Sales and marketing alignment is like music to the ears of most organizations. Or, we can say “water and oil” since both don’t mix. But then, is sales and marketing water and oil? Can they align?
Most organizations treat sales and marketing as two different departments. Thus, they do not see any alignment between both working or yielding positive results.
Merging two departments, like sales and marketing, might seem impossible on paper. But that isn’t the case in reality. An alignment can yield significant results for an organization.
In this post, we’ll consider the following:
- The Meaning of Sales and Marketing Alignment (Smarketing)
- Why Sales and Marketing Alignment Is Necessary
- Must-Know Sales and Marketing Alignment Statistics
- Barriers To Sales And Marketing Alignment
The Meaning Of Sales And Marketing Alignment
Let’s start by looking at the word “Alignment.”What is an alignment? It refers to the process of arranging parts so that they’re in the proper relative position. Two or more parts become one when aligned. They move together and function as one.
What is sales and marketing alignment? The alignment between sales and marketing is the same as the definition above.
It involves unifying sales and marketing so that their objectives become the same. For instance, if the marketing department’s objective is lead generation, closing becomes part of it when aligned with sales.
When aligned, sales and marketing objectives become lead generation and closing deals. Both now have to work in tandem to ensure the generation of high-quality leads and closing more deals. Sales and marketing will also have a single revenue-based objective.
Proper sales and marketing alignment helps create a synergetic cross-functional team. The team then merges the sales pipeline with the marketing funnel under a common objective, integrated technology, adequately-synchronized processes, and standardized expectations.
The purpose of aligning sales and marketing is to simplify business processes and improve productivity, lead generation, sales, and closing. However, such an alignment won’t yield results unless each team member is ready to work together.
There has to be an alignment of goals, priorities, and KPIs (Key Performance Indicators) to ensure that both teams do not operate blindly or independently of each other.
A Handy Tip: You probably must have heard the term, “Smarketing.”Yes, you guessed right. The letter “S” means “sales” + marketing.
Smarketing is a term used to describe the alignment of sales and marketing departments in an organization.
Why Sales and Marketing Alignment Is Necessary
Is your company’s sales and marketing team aligned? If yes, then bravo! Your company understands the impact merging both departments can have on its growth.
Let’s focus on the benefits of sales and marketing alignment – Smarketing.
1: Sales and marketing alignment ensures the creation of valuable content throughout the buyer journey:
Aligning sales and marketing teams help to ensure the creation of high-quality and valuable content throughout the buyer’s journey. It also ensures an increased conversion rate.
Marketing not only generates leads. It qualifies and nurtures leads. In aligned organizations, the sales team may look at the sales funnel, identify, and fix existing technical gaps.
Furthermore, marketing and sales merger helps to eliminate content wastage. In research conducted by Sirius, it was evident that 60 to 70% of content produced by B2B marketing departments is left unused.
IDC also considered similar research. In that research, the firm discovered that sales teams don’t use up to 80% of the content marketing produces.
This finding is important because marketers create content for sales and channel enablement. Thus, channels through which content wastage takes place must be identified and plugged. And the best way to address such is via sales and marketing alignment.
In the above research, the content wastage was because sales teams:
- Don’t have knowledge of the content.
- The sales teams don’t have the time and patience to start looking for specific content.
- The high content volume looks scary to sales, as most assume sieving through the myriad of content to find the right one to close the deal is hectic.
An alignment is one of the key strategies to address this problem. Once there is an alignment, marketing, and sales can operate as one to identify and fix challenges plaguing the organization.
Finding out how sales use content will be easy when the content marketing team connects with a sales team. The marketing team will be in a better position to understand how the sales team uses and doesn’t use the content. And ensure content is used more effectively to achieve the organization’s primary objectives – sales and revenue growth.
Organizations need high-quality and valuable content to nurture prospects throughout the journey, transforming them into leads and paying customers. That’s what aligning sales and marketing can render.
Businesses have to take the pain to nurture leads, as failure to do so can have a negative impact. According to Hubspot, 79% of marketing leads don’t convert because businesses fail to nurture consumer connections.
2: Smarketing shortens the sales cycle:
Another reason sales and marketing alignment is beneficial is that it shortens the B2B sales cycle. Now, in what way does this happen?
When the marketing and sales teams align, they become one. Their objectives, challenges, and goals become one.
Aligning sales and marketing allows each team to have a better understanding of what they want to achieve and how they can work together to achieve their goals. These could include finding leads that close faster or leads qualification.
3: Revenue increase when sales and marketing teams align:
An increase in revenue and growth are the two key goals of organizations. Businesses are established to make a profit. But when the reverse is the case, such businesses may have issues surviving.
A proven way organizations can increase revenue is by aligning their sales and marketing teams. Statistics show that such moves can help to curb loss in revenue.
The IDC, a “three-time analyst firm of the year,” did research to determine how aligning bot departments can help boost revenue. And the result of that research was an eye-opener.
IDC discovered that B2B organizations that failed to align their sales and marketing, or, rather, sales and marketing misalignment, could lead to a yearly loss of around 10% of revenue.
