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The Importance of Aligning Sales and Marketing KPIs

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When sales are low or falling, the "shift-the-blame" game starts. Sales will complain Marketing isn't generating enough quality leads, and conversely, Marketing will complain that Sales aren't working hard enough to convert their provided leads into a sale. In most cases, the root cause comes down to a misalignment between Sales and Marketing.

If both teams are not working the same angles, customers can become confused and hesitant to follow through with a purchase. This is important to recognise, since a recent Aberdeen report approximated that "the average buyer controls 64 percent of the power dynamic with a vendor."

Additionally, the Aberdeen report states that "73% of Best-In-Class organisations actively provide relevant value propositions well aligned to buyers' business challenges across their marketing and sales efforts."

Clearly, alignment is of major importance, not just for the customer experience, but for overall success.

Aligning Sales and Marketing Key Performance Indicators

In many companies, the KPIs for the Marketing and Sales teams are totally separate, and so there is little incentive for the teams to work together.

Without any correlation in their KPIs, both teams are climbing separate mountains, at times doubling the overall effort for the same results. It's clear that joining forces in a collaborative manner would allow them to more effectively achieve their goals.

To fully reap the benefits of Marketing and Sales synergy, any attempt at an integrated approach must be backed up by concrete structures, and that includes the integration of Marketing and Sales KPIs, such as revenue, quotas, leads and conversion rates.

The process of integrating Marketing and Sales KPIs can also be a golden opportunity to re-align them with the organisation's overarching objectives.

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How Cisco integrated their sales and markketing

Perhaps the most significant impact companies see after aligning KPIs within Marketing and Sales is a significant increase in qualified leads that Marketing sends to Sales.

As Cisco’s CMO Karen Walker has said, "Marketing was the last function to be industrialised and the first function to be digitised."

Recognising the shift in power from sellers to buyers, Marketers at Cisco started moving away from outbound tactics like tradeshows, live events, and email campaigns that Sales was used to.

"We started using digital tactics that matched the buyers' desire to look for information online using search engines, vendor websites, and social media sites. But neither Sales nor Marketing was happy," Walker said.

So Cisco turned to Smarketing (sometimes also known as Revenue Marketing) to restore cohesiveness in the Marketing Sales process.

According to Walker, Cisco aligned their their sales and marketing KPIs by firstyly getting both teams to learn to "speak the same language" in terms of marketing and sales goals.

Then, "once you're on the same page, tune your operational systems to give visibility into results – and refine your processes continually. At Cisco, Sales and Marketing use common reporting dashboards and hold each other accountable. Both teams listen and respond to feedback."

Working from the same data

Ultimately, success is measured and monetised by an accelerated customer pipeline, while utilising fewer resources. So having each team’s KPIs work in tandem toward the same goal will only strength the business’ momentum and increase the likelihood of obtaining it.

Practically, this means extending the Sales Funnel to include Marketing so that both teams are working from the same set of data. The Aberdeen Report notes that "organisations with strong marketing and sales alignment average a 76% higher contribution to revenue from marketing (30% vs.17%)"

Even more striking is the long-term effect on ROI this alignment has with a demonstrated "organisation wide quota attainment at a 97% higher rate YOY compared to All Other (8.36% vs 4.25%). . . Company revenue grew at a 64% greater rate (11.35% vs 6.93%) and profit margins by a 24% greater rate (4.91% vs 3.95%)".

Simply put, organisations with strong marketing and sales alignment are just plain better at improving key business performance metrics.

Are you ready to learn more about Smarketing and utilising it in your company today?  We suggest reading the eBook titled “Joining Forces: How To Combine Marketing and Sales to Strengthen Business Strategy”.