they are all followed up before they turn cold or flee to a competitor with disciplined follow through.

Second, sales teams need to support their marketing leadership with hard data on lead quality. This will not only optimize your sales effectiveness today, but will also help drive more funding for future sales initiatives.

For more thoughts on driving sales and marketing collaboration, check out the LeadFormix blog on marketing alignment and look for our upcoming posts on how CallidusCloud fuses marketing and sales with its Marketing Automation and Sales Enablement platform.

Let me know your thoughts. Leave a comment below or email me at salespulse@callidussoftware.com.

[1] "Sales and Marketing Alignment: The New Power Couple," Aberdeen Group, 2011