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Sales And Marketing War

Sales And Marketing War

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    Ending war between_sales_marketing Ending war between_sales_marketing Document Transcript

    • by Philip Kotler, Neil Rackham, andSuj Krishnaswamy6/6/2013page1ASHRAF DIAB
    • Endingthe War Between Salesand MarketingTheIdeainBrief TheIdeainPracticeIntoo many companies,Salesand Market-ing feud likeCapulets and Montagues.Salespeopleaccusemarketersof being outof touch with what customersreallywantor setting pricestoo high. Marketersinsistthat salespeople focus too myopically onindividual customers andshort-term salesat the expense of longer-term profits.Result?Poor coordinationbetweenthe twoteams—which only raisesmarket-entrycosts,lengthens salescycles,and increasescostof sales.How to get yoursalesand marketing teamsto start working together? Kotler,Rackham,and Krishnaswamy recommend crafting anew relationshipbetween them, one withthe right degreeof interconnectiontotackleyourmostpressingbusinesschallenges.For example,isyour market becomingmorecommoditizedor customized?If so,align Salesand Marketing through fre-quent,disciplinedcross-functional commu-nication and joint projects.Iscompetitionbecoming morecomplex than ever?Thenfully integrate the teams,by having themshareperformancemetricsand rewardsand embeddingmarketersdeeplyin man-agementof keyaccounts.Createtherightrelationship betweenSalesand Marketing,and you reduce interne-cine squabbling,enabling these formercombatants to boost top- and bottom-line growth, together.How interconnectedshouldyourSalesand Marketing teamsbe?Theauthors recommend deter-mining their existing relationship,then strengtheninginterconnectionif conditionswarrant.WHAT’STHECURRENTRELATIONSHIP?THERELATIONSHIPIS…IFSALESANDMARKETING…Undefined •Focusontheirown tasksandagendasunlessconflictarisesbetweenthem.•Havedevelopedindependently.•Devotemeetingsbetweenthemtoconflict resolution,notproactivecollaboration.Defined •Haverulesforpreventingdisputes.•Sharealanguageforpotentiallycontentiousareas(e.g.,defininga―lead‖).•Usemeetingstoclarifymutualexpectations.Aligned •Haveclearbutflexibleboundaries:salespeopleusemarketingterminology;marketersparticipateintransactional sales.•Engageinjoint planningandtraining.Integrated •Sharesystems,performancemetrics,andrewards.•Behaveasif they’ll―riseorfalltogether.‖6/6/2013page2ASHRAF DIAB
    • TheIdeainPractice(continued)Endingthe War Between Salesand MarketingSHOULDYOUCREATEMOREINTERCONNECTION?Strengthening Sales/Marketing interconnection isn’t always necessary.For example,if your company issmall and the teams operate indepen-dently while enjoying positive,informal relationships,don’t interfere.The table offersguidelines for companiesthat do need change.IF THECURRENTRELATIONSHIPIS...AND... THEN MOVE THERELATIONSHIP TO...BY...Undefined •Sales and Marketing havefrequent conflicts andcompete over resources.•Effort is duplicated, ortasks fall between thecracks.Defined •Creating clearrules ofengagement,includinghand-off points for importanttasks(such as lead follow-up).Defined •The market is becomingcommoditizedorcustomized.•Product life cycles areshortening.•Despiteclarifiedroles,effortsarestill duplicated or tasksneglected.Aligned •Establishing regularmeetings between Salesand Marketing to discussmajor opportunities andproblems.•Definingwho shouldbeconsulted on whichdecisions(e.g.,―Involve thebrandmanagerin $2million+ salesopportunities‖).•Creating opportunities forSales and Marketing tocollaborate—for example,planninga conferencetogetheror rotatingjobs.Aligned •The business landscape ismarked by complexityandrapid change.•Marketing has split intoupstream (strategic)anddownstream (tactical)groups.Integrated •Having downstreammarketers develop salestools, help salespeoplequalify leads, and usefeedbackfrom Sales to sellexisting offerings to newmarket segments.•Evaluatingand rewardingboth teams’performancebased on shared importantmetrics.For instance,establisha sales goal towhich both teams commit.And define key salesmetrics—such as numberof new customers andclosings—forsalespeopleand downstream marketers.6/6/2013page3ASHRAF DIAB
    • EndingtheWarBetween SalesandMarketingby Philip Kotler, Neil Rackham, andSuj KrishnaswamyIn many companies, salesforcesand marketersfeud likeCapuletsandMontagues—with disastrous results.Here’s how to get them to laydown their swords.Product designers learned years ago thatthey‟d save time and money if they consultedwith their colleagues in manufacturing ratherthan just throwing new designs over the wall.The two functions realized it wasn‟t enough tojust coexist—not when they could work to-gether to create value for the company and forcustomers. You‟d think that marketing andsales teams, whose work is also deeply inter-connected, would have discovered somethingsimilar. As a rule, though, they‟re separatefunctions within an organization, and, whenthey do work together, they don‟t always getalong. When sales are disappointing, Market-ing blames the sales force for its poor execu-tion of an otherwise brilliant rollout plan. Thesales team, in turn, claims that Marketing setsprices too high and uses too much of the bud-get, which instead should go toward hiringmore salespeople or paying the sales repshigher commissions. More broadly, sales de-partments tend to believe that marketers areout of touch with what‟s really going on withcustomers. Marketing believes the sales force6/6/2013page4ASHRAF DIAB
