Digitalization of the marketing and sales landscape (part 1)

For the first time in history marketing drivers of revenue can be accurately measured. The rise of digitalization will have enormous impact on the cooperation between marketing and sales. First we will take a sneak peek into the current B2B marketing and sales landscapes separately. Later we investigate the current (mis)alignment between marketing and sales.

Marketing Landscape
Marketing is under constant pressure to move their focus from being a creative, towards being a more mathematical, or better said, accountable department. Marketers  are no longer seen as a (indirect) cost center, but as a profit center. As marketers have been creative thinkers for a long time, they are now being challenged to show how marketing efforts increase revenue.

Marketing has long escaped the burden of Return on Investment (ROI). New tools have made it possible (and needed) to measure the results of marketing efforts. This is performed way more extensively and effectively than it has been the case for a long time.

Marketing has become a competition for people’s attention. The average consumer will see or hear a million marketing messages per year. That is almost 3,000 messages per day (1). No human being can pay attention to 3,000 messages every day . The average UK household receives over 224 pieces of junk mail every year. Furthermore 92% of all mails are perceived as SPAM. 70% of the public is annoyed by junk mail and 90% of the public hate telemarketers (2). Much of this has to do with the way marketers (used to) engage with consumers.

Simply pushing your product or service to a (business) consumer does not work anymore!  New marketing should be built around permission. The challenge for marketers is to persuade consumers to volunteer their attention. Consumers should be asking to learn more about a company and its products.

Sales Landscape
The sales department is under growing pressure. Sales targets increase almost every year. Tight KPI’s are set and accountability guidelines are implemented (3). Due to the internet, business customers have more information about your product than ever.  At the same time, consumers are more critical and can display their dissatisfaction more easily than ever before.

Furthermore the average sales cycle is 22% longer than five years ago. Buyers nowadays control the sales process (4). However, vice a versa social media and other online resources can increase the effectiveness of a sales call. More knowledge about the customer and its organization can be very effective in the B2B sales approach of a (potential) lead (5).

The sales professional of the new decade needs to create a more customer centric relationship with his customer. Sales sell more than just a product or a service, sales sells solutions for specific customer needs(6).

Differences between marketing and sales
In the olden days marketing generated  leads and sales sold products and services to those leads. However, the focus of marketing is clearly shifting. 95% of the B2B buying process occurs before the sales department is in the picture. Digitalization makes it possible to create a better picture of the customer and its (click) behavior. What may be even more important, is that these developments make it possible to measure the effects and eventually the exact effectiveness of marketing campaigns. 

KPI’s
Where sales departments have had clear KPI’s, objectives and account-tability for some time now, marketing is lagging behind. Marketing targets are perceived to be (much) harder to set, define and especially measure. For example, how can you measure the exact result of your marketing campaign, or how can you measure an increased market position, or how about the current brand awareness, brand recognition or more even specific the brand value?

Of course we can lead the somewhat different qualitative or quantitative KPI’s and goals of marketing and sales back to the same original and organizational set goals. Think of increased profitability, increase revenue and/or market share. However, as we will see, marketing and sales measure their successes differently and their focus or perspective differs quite dramatically.

Measurement
Success between sales and marketing KPI’s is measured differently (7). In the olden days marketing costs were perceived as indirect costs. Marketing was not held directly responsible. Marketing has mostly been seen as a (indirect) cost center instead of a profit center. But things have changed! Nowadays marketing needs to PROVE its added value and marketing will be held accountable!

Thereby marketing is generally more focused on long-term benefits with hard to measure (yearly set) success criteria. Sales is generally more focused around short-term (quarterly) results, targets and bonuses.  This is mainly due to the incentives for sales people and their results orientation. Sales people focus on month-to-month and quarter-to-quarter sales. Marketing managers concentrate on building long-term competitive advantage that might take years to realize (8).

Focus
There is also a difference in focus between marketing and sales. Exemplary of this difference, is the price driven nature of sales versus the value driven nature of marketing. Marketing and sales have a different vision of the ideal target customer. Sales people often accuse marketers of being out of touch with what customers really want or setting prices too high. Marketers insist that sales people focus too much on individual customers and short-term sales at the expense of longer-term profits (9).

Tools
Furthermore much of the cool (expensive) sales tools and CRM systems remain unused:
- Actionable customer insight sits in dozens of disconnected databases
- There is a lack of a 360-degree view of customers and their buying preferences
- The technology is too hard to use so that there is limited adoption (7)

Other differences
Due to different ways of working, culture, objectives, and KPI’s, leads can be defined quite differently. Other factors that can cause misalignment between marketing and sales are poor communication and poor coordination by management.

The wall
All of these elements inhibit marketing and sales to effectively work together. This can lead to the observation that marketing and sales act as two completely different organizations under one roof. The difference in focus and perspective causes a misalignment or a wall so to speak between marketing and sales.

However, the common interest of marketing and sales should be the same: “how to increase sales, revenue and profitability for the organization?”. The question is, how can we attain this goal and breakdown the wall? How can we ensure quality metrics to proof both marketing and sales accountability? How can marketing help sales to become more customer centric and thereby add value to the sales process? And how can we successfully transfer quality leads from marketing to sales?

This article is the first part of a series of 3 articles. Next week part 2: why should marketing and sales work together?  

Sources
(1) Fastcompany Seth Godin
(2) Eloqua Research (2011) – Marketing Transformation
(3) 2011 Sales Trends Corpmagazine.com (2011)
(4) Sirius (2009) – The Secret to Sales Nirvana
(5) Frankwatching (2011) – Sociale revolutie veranderingen in Sales en Marketing
(6) Forrester (2008) – CMO’s need marketing-sales collaboration
(7) Peppers & Rogers (2008) – Marketing & Sales The New Power Couple
(8) Journal of Personal Selling & Sales Management (2005) – Sales and marketing integration: a proposed framework
(9) Harvard business review (2006) – Ending the war between marketing and sales