Where Does the Misalignment Stem From?Several factors contribute to the misalignment of marketing and sales:
- Marketing communicates to tens of thousands; sales focuses on relationships with individuals
- Marketing focuses on systems and statistics; a salesperson’s income depends on their ability to close a sale
- Marketing needs to understand how generic personas think of the problem they’re trying to solve; sales is solving a specific person’s problem with a product’s features
- Marketing is often evaluated against an MQL (marketing-qualified lead) quota; sales income is dependent on opportunity bookings
The Measurements That MatterWhen I asked Peter what marketing’s North Star should be, he said, “The only metric that matters is whether we are hitting the sales plan. Everybody’s job in any company, regardless of what department they’re in, but especially in marketing, is to help sales hit their number.” Marketing analysts are often tied up trying to integrate systems or merge spreadsheets to get metrics expected for quarter-end reviews. Not having fully automated reports means a lot of time is wasted looking back at what happened in the past rather than understanding what is or isn’t working today. It’s vital that marketing sets aside a budget for a strong analytics infrastructure. “The best thing that the marketing organization and marketing operations could do would be to report on the critical conversion rates because those are going to reveal organizational issues. Conversion rates reveal interdepartmental issues. When I had a strong partner in sales, we figured out that the time that elapses between a form fill and a call from sales correlates to the probability the sales would close. When we waited a day, the success rate would fall off in order of magnitude. When we got the time from form fill to 10 minutes, our conversion rate went up to 37 percent. “As an executive, I don’t want to look at every single conversion point. I want to understand which conversion points are in jeopardy and what we are doing to address them. You may discover you need to hire different people if you’re going to double next year. You may need to have a completely different content strategy. You may need to hire different salespeople. Conversion rate issues reveal so much.” But that can only happen if your systems are calibrated a certain way, your sales and marketing team agree on conversion definitions and collaborate, and your leadership team is in lock-step.
Thinking About Adding Revenue Ops? Think About Why First.Revenue operations and the CRO role are on the rise. “There’s no substitute for great leadership. And to me, revenue operations sounds like a bandaid for a leadership problem. The logic is if the sales leader and the marketing leader can’t agree on how to orchestrate a constructive handoff between marketing operations and sales operations, then the only thing to do is put them under one person who will force it. That VP of revenue operations is going to have to unite two organizations that, at that point, probably don’t like each other, probably don’t trust each other. Having operations report to the same person is just a band-aid because that same person will have to exercise the same leadership that the two individual leaders would have had to exercise to get those two independent organizations to work together. “I’m sure it can work well in organizations, but to me, the real issue is if you have a lack of leadership between marketing and sales. Combining revenue operations shouldn’t be viewed as the solution in this case. The reflex to spin up a revenue operations team is a symptom of a leadership problem.” As a technologist, I had to advocate for revenue operations. As someone who has worked in operations departments spanning marketing, sales, and customer success, I’ve experienced the chaos that can be created when teams don’t understand how the entire tech stack interacts. It’s too easy for someone to make a unilateral decision and blow up a team’s workflow up or downstream. Peter said, “I can totally see that. And I can also see there’s probably some economic efficiencies, too. You’re going to need a developer in each organization. Why not have centralized development? I can see how that could be a real source of efficiency. In my last two roles, I spent a ton of time with the sales ops people to see what we could do to make things as efficient as possible. But I also feel like creating a revenue operations organization for the sake of efficiency is the minority case. The majority tends to be that marketing and sales leadership doesn’t get along.” That’s a fair point. It also brings me to the observation that the CRO title has been award to sales VPs at small companies because those companies can’t afford both a sales and marketing executive. Marketing can be very effectively outsourced initially, and sales must have a leader in place as soon as the product meets minimum viable requirements. “Sales and marketing are naturally very different disciplines. A really good marketing organization can do an effective job without being in the same building as sales. So much of what marketing is doing is machine-driven across thousands and thousands of discreet engagements. You can roll up metrics that will tell you how all of that’s performing. People think of marketing people as being creative, conceptual artists. It’s the most data-driven, nerdy, quantitative, introverted role you can imagine. Selling requires a totally different skill set, and sales leaders have to make so many judgment calls that can’t be validated with data.” “I recently got affiliated with a fractional CMO firm out of Minneapolis called Authentic Brand. Their value proposition is pretty compelling because they can go to a small company and say, ‘You neither should nor can you afford to hire a full-time marketing executive, but you could probably use 10 hours a week and get the impact and the benefit from that.’ “You can’t not have a full-time head of sales, but, eventually, if the company grows enough, that head of sales is quickly going to be way out of his or her depth trying to scale the marketing.”
For the full episode, you can listen from this page (above), Apple Podcasts, and Stitcher (coming soon to Google and Spotify!) You can also find Peter’s blog here.