    • Ending the War Between Sales and MarketingPhilipKotleristheS.C.Johnson&SonDistinguishedProfessorofInternationalMarketingatNorthwesternUniversity’sKelloggSchoolofManagementinEvan-ston,Illinois.Thisishis11tharticleforHBR.NeilRackhamisavisitingprofes-sorattheUniversityofPortsmouthinEngland,theauthorofSpinSelling(McGraw-Hill,1988),andacoauthorofRethinkingtheSalesForce(McGraw-Hill,sujk@(ymawKrishnasjSu.)1999adanroundefethsi)mstinsights.coprincipalofStinsights(www.stinsights.com), aChicago-basedbusinessstrate-gyandmarketresearchfirmspecializinginsales–marketinginterface.link advertising dollars spent to actual salesmade, so Sales obviously couldn‟t see thevalue of marketing efforts. And, because thegroups were poorly coordinated, Market-ing‟s new product announcements oftencame at a time when Sales was not preparedto capitalize on them.Curious about this kind of disconnect be-tween Sales and Marketing, we conducted astudy to identify best practices that couldhelp enhance the joint performance and over-all contributions of these two functions. Weinterviewed pairs of chief marketing officersand sales vice presidents to capture their per-spectives. We looked in depth at the relation-ship between Sales and Marketing in a heavyequipment company, a materials company, afinancial services firm, a medical systems com-pany, an energy company, an insurance com-pany, two high-tech electronic products compa-nies, and an airline.Among our findings:•The marketing function takes differentforms in different companies at differentproduct life-cycle stages—all of which candeeply affect the relationship between Salesand Marketing.•The strains between Sales and Market-ing fall into two main categories: economicand cultural.•It‟s not difficult for companies to assessthe quality of the working relationship be-tween Sales and Marketing. (This article in-cludes a diagnostic tool for doing so.)•Companies can take practical steps tomove the two functions into a more produc-tive relationship, once they‟ve establishedwhere the groups are starting from.Different Roles for MarketingBefore we look closely at the relationship be-tween the two groups, we need to recognizethat the nature of the marketing function var-ies significantly from company to company.Most small businesses (and most businessesare small) don‟t establish a formal marketinggroup at all. Their marketing ideas come frommanagers, the sales force, or an advertisingagency. Such businesses equate marketingwith selling; they don‟t conceive of marketingas a broader way to position their firms.Eventually, successful small businesses add amarketing person (or persons) to help relievethe sales force of some chores. These new staffmembers conduct research to calibrate the sizeof the market, choose the best markets andchannels, and determine potential buyers‟ mo-tives and influences. They work with outsideagencies on advertising and promotions. Theydevelop collateral materials to help the salesforce attract customers and close sales. And, fi-nally, they use direct mail, telemarketing, andtrade shows to find and qualify leads for thesales force. Both Sales and Marketing see themarketing group as an adjunct to the salesforce at this stage, and the relationship be-tween the functions is usually positive.As companies become larger and moresuccessful, executives recognize that there ismore to marketing than setting the four P‟s:product, pricing, place, and promotion. Theydetermine that effective marketing calls forpeople skilled in segmentation, targeting,and positioning. Once companies hire mar-keters with those skills, Marketing becomesan independent player. It also starts to com-pete with Sales for funding. While the salesmission has not changed, the marketing mis-sion has. Disagreements arise. Each functiontakes on tasks it believes the other should bedoing but isn‟t. All too often, organizationsfind that they have a marketing function in-side Sales, and a sales function inside Mar-keting. At this stage, the salespeople wishthat the marketers would worry about fu-ture opportunities (long-term strategy) andleave the current opportunities (individualand group sales) to them.Once the marketing group tackles higher-level tasks like segmentation, it starts towork more closely with other departments,particularly Strategic Planning, Product De-velopment, Finance, and Manufacturing.The company starts to think in terms of de-veloping brands rather than products, andbrand managers become powerful players inthe organization. The marketing group is nolonger a humble ancillary to the sales de-partment. It sets its sights much higher: Themarketers believe it‟s essential to transformthe organization into a “marketing-led” com-pany. As they introduce this rhetoric, othersin the firm—including the sales group—question whether the marketers have thecompetencies, experience, and understand-ing to lead the organization.While Marketing increases its influencewithin separate business units, it rarely be-comes a major force at the corporate level.6/6/2013page5ASHRAF DIAB
