Sales Management e-newsletter

New Technology Unites Sales and Marketing
Heather Baldwin
If Sales says, "potato" and Marketing says, "Po-tah-to," should they just call the whole thing off? No way, say the folks at Marketo, a San Mateo, CA-based company that helps sales and marketing organizations work together to drive revenue. Marketo just announced an on-demand software solution called Lead Insight for Sales that helps companies' sales and marketing departments work collaboratively to identify and interact with the best sales leads.

The solution aims to solve a pervasive and expensive problem. Marketo estimates the sales-marketing chasm costs B2B companies $1 trillion a year in lost revenue. Its calculation assumes companies can attain at least 5 percent better revenue by solving sales-marketing alignment issues. Solving these issues will have an enormous impact on the cost side, as well. Customer feedback to Marketo indicates that 80 percent of marketing leads are not properly followed up by sales, effectively wasting those marketing dollars. With worldwide B2B marketing spending at about $1.6 trillion, the sales-marketing disconnect is roughly a $1.26 trillion problem on the cost side.

"When sales and marketing teams coordinate their activities as part of a unified revenue process, companies get better at properly identifying and prioritizing opportunities, and better quality leads result in easier and better quality sales cycles, with more wins and ultimately more revenue," explains Jon Miller, VP marketing for Marketo.

The problem, of course, is that sales-marketing alignment is easier said than done. And even when it's done, companies often go about it all wrong, focusing on what Miller calls "point initiatives" such as common lead definitions and better communication. Certainly, these areas are important but they don't get to the heart of the issue, says Miller. "Sales and marketing need to throw out old notions of marketing leads and sales cycles and departmental boundaries," he argues, "and focus instead on integrating marketing and sales as dual drivers of revenue."

Miller advocates shifting from sales cycles to revenue cycles, which start from the moment a prospect enters your system, continues through the sale, then goes beyond it to the customer relationship. In contrast to the short-horizon view of revenue that a sales cycle provides, a revenue cycle provides a complete picture of the revenue process, ensuring leads are properly nurtured and do not fall through the cracks. The key, says Miller, is to realize that sales and marketing bring different strengths to the process: "Marketing brings a long-term view, sales brings an action-oriented view," he says. "Marketing is good at one-to-many communications, automated processes and dealing with lots of data. Sales is good at building personal relationships and leveraging the human touch." Both are important; the key is to coordinate the activities at every step of the revenue cycle.

For instance, take the handoff of leads between sales and marketing. Traditionally, this has been a linear function with marketing nurturing leads to a certain point then handing them over to sales. Using Marketo Lead Insight for Sales, there's no official "handoff" of leads, rather, both sales and marketing are engaged with the lead throughout the entire revenue cycle. Primary ownership of the lead may shift, but marketing messages can come on behalf of the sales rep, and marketing campaigns can continue to support the sales process once sales does engage. Using Microsoft Outlook or salesforce.com, field and inside sales reps can send e-mail campaigns, track how prospects respond to marketing and sales communications and get instant alerts when prospects open e-mails, visit a website or show key buying signs. Marketo tracks all online and offline interactions with the prospect, measuring the prospect's interests and engagement with the company, which lets sales and marketing collaborate to determine what level of engagement merits more active involvement from sales. If it turns out a buyer is not ready, the rep can recycle the lead, automatically adding them to a marketing campaign that continues to nurture that lead. The process ensures reps aren't wasting their time on unqualified leads and prospects aren't being burdened with unwanted sales calls.

It works. Portrait company Picateers saw "immediate results" when it aligned its sales and marketing efforts using Marketo. "Almost instantly, we had well coordinated and transparent handoffs between marketing and sales," says Erik Stenson, Picateers' vice president of sales. "So much so that for the first time, we felt we could operate as a single unit." His sales reps, he adds, can now see marketing's lead management activities and the "entire history of the relationship with the (continued on page 2)
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