Organizations worldwide yet to align their sales and marketing teams could lose huge money. Most organizations may have a better-structured and effective marketing and sales team. They may have a sales and marketing team that is doing great independent of each other. Thus, they may not lose as much as 10% of their revenue IDC stated.
Notwithstanding, any revenue loss is important in business. It doesn’t matter the percentage. So, losses incurred in organizations with misaligned sales and marketing departments can be avoided. The solution is to align both teams.
A mere assumption that sales and marketing departments are aligned is not enough. Organizations must make conscious effort to ensure the alignment is official so that teams from both departments can operate with this mindset.
4: Businesses can grow faster when sales and marketing teams align:
Growth in revenue and sales are the two major goals of organizations. And one quick way to achieve this is by aligning sales and marketing.
An Aberdeen Group research that involved several best-in-class companies with completely aligned sales and marketing teams showed the impact an alignment could have on revenue growth.
In the research, the best-in-class companies considered grew 32% faster than less aligned ones.
5: Organizations with aligned sales and marketing teams compete effectively in today’s rapidly changing B2B sales environment.
The competition in business in this jet age will only get tougher. The sales environment is also rapidly changing and becoming more competitive.
Smarketing is the best strategy that can allow a business to dominate in today’s rapidly changing B2B sales environment. Why? Aligning sales and marketing makes communication between both teams effective.
The alignment usually includes merging both teams into a single department or integrating objectives and workflow. And once aligned, both teams can work together to achieve a common goal.
In today’s sales environment, you need more stakeholders to close deals. In plain terms, you need an average of 6.8 stakeholders to successfully close a deal.
Aligning sales and marketing offers empowers organizations to outperform their competitors. It also offers better responses to the shift in marketing dynamics.
Sharing important data like customer health, market dynamic, content validity, process efficiency, and application of real-world solutions can help cross-functional teams to remain up-to-date on customers’ pain points and register more sales.
Sales And Marketing Alignment Statistics – A Partnership That Impacts Businesses
If statistics are anything to go by, sales and marketing alignment should be a priority in every organization.
Some barriers may hamper this alignment. But before we dwell on them, let’s focus on stats that show how Smarketing (alignment between sales and marketing teams) benefits businesses.
Stat#1: Businesses with robust sales and marketing partnerships are reaping the benefits. It leads to a significant increase in return on investment.
The above image shows the impact aligning sales and marketing teams can have on a business.
According to LinkedIn Research, sales and marketing alignment gave rise to the following:
- Growth in revenue due to marketing efforts by 208%
- Improvement in deals closed by 67%
- Growth in customer retention by 58%.
A Handy Tip: Gaining new customers costs five times (5X) more than retaining existing ones. So, high customer retention caused by aligning sales and marketing shows the move is ideal for businesses.
Stat#2: In the Heinz Marketing Performance Management Report on aligning Sales and Marketing, effective partnership between the two departments (sales and marketing) was attributed as the number-one success factor in achieving significant revenue growth.
This also correlates with the LinkedIn Art of Winning Report that organizations in the United States of America lose around 1 trillion dollars yearly due to sales and marketing misalignment.
The report above shows a lack of strong partnership between both departments is responsible for the huge losses firms in the United States are recording. A complete alignment between both departments would prevent these losses.
Stat#3: Demand Gen Report also sheds light on the impact of sales and marketing partnerships on revenue growth and profitability.
In the report, the firm stated that effective sales and marketing partnerships could lead to an average of 19% quicker revenue growth and a 15% increase in profitability.
Other sales and marketing alignment statistics prove that when both teams work together, businesses record over 27% faster increase in profit.
TAS Group also reported that sales and marketing partnerships could be good news for businesses. An alignment can cause the revenue of businesses to increase by three folds.
Stat#4: Sales and marketing alignment increase sales win rate.
An organization with a great sales team can perform better when partnered with marketing. An alignment allows both teams to work harmoniously, using their knowledge to achieve a collective goal.
MarketingProfs researched how Smarketing impacts sales win rate and discovered something worthwhile. The study shows that organizations that successfully and completely align their sales and marketing departments experience a 38% increase in sales win rate.
Stat#5: Partnership ensures sales reps don’t ignore marketing leads:
Aligning sales and marketing departments allows them to work in harmony. The sales team will be well-informed of the leads generated by the marketing team and use the necessary instruments to ensure the deals are closed.
This won’t be the case if there wasn’t an alignment. According to a study by TAS Group, sales reps only consider half (50%) of marketing leads. And this is mostly caused by a lack of shared understanding.
There has to be a uniform definition in organizations to help ensure the sales team doesn’t ignore marketing leads. And this can be made possible via an alignment between both teams.
An alignment will ensure both teams work with the same expectations, prevent frustration, revenue losses, and eliminate the silos effect between teams.
Stat#6: Sales and marketing alignment lead to lower customer acquisition costs:
Customer acquisition cost (CAC) is a powerful marketing metric. It refers to the money a company spends to acquire a new customer.