    • Ending the War Between Sales and MarketingThere are exceptions: Citigroup, Coca-Cola,General Electric, IBM, and Microsoft eachhave a marketing head at the corporate level.And Marketing is more apt to drive companystrategy in major packaged-goods compa-nies such as General Mills, Kraft, and Procter& Gamble. Even then, though, during eco-nomic downturns, Marketing is more closelyquestioned—and its workforce more likely tobe cut—than Sales.Why Can’t They Just Get Along?There are two sources of friction between Salesand Marketing. One is economic,and the otheris cultural. The economic friction is generatedby the need to divide the total budget grantedby senior management to support Sales andMarketing. In fact, the sales force is apt to criti-cize how Marketing spends money on three ofthe four P‟s—pricing, promotion, and product.Take pricing. The marketing group is underpressure to achieve revenue goals and wantsthe sales force to “sell the price” as opposed to“selling through price.” The salespeople usuallyfavor lower prices because they can sell theproduct more easily and because low pricesgive them more room to negotiate. Inaddition, there are organizational tensionsaround pric- ing decisions. While Marketing isresponsible for setting suggested retail or listprices and es- tablishing promotionalpricing, Sales has the final say overtransactional pricing. When spe- cial lowpricing is required, Marketing fre- quentlyhas no input. The vice president of salesgoes directly to the CFO. This does not makethe marketing group happy.Promotion costs, too, are a source of friction.The marketing group needs to spend money togenerate customers‟ awareness of, interestin, preference for, and desire for a product.But the sales force often views the large sumsspent on promotion—particularly ontelevision ad- vertising—as a waste ofmoney. The VP of sales tends to think thatthis money would be better spent increasingthe size and quality ofthe sales force.When marketers help set the other P, theproduct being launched, salespeople oftencomplain that it lacks the features, style, orquality their customers want. That‟s be-cause the sales group‟s worldview is shapedby the needs of its individual customers.The marketing team, however, is con-cerned about releasing products whose fea-tures have broad appeal.The budget for both groups also reflectswhich department wields more power withinthe organization, a significant factor. CEOstend to favor the sales group when settingbudgets. One chief executive told us, “Whyshould I invest in more marketing when I canget better results by hiring more salespeople?”CEOs often see sales as more tangible, withmore short-run impact. The sales group‟s con-tributions to the bottom line are also easier tojudge than the marketers‟ contributions.The cultural conflict between Sales and Mar-keting is, if anything, even more entrenchedthan the economic conflict. This is true in partbecause the two functions attract differenttypes of people who spend their time in verydifferent ways. Marketers, who until recentlyhad more formal education thansalespeople, are highly analytical, dataoriented, and project focused. They‟re allabout building competitive advantage forthe future. They judge their projects‟performance with a cold eye, and they‟reruthless with a failed initiative. However, thatperformance focus doesn‟t al- ways look likeaction to their colleagues in Sales becauseit all happens behind a desk rather thanout in the field. Salespeople, incontrast, spend their time talking to existingand potential customers. They‟re skilled rela-tionship builders; they‟re not only savvy aboutcustomers‟ willingness to buy but also attunedto which product features will fly and whichwill die. They want to keep moving. They‟reused to rejection, and it doesn‟t depress them.They live for closing a sale. It‟s hardly surpris-All too often,organizationsfind thatthey have a marketingfunction inside Sales,and a sales functioninsideMarketing.HowWell Do Salesand MarketingWorkTogether?This instrument (see next page) is intendedto help you gauge how well your sales andmarketing groups are aligned and inte-grated. Ask your heads of Sales and Market-ing (as well as their staffs) to evaluate eachof the following statements on a scale of 1to 5, where 1is―strongly disagree‖ and 5 is―strongly agree.‖ Tally the numbers, anduse the scoring key to determine the kindof relationship Sales and Marketing have inyour company. The higher the score, themore integrated the relationship. (Severalcompanies have found that their salesforces and their marketing staffs have sig-nificantly different perceptions about howwell they work together—which in itself isquite interesting.)6/6/2013page6ASHRAF DIAB
    • Ending the War Between Sales and MarketingStronglyAgree5StronglyDisagree1Disagree2Neither3Agree41.Oursalesfigures are usually close to the salesforecast..2If things go wrong, or results are disappointing,neitherfunction points fingers or blamesthe other..3Marketing people often meetwith keycustomersduringthe salesprocess..4Marketing solicits participation fromSalesin drafting themarketingplan.5.Oursalespeoplebelieve the collateral suppliedbyMarketing is a valuable tool to help them get moresales..6Thesalesforce willingly cooperates in supplyingfeedbackrequested byMarketing..7Thereis agreat deal of commonlanguage here betweenSalesand Marketing..8Theheads of Salesand Marketing regularly confer aboutupstream issuessuch as idea generation, marketsensing, and product development strategy..9SalesandMarketing work closely together to definesegmentbuying behavior..10WhenSalesand Marketing meet,they donot need tospendmuchtimeon dispute resolution and crisismanagement..11Theheads of Salesand Marketing work together