This article was originally published on Sales and Marketing Management.
When sales and marketing teams are misaligned, your workplace and its workflows can seem disjointed. Goals are lost in translation. The timing is off. A win for one team is a miss for another.
But misalignment of sales and marketing is more than just a frustrating office problem; it can be costly for your business. Companies are losing more than $1 trillion each year in the gap between sales and marketing.
The main reason for this loss is key performance indicators that don’t work together. Eighty-five percent of businesses report believing that having the same goals and KPIs is key to successful sales and marketing alignment. And failure to align sales KPIs and marketing KPIs means that the whole team is working toward different goals. Without a united set of goals and metrics, strategies become blunt tools – they might work OK for a while, but they won’t achieve their potential to carve out new business or boost revenue.
I have had a front-row seat to see this problem in action. In 2019, my company, Influence & Co., was making a strategic shift. While we had been investing a lot in conferences, networking events and speaking engagements, we decided to adjust our focus toward primarily inbound and content marketing strategies. To make this shift work, we needed to craft better alignment between our marketing and sales efforts. And because our main priority was — and is — closing new business, we needed to make sure our pipeline was flush with qualified leads and that those leads were converting into customers.
To get organized and take a pulse of our efforts, we created a KPI tracker for sales and marketing.
We designed our KPI tracker to be a shared resource, bringing sales goals together with marketing goals and forming an analytical bridge between those two vital departments.
To build it, we essentially worked backward. Looking at our sales funnel, we knew that our main priority was to create new monthly recurring revenue. Then, we looked at our marketing strategy and asked ourselves whether there were marketing actions we could take that would impact our sales goal of generating new revenue. The answer was yes.
For example, we realized that we could track marketing-qualified leads (MQLs) because we know that having a healthy number of MQLs would make engaging sales calls more likely. We also track how many first sales calls we make. This KPI allows us to see how many of those MQLs are converting into sales conversations.
A third thing the KPI tracker looks at is the conversion rate from contact forms. While this may seem like a sales KPI, it tells a story for marketing, whose content and email outreach strategies are responsible for delivering contact forms and making them enticing.
As we started to align sales and marketing KPIs, we saw a rise in marketing-generated revenue – 47%, to be exact. We realized that sales KPIs and marketing KPIs are often more similar than we think. And the size and quality of our pipeline are always directly related to elements of our marketing strategy that we can have a direct impact on.
What KPIs should you focus on to achieve sales and marketing alignment?
The point of aligning KPIs between sales and marketing is to drive business growth. When you’re thinking about how to align sales and marketing, prioritize the strategies that will drive growth – by creating new revenue, cutting costs, or building credibility and loyalty.
Below are the main KPIs from the worlds of sales and marketing that we track, but keep in mind that the ones you choose will depend on your business and its current objectives.
No matter what KPIs you’re tracking, it is important that the sales and marketing teams own their individual KPIs. While alignment is the goal, unless individuals have ownership over the metrics they’re responsible for, no one will have the necessary confidence or authority to jump on trends and make changes to the strategy.
But it’s not just KPIs that your team should focus on aligning. It’s also vital to have regular meetings – in person or on video – so sales and marketing can actually check that they’re in alignment. Do they understand the other department’s language? Are they on board with the goals they’re working toward?
In these meetings, you can put a few topics on the agenda. Common sales objections, any new resources available for sales, a review of the KPIs you’re tracking, and a collective brainstorm on how to improve your chosen metrics if needed.
While the KPI tracker is a great tool for working toward alignment, it also serves as a launchpad for the work of your team. The tracker shows how various strategies are working (or not working) and then helps facilitate the team to brainstorm and find solutions as needed to make progress on your business goals. So what are you waiting for?