To calculate CAC, you must add the total amount spent to convert prospects into customers – advertising, sales, marketing personnel, etc. Then divide the result by the number of customers acquired.
CAC = Cost of sales and marketing/Number of customers acquired.
A lower customer acquisition cost is the desire of every organization. Revenue and profit increase when your CAC is low.
An effective way to lower customer acquisition costs is via aligning sales and marketing. According to research, aligned companies record a 30% reduction in customer acquisition costs. In addition, customers acquired also boast higher lifetime value.
This also coincides with our previous statements that organizations with aligned teams churn less and close more deals.
A Handy Tip: 96% of well-aligned organizations claim sharing technology and data is vital to the success of an alignment.
Sales and Marketing Misalignment Statistics
Unaligned organizations still generate profits. The only concern in being unaligned is the opportunities these organizations are missing. They are losing sales and growth opportunities.
The statistics below shed light on the disadvantages or risks of running an organization where the marketing and sales team are not officially aligned or rolled into one department to function as one.
Stat#1: Most marketers don’t pay attention to sales enablement in their marketing effort.
Here is one of the challenges of running a business where the sales and marketing teams are not aligned. According to Hubspot, 76% of content marketers do not remember to capture sales enablement in their marketing effort.
This mistake would have been mitigated if the marketing and sales team were aligned or made to work in harmony.
Stat#2: Lower conversion rates:
A Higher conversion rate is the major goal of any marketing or sales effort. But a lower conversion rate could be the outcome when the sales and marketing teams aren’t aligned.
A study by Hubspot shows that 79% of leads never convert to sales. Why? The reason is tied to nurturing. An aligned organization may not experience such.
Barriers To Effective Sales And Marketing Alignment
Statistics on sales and marketing alignment offer a clear view of what partnering both departments can offer. Unfortunately, many organizations are yet unaligned.
Only 8% of organizations have strong alignment between their sales and marketing teams. So, what happened to the other 92%? What is the reason for their low-alignment or un-alignment?
Here is what you need to know.
Firstly, the reason is – the status quo. For a long period, sales and marketing have existed as separate departments. Both departments are like oil and water in most organizations.
Below are the barriers or reasons most companies are yet to align their sales and marketing.
Barrier #1: Conflicting Goals:
Here is one of the major stumbling blocks to a strong sales and marketing partnership.
Revenue generation and growth are every organization’s two key goals. But this doesn’t stop marketing and sales from having separate goals.
An organization’s marketing department’s goal could be lead generation. But then, does the quality of leads generated matter? Or should it matter?
Marketers are more focused on lead generation and they could set this as their goals. They consider all leads are leads. It doesn’t matter whether they are high or low-quality leads.
For sales teams, the goal is getting leads. But the priority is the quality of leads. Sales want high-quality leads so they can close deals much quicker.
This isn’t feasible in an organization where marketing and sales aren’t aligned. Rather, the outcome is likely low-quality leads, fewer closes, etc.
Marketing is satisfied when leads are generated. On the contrary, sales are satisfied when deals are closed.
Barrier #2: Conflicting expectations:
How sales and marketing view each other’s efforts is often at odds. And this has been a barrier to their alignment in most organizations.
For instance, sales are hopping on marketing to generate leads but shorten the sales cycle via qualifying leads.
On the other hand, marketing expects sales to do better and close more deals. So, you can see that both departments have contrasting views. That is why alignment is a hassle in most organizations.
Barrier #3: Unclear communication:
The only way marketing and sales alignment can be effective and produce the desired result is when both can communicate effectively. Unfortunately, this has been a major challenge.
Unclear communication is a barrier to an effective alignment of both departments. And effective communication is essential for both departments to work together and meet the expected goals.
How can the issue of communication be resolved to ensure a strong alignment?
Firstly, both departments must use the same format, tools, and other communication methods. They need communication to be effective to ensure high-value content creation in the buyer’s journey.
When communication is smooth between both departments, marketing can nurture leads and help sales close them more effectively.
Barrier #4: Ineffective ascription creates mistrust:
Trust is vital to aligning sales and marketing departments in an organization. Mistrust is created when there is ineffective attribution or attribution that lacks transparency.
For instance, marketing ascription or acknowledgment ties marketing efforts strictly to the buyer journey. Unfortunately, marketing cannot see their effort’s impact on the buying process. They only care about generating leads.
On the other hand, sales are focused on closing deals. Unfortunately, they cannot fathom marketing efforts in doing so. This misconception can create a form of tension between marketing and sales, leading to distrust.
These sales and marketing alignment statistics give a clear insight into the benefits of partnering both departments. An alignment can lead to an increase in lead generation, customer retention, sales, and revenue.
Statistics show that aligned organizations have a higher possibility of revenue growth than unaligned ones. Low or misaligned organizations in the USA lose trillions of dollars yearly too.
We also discussed the barriers to an alignment, such as conflicting goals, expectations, unclear communication, and wrong attributions. But organizations serious about aligning their sales and marketing departments can resolve these issues.