onbusinessplanning for products and services that willnot be launchedfor two or moreyears..12Wediscussand usecommonmetrics for determiningthe success of Salesand Marketing.13.Marketing actively participates in defining and executingthe salesstrategy for individual keyaccounts.14.Salesand Marketing manage their activities usingjointlydeveloped businessfunnels, processes,or pipelines thatspanthe businesschain –frominitial market sensingtocustomerservice.15.Marketing makesasignificant contribution to analyzingdata fromthe salesfunnel and usingthosedata toimprovethe predictabilityand effectiveness of the funnel..16Salesand Marketing shareastrong ―Weriseor falltogether‖culture..17Salesand Marketing report to asingle chief customerofficer, chief revenue officer, or equivalent C-levelexecutive..18There’s significantinterchange of peoplebetween SalesandMarketing..19Salesand Marketing jointly developand deploytrainingprograms,events, and learning opportunities for theirrespective staffs.20.SalesandMarketingactively participate inthepreparationandpresentation of each other’s plans to top executives.++++= otalTScoring20–39Undefined 60–79Aligned80–100 Integrated40–59Defined6/6/2013page7ASHRAF DIAB
    • Ending the War Between Sales and Marketinging that these two groups of people find it dif-ficult to work well together.If the organization doesn‟t align incentivescarefully, the two groups also run into con-flicts about seemingly simple things—for in-stance, which products to focus on selling.Salespeople may push products with lowermargins that satisfy quota goals, while Market-ing wants them to sell products with higherprofit margins and more promising futures.More broadly speaking, the two groups‟ per-formance is judged very differently. Salespeo-ple make a living by closing sales, full stop. It‟seasy to see who (and what) is successful—almost immediately. But the marketingbudget is devoted to programs, not people,and it takes much longer to know whether aprogram has helped to create long-term com-petitive advantage for the organization.Four Types of RelationshipsGiven the potential economic and culturalconflicts, one would expect some strains todevelop between the two groups. And, in-deed, some level of dysfunction usually doesexist, even in cases where the heads of Salesand Marketing are friendly. The sales andmarketing departments in the companies westudied exhibit four types of relationships.The relationships change as the companies‟marketing and sales functions mature—thegroups move from being unaligned (andoften conflicted) to being fully integrated(and usually conflict-free)—though we‟veseen only a few cases where the two functionsare fully integrated.Undefined. When the relationship is unde-fined, Sales and Marketing have grown inde-pendently; each is preoccupied largely with itsown tasks and agendas. Each group doesn‟tknow much about what the other is up to—until a conflict arises. Meetings between thetwo, which are ad hoc, are likely to be de-voted to conflict resolution rather than pro-active cooperation.Defined. In a defined relationship, the twogroups set up processes—and rules—to pre-vent disputes. There‟s a “good fences makegood neighbors” orientation; the marketersand salespeople know who is supposed to dowhat, and they stick to their own tasks for themost part. The groups start to build a commonlanguage in potentially contentious areas,such as “How do we define a lead?” Meetingsbecome more reflective; people raise ques-tions like “What do we expect of one another?”The groups work together on large events likecustomer conferences and trade shows.Aligned. When Sales and Marketing arealigned, clear boundaries between the two ex-ist, but they‟re flexible. The groups engage injoint planning and training. The sales groupunderstands and uses marketing terminologysuch as “value proposition” and “brand image.”Marketers confer with salespeople on impor-tant accounts. They play a role in transac-tional, or commodity, sales as well.Integrated. When Sales and Marketingare fully integrated, boundaries becomeblurred. Both groups redesign the relation-ship to share structures, systems, and re-wards. Marketing—and to a lesser degreeSales—begins to focus on strategic, forward-thinking types of tasks (market sensing, forinstance) and sometimes splits into upstreamand downstream groups. Marketers aredeeply embedded in the management of keyaccounts. The two groups develop and imple-ment shared metrics. Budgeting becomesmore flexible and less contentious. A “rise orfall together” culture develops.We designed an assessment tool that canhelp organizations gauge the relationshipbetween their sales and marketing depart-ments. (See the exhibit “How Well Do Salesand Marketing Work Together?”) We origi-nally developed this instrument to help usunderstand what we were seeing in our re-search, but the executives we were studyingquickly appropriated it for their own use.Without an objective tool of this kind, it‟svery difficult for managers to judge their cul-tures and their working environments.Moving UpOnce an organization understands the natureof the relationship between its marketingand sales groups, senior managers may wishto create a stronger alignment between thetwo. (It‟s not always necessary, however. Theexhibit “Do We Need to Be More Aligned?”can help organizations decide whether tomake a change.)Moving from undefined to defined. If thebusiness unit or company is small, membersof Sales and Marketing may enjoy good, in-formal relationships that needn‟t be dis-turbed. This is especially true if Marketing‟sMarketersjudge theirprojects’performancewith a cold eye. But thatperformance focusdoesn’t always look likeaction to their colleaguesin Sales.6/6/2013page8ASHRAF DIAB
    • Ending the War Between Sales and Marketingrole is primarily to support the sales force.However, senior managers should interveneif conflicts arise regularly. As we noted ear-lier, this generally happens because thegroups are competing for scarce resourcesand because their respective roles haven‟tbeen clearly defined. At this stage, managersneed to create clear rules of engagement, in-cluding handoff points for important taskslikefollowinguponsalesleads.Moving from defined to aligned. The de-fined state can be comfortable for both par-ties. “It may not be perfect,” one VP of salestold us,“but it‟s a whole lot better than it was.”Staying at this level won‟t work, though, ifyour industry is changing in significant ways.If the market is becoming commoditized, forexample, a traditional sales force may becomecostly. Or if the market is moving towardcustomization, the sales force will need toupgrade its skills. The heads of Sales andMarketing may want to build a more alignedrelationship and jointly add new skills. Tomove from a defined relationship to analigned one:Encourage disciplined communication.When itDoWeNeedto BeMoreAligned?The nature of relations between Sales andMarketing in your organization can run thegamut—from undefined (the groups act in-dependent of one another) to integrated(the groups share structures,systems, andrewards). Not every company will want to—or should—move from being undefined tobeing defined or from being defined tobeing aligned. The following table can helpyou decide under which circumstancesyourcompany should more tightly integrate itssales and marketing functions.Don’t make anychanges if…Tighten therelationshipbetween Salesand Marketingif…The company is small.The company has goodinformal relationships.Marketing is still a salessupport function.Conflicts are evident betweenthe two functions.There’sduplication of effortbetween the functions; ortasksare falling through thecracks.The functions compete forresources or funding.The company’sproductsand services are fairly cut-and-dried.Traditional marketing andsales roles work in thismarket.There’sno clear andcompelling reason to change.Even with careful definitionof roles, there’s duplication ofeffort between the functions;or tasksare falling throughthe cracks.The market is commoditizedand makes a traditional salesforce costly.Products aredeveloped, prototyped, orextensively customizedduring the sales process.Product life cycles are short-ening, and technology turn-over is accelerating.The company lacks a cultureof shared responsibility.Sales and Marketing reportseparately.The sales cycle is fairly short.A common processorbusiness funnel can becreated for managingand measuring revenue-generating activities.Undefined Defined Alignedmove to Defined move to Aligned move to Integrated6/6/2013page9ASHRAF DIAB
    • Ending the War Between Sales and Marketingcomes to improving relations between anytwo functions, the first step inevitably involvesimproving communication. But it‟s not as sim-ple as just increasing communication betweentwo groups. More communication is expen-sive. It eats up time, and it prolongs decisionmaking. We advocate instead for more disci-plined communication. Hold regular meetingsbetween Sales and Marketing (at least quar-terly, perhaps bimonthly or monthly). Makesure that major opportunities, as well as anyproblems, are on the agenda. Focus the discus-sions on action items that will resolve prob-lems, and perhaps even create opportunities,by the next meeting. Salespeople and market-ers need to know when and with whom theyshould communicate. Companies should de-velop systematic processes and guidelinessuch as, “You should involve the brand man-ager whenever the sales opportunity is above$2 million,” or “We will not go to print on anymarketing collateral until salespeople have re-viewed it,” or “Marketing will be invited to thetop ten critical account reviews.” Businessesalso need to establish an up-to-date, user-friendly “who to call” database. People getfrustrated—and they waste time—searchingin the wrong places for help.Create joint assignments; rotate jobs. As yourfunctions become better aligned, it‟s impor-tant to create opportunities for marketers andsalespeople to work together. This will makethem more familiar with each other‟s ways ofthinking and acting. It‟s useful for marketers,particularly brand managers and researchers,to occasionally go along on sales calls. Theyshould get involved with developing alternatesolutions for customers, early in the sales pro-cess. And they should also sit in on importantaccount-planning sessions. Salespeople, inturn, should help to develop marketing plansand should sit in on product-planning reviews.They should preview ad and sales-promotioncampaigns. They should share their deepknowledge about customers‟ purchasing hab-its. Jointly, marketers and salespeople shouldgenerate a playbook for expanding businesswith the top ten accounts in each market seg-ment. They should also plan events and con-ferences together.Appoint a liaison from Marketing to work withthe sales force. The liaison needs to be some-one both groups trust. He or she helps to re-solve conflicts and shares with each group thetacit knowledge from the other group. It‟s im-portant not to micromanage the liaison‟s ac-tivities. One of the Marketing respondents inour study described the liaison‟s role this way:“This is a person who lives with the sales force.He goes to the staff meetings, he goes to theclient meetings, and he goes to the client strat-egy meetings. He doesn‟t develop product; hecomes back and says, „Here‟s what this marketneeds. Here‟s what‟s emerging,‟ and then heworks hand in hand with the salesperson andthe key customer to develop products.”Colocate marketers and salespeople. It‟s an oldand simple truth that when people are physi-cally close, they will interact more often andare more likely to work well together. Onebank we studied located its sales and market-ing functions in an empty shopping mall:Different groups and teams within Sales andMarketing were each allocated a storefront.Particularly in the early stages of moving func-tions toward a more closely aligned relation-ship, this kind of proximity is a big advantage.Most companies, though, centralize their mar-keting function, while the members of theirsales group remain geographically dispersed.Such organizations need to work harder to fa-cilitate communication between Sales andMarketing and to create shared work.Improve sales force feedback. Marketers com-monly complain that salespeople are too busyto share their experiences, ideas, and insights.Indeed, very few salespeople have an incen-tive to spend their precious time sharing cus-tomer information with Marketing. They havequotas to reach, after all, and limited time inwhich to meet and sell to customers. To moreclosely align Sales and Marketing, senior man-agers need to ensure that the sales force‟s ex-perience can be tapped with a minimum ofdisruption. For instance, Marketing can askthe Sales VP to summarize any sales force in-sights for the month or the quarter. Or Mar-keting can design shorter informationforms, review call reports and CRM dataindepen- dently, or pay salespeople to makethemselves available to interviewers fromthe marketing group and to summarize whattheir sales col- leagues are thinking about.Moving from aligned to integrated. Mostorganizations will function well when Salesand Marketing are aligned. This is especiallytrue if the sales cycle is relatively short, thesales process is fairly straightforward, and6/6/2013page10ASHRAF DIAB
    • Ending the War Between Sales and Marketingthe company doesn‟t have a strong cultureof shared responsibility. In complicated orquickly changing situations, there are goodreasons to move Sales and Marketing into anintegrated relationship. (The exhibit “Salesand Marketing Integration Checklist” outlinesthe issues you‟ll want to think through.) Thismeans integrating such straightforward activi-ties as planning, target setting, customer as-sessment, and value-proposition development.It‟s tougher, though, to integrate the twogroups‟ processes and systems; these must bereplaced with common processes, metrics, andreward systems. Organizations need to de-velop shared databases, as well as mechanismsfor continuous improvement. Hardest of all ischanging the culture to support integration.The best examples of integration we foundwere in companies that already emphasizedshared responsibility and disciplined plan-ning; that were metrics driven; that tied re-wards to results; and that were managedthrough systems and processes. To move froman aligned relationship to an integrated one:Appoint a chief revenue (or customer) officer.The main rationale for integrating Sales andMarketing is that the two functions have acommon goal: the generation of profitableand increasing revenue. It is logical to putboth functions under one C-level executive.Companies such as Campbell‟s Soup, Coca-Cola, and FedEx have a chief revenue officer(CRO) who is responsible for planning for anddelivering the revenue needed to meet corpo-rate objectives. The CRO needs control overthe forces affecting revenue—specifically, marketing, sales, service, andpricing. This manager could also be calledthe chief cus- tomer officer (CCO), a titleused in such com- panies as Kellogg;Sears, Roebuck; and UnitedSalesandMarketingIntegrationChecklistTo achieve integration between Sales and Marketing, your company needs to focus on the following tasks.IntegrateActivitiesIntegrate Processesand SystemsEnable theCultureIntegrateOrganizational StructuresJointly involve Sales andMarketing in productplanning and in settingsales targets.Jointly involve Salesand Marketing in gener-ating value propositionsfor different marketsegments.Jointly involve Sales andMarketing in assessingcustomer needs.Jointly involve Sales andMarketing in signing offon advertising materials.Jointly involve Sales andMarketing in analyzingthe top opportunities bysegment.Implement systems totrack and manage Salesand Marketing’sjointactivities.Utilize and regularly up-date shared databases.Establish common met-rics for evaluating theoverall successof Salesand Marketing efforts.Create reward systemsto laud successful effortsby Sales and Marketing.Mandate that teamsfrom Sales and Market-ing meet periodicallyto review and improverelations.Require Sales and Mar-keting heads to attendeach other’sbudgetreviews with the CEO.Emphasize sharedresponsibility forresults between thedifferent divisions ofthe organization.Emphasize metrics.Tie rewards to results.Enforce divisions’ con-formity to systems andprocesses.Split Marketing intoupstream and down-stream teams.Hirea chief revenueofficer.6/6/2013page11ASHRAF DIAB
    • Ending the War Between Sales and MarketingAir Lines. The CCO may be more of a cus-tomer ombudsman or customer advocate insome companies; but the title can also signalan executive‟s broader responsibility for reve-nue management.Define the steps in the marketing and sales fun-nels. Sales and Marketing are responsible for asequence of activities and events (sometimescalled a funnel) that leads customers towardpurchases and, hopefully, ongoing relation-ships. Such funnels can be described from thecustomer‟s perspective or from the seller‟s per-spective. (A typical funnel based on the cus-tomer‟s decision sequence is shown in the ex-hibit “The Buying Funnel.”) Marketing isusually responsible for the first few steps—building customers‟ brand awareness andbrand preference, creating a marketing plan,and generating leads for sales. Then Sales exe-cutes the marketing plan and follows up onleads. This division of labor has merit. It is sim-ple, and it prevents Marketing from gettingtoo involved in individual sales opportunitiesat the expense of more strategic activities. Butthe handoff brings serious penalties. If thingsdo not go well, Sales can say that the plan wasweak, and Marketing can say that the sales-people did not work hard enough or smartenough. And in companies where Marketingmakes a handoff, marketers can lose touchwith active customers. Meanwhile, Sales usu-ally develops its own funnel describing the se-quence of selling tasks. Funnels of this kind—integrated into the CRM system and into salesforecasting and account-review processes—form an increasingly important backbone forsales management. Unfortunately, Marketingoften plays no role in these processes. Somecompanies in our study, however, have inte-grated Marketing into the sales funnel. Duringprospecting and qualifying, for instance, Mar-keting helps Sales to create common stan-dards for leads and opportunities. During theneeds-definition stage, Marketing helps Salesdevelop value propositions. In the solution-development phase, Marketing provides “so-lution collateral”—organized templates andcustomizing guides so salespeople can developsolutions for customers without constantlyhaving to reinvent the wheel. When custom-ers are nearing a decision, Marketing contrib-utes case study material, success stories, andsite visits to help address customers‟ concerns.And during contract negotiations, Marketingadvises the sales team on planning and pric-ing. Of course, Marketing‟s involvement in thesales funnel should be matched by Sales‟ in-volvement in the upstream, strategic decisionsTheBuyingFunnelThere’s a conventional view that Marketing should take re-sponsibility for the first four steps of the typical buying fun-nel—customer awareness, brand awareness, brand consider-ation, and brand preference. (The funnel reflects the waysthat Marketing and Sales influence customers’purchasingdecisions.) Marketing builds brand preference, creates amarketing plan, and generates leads for sales before hand-ing off execution and follow-up tasks to Sales. This division oflabor keeps Marketing focused on strategic activities andprevents the group from intruding in individual sales oppor-tunities. But if things do not go well, the blame game be-gins. Sales criticizes the plan for the brand, and Marketingaccuses Sales of not working hard enough or smart enough.The sales group is responsible for the last four steps of thefunnel—purchase intention, purchase, customer loyalty,andcustomer advocacy. Sales usually develops its own funnel forthe selling tasks that happen during the first two steps. (Theseinclude prospecting, defining needs, preparing and presentingproposals, negotiating contracts,and implementing the sale.)Apart from some lead generation in the prospecting stage,Marketing all too often plays no role in these tasks.customerawarenessbrandawarenessbrandconsiderationbrandpreferencepurchaseintentionpurchasecustomerloyaltycustomeradvocacyMARKETINGHandoffSALES6/6/2013page12ASHRAF DIAB
    • Ending the War Between Sales and Marketingthe marketing group is making. Salespeopleshould work with the marketing and R&Dstaffs as they decide how to segment the mar-ket, which products to offer to which seg-ments, and how to position those products.Split Marketing into two groups. There‟s astrong case for splitting Marketing into up-stream (strategic) and downstream (tactical)groups. Downstream marketers develop ad-vertising and promotion campaigns, collateralmaterial, case histories, and sales tools. Theyhelp salespeople develop and qualify leads.The downstream team uses market researchand feedback from the sales reps to help sellexisting products in new market segments, tocreate new messages, and to design bettersales tools. Upstream marketers engage in cus-tomer sensing. That is, they monitor the voiceof the customer and develop a long view of thecompany‟s business opportunities and threats.The upstream team shares its insights with se-nior managers and product developers—andit participates in product development.Set shared revenue targets and reward sys-tems. The integrated organization will not suc-ceed unless Sales and Marketing share respon-sibility for revenue objectives. One marketingmanager told us, “I‟m going to use whatevertools I need to make sure Sales is effective, be-cause, at the end of the day, I‟m judged on thatsales target as well.” One of the barriers toshared objectives, however, is the thorny issueof shared rewards. Salespeople historicallywork on commission, and marketers don‟t. Tosuccessfully integrate the two functions, man-agement will need to review the overall com-pensation policy.Integrate Sales and Marketing metrics.The need for common metrics becomes criti-cal as Marketing becomes more embedded inthe sales process and as Sales plays a moreactive role in Marketing. “In order to be thecustomer-intimate company we are,” saysLarry Norman, president of Financial MarketsGroup, part of the Aegon USA operating com-panies, “we need to be metrics driven andhave metrics in place that track both sales andmarketing performance.” On a macrolevel, companies like General Electric have“the number”—the sales goal to which bothSales and Marketing commit. There is noescaping the fact that, however wellintegrated Sales and Marketing are, thecompany will also want to develop metricsto measure and re-ward each group appropriately.Sales metrics are easier to define and track.Some of the most common measures are per-cent of sales quota achieved, number of newcustomers, number of sales closings, averagegross profit per customer, and sales expense tototal sales. When downstream marketers be-come embedded in the sales process—for ex-ample, as members of critical account teams—it‟s only logical to measure and reward theirperformance using sales metrics. But then howshould the company evaluate its upstreammarketers? On the basis of the accuracy oftheir product forecasting, or the number ofnew market segments they discover? The met-rics will vary according to the type of market-ing job. Senior managers need to establish dif-ferent measures for brand managers, marketresearchers, marketing information systemsmanagers, advertising managers, sales promo-tion managers, market segment managers, andproduct managers. It‟s easier to construct a setof metrics if the marketers‟ purposes and tasksare clearly outlined. Still, given that upstreammarketers are more engaged in sowing theseeds for a better future than in helping toreap the current harvest, the metrics used tojudge their performance necessarily becomesofter and more judgmental.Obviously, the difference between judgingcurrent and future outcomes makes it morecomplicated for companies to develop com-mon metrics for Sales and Marketing. Up-stream marketers in particular need to be as-sessed according to what they deliver over alonger period. Salespeople, meanwhile, are inthe business of converting potential demandinto today‟s sales. As the working relationshipbetween Sales and Marketing becomes moreinteractive and interdependent, the inte-grated organization will continue to wrestlewith this difficult, but surely not insurmount-able, problem.•••Senior managers often describe the workingrelationship between Sales and Marketing asunsatisfactory. The two functions, they say, un-dercommunicate, underperform, and over-complain. Not every company will want to—or should—upgrade from defined to alignedrelationships or from aligned to integratedrelationships. But every company can andshould improve the relationship betweenSales and Marketing. Carefully planned en-6/6/2013page13ASHRAF DIAB
    • Ending the War Between Sales and Marketinghancements will bring salespeople‟s intimateknowledge of your customers into the com-pany‟s core. These improvements will alsohelp you serve customers better now and willhelp you build better products for the future.They will help your company marrysofter, relationship-building skills withharder, ana- lytic skills. They will force yourorganization to closely consider how itrewards people andwhether those reward systems apply fairlyacross functions. Best of all, these improve-ments will boost both your top-line and bottom-line growth.6/6/2013page14ASHRAF DIAB
    • Endingthe War Between Salesand MarketingFurtherReadingA R T I C L EFocusCustomerforQuestTheby Ranjay Gulati and JamesB.OldroydHarvard Business ReviewApril 2005Product no.R0504FTheseauthors argue that companies mustdoevenmorethan integrateSalesand Marketingto successfullyanticipateandsatisfycustomers’needs.Their suggestion?Develop acustomerrelationshipmanagementsystemthat enablesall partsof your organizationto shareandinterpretcustomerinformation.To achievethislevelof integration:1)Createacompanywiderepository containing customer-transactiondatafrom variouspartsof your enterprise.Makethe customer—not account, purchase,product,or location—your fundamental unit ofdataanalysis.2)Shareinsightsfrom cus-tomer data acrossyour organization. RoyalBankof Canada(RBC)usedinput from itsanalytics,product-management,and financegroupsto identifynewfeaturesthat revivedapreviously unprofitableproduct package.3)Anticipateand shapefuturecustomerin-teractions.Useyour data to createmodelspredictingcustomerbehavior (suchasswitch-ingto anewcompetitor), thendesign interven-tionsto alterthat behavior.4)Weavecustomerfocusinto your workforce’severyday behav-ior.Give employeesthe autonomyand techni-caltoolstheyneedto makeinformed cus-tomer-focuseddecisions.Integratingall partsof your organizationsotheyfocuson the customerpaysbig dividends.RBCdiscoveredthisfirsthand:it grewdividendsfrom$.68asharein 1996to $1.75in 2003bydrivinghigh-valuecustomergrowth 20%andaveragecustomerprofitability13%.6/6/2013page15ASHRAF DIAB