Fixing The Marketing-Sales Disconnect
Here's how software vendors can prevent costs, resources, time, and opportunities from being consumed by the "B-to-B Black Hole."
By Bob Schmonsees
Apr. 04, 2005
There's a marketing and sales effectiveness and execution crisis facing software companies. Costs are often growing faster than revenues and many CMOs and CSOs are now facing some hard realities. Sales people are missing their quotas. New product launches fail to meet expectations. And as much as 90 percent of sales opportunities don't close as forecasted.
Of course, these statistics are primarily driven by reduced business investment, tougher buyers, more competition, constant change, and increasing complexity. Unfortunately however, for many companies, they are also exacerbated by a disconnect between their marketing and sales organizations that makes them miss opportunities and consumes costs, time, and resources the same way that matter, light, and energy are sucked into a black hole in space.
Understanding the Disconnect
In interviewed the executives of more than 250 companies to find out how the gap between marketing and sales was impacting their organizations and what they were doing to improve marketing and sales effectiveness. I discovered that the misalignment problem was a lot bigger than I had first envisioned. Unfortunately a lot of marketing and sales organizations have become increasingly disconnected in the recent past. This misalignment has injected considerable waste and inefficiency into their go-to-market models. The result is that in far too many companies, viable revenue opportunities are routinely lost, and a significant amount of costs, time, and resources are consumed by a phenomenon I call the "B-to-B Black Hole", where:
The primary processes that drive the generation of revenue are the marketing process, the selling process, and the buying process. Unfortunately, in a lot of companies these three processes are not integrated or aligned with each other. My research uncovered the following:
• 58% of companies have not formally defined the steps of their selling process.
• 80% of those companies that have defined their sales process have not aligned that process with the customer's buying activities.
• 75% of companies still do not have an effective process for dispersing and managing leads. Most of those that do, have not integrated that process with their sales force's opportunity management system.
• 85% of companies do not have an integrated marketing and sales prioritization and planning process.
In far too many companies, the branding and positioning activities are in conflict with the lead generation strategy, and both of these are inconsistent with what sales and sales support people are telling their prospects and customers. Marketing and sales rarely speak with a single voice, and this causes a lot of wasted motion that often confuses prospects, customers, and partners, not to mention the sales people.
Closing the Gap
So how do CEOs, CSOs and CMOs start to create a synchronized marketing and sales ecosystem? The first thing they need to do is admit that there is a problem. They then need to invest time and energy to better understand the scope of the disconnect in light of their company's unique culture, business model, and infrastructure. Once they have done this they need to re-look at their organizational strategy and their key marketing and selling processes through the lens of increased alignment.
Usually the simplest changes to make are organizational, and they can involve structure, resource allocation, and compensation, all of which can help increase alignment. But, I contend that it's the adoption of two new strategic process models, built around a more concentrated focus on the customer, that will eliminate the disconnect once and lay the foundation for a synchronized marketing and sales ecosystem.
These simple alignment centric process models are based upon two fundamental truths, which unfortunately are often easy to forget in the heat of battle.
• The way a company markets and sells its solutions must be subservient to the way their customers buy.
• In order to effectively sell solutions, marketing and sales organizations must institutionalize a more detailed understanding of the customer's business needs as well as the implications of those needs on the individual stakeholders they market and sell to.
The Buyer Centric Revenue Model
The Buyer Centric Revenue Model, requires companies to redesign their marketing and selling process from the outside-in. Unfortunately, some of the solutions-centric selling methodologies that many companies have implemented were designed from the inside-out to try to help sale people manipulate the customer into buying the way the training company wanted those sales people to sell. As a result, some of these methodologies became pretty complex, which didn't hurt the training revenue, but made them almost impossible to systematize in a CRM system. The second problem was that some of these training companies were so focused on maximizing sales training days that they ignored their customer's marketing teams and never brought them into the process.
As a result, a lot of marketing organizations never learned how to support the solution selling process, there was little reinforcement of the methodology after the training, and most of the opportunity management processes that were actually implemented in CRM systems failed to reflect the steps that customers had to go through to buy something. Correcting this situation will require companies to simplify their selling methodology, and implement a more integrated and customer centric marketing and sales process model that is based upon two best practices:
• Using a technique called "Process Synchronization" to create a single, integrated marketing and selling process that is designed around, and aligned with, the steps that customers actually go through to buy things.
• Managing the key marketing and selling activities in the lead tracking, opportunity management, and pipeline reporting modules of a CRM system as a single collaborative process.
The Value Centric Communication Model
The second process model, called the Value Centric Communication Model, enables managers to implement a more integrated and customer-value centric content and communications process and create a single consistent view of a company's knowledge and content assets.
Traditionally, most companies have approached knowledge and content management from the perspective of a librarian. As such, their focus has been on answering the question, "How do I organize and control all this stuff so people can find it?" While organization, administration, access, and control are certainly important, this new integrated model also focuses on continually improving the quality and effectiveness of the intellectual assets so as to reduce both the total amount and cost of content, while maximizing business results.
There are several keys to implementing this integrated knowledge, content, and communications model.
• Formally documenting the facts, ideas, and insights that comprise the DNA of a company's many value propositions through a best practice called "Value Mapping."
• Managing and leveraging that raw DNA knowledge in much the same way a manufacturing organization manages its raw materials inventory.
• Using the Value Map to drive the development of all sales training materials and customer-facing content to insure that they are relevant and consistent.
• Continually improving both the customer-centricity and the quality of these intellectual assets, as well as the way those assets are delivered, so that the learning and knowledge-transfer experience is significantly improved.
• Aggressively exploiting the Internet as a primary communications platform for both the marketing and sales organizations.
The break through idea in this new process model is that, unlike traditional content management strategies, it is concerned about systematically managing both the underlying knowledge (raw materials) as well as the sanctioned content (finished goods). Managing marketing and sales content without this two-tier architecture is like building a product without any quality control on the component parts. We wouldn't tolerate this in our manufacturing organization, so why should marketing and sales be any different?
The Time to Act Is Now
While there are signs that the economy is improving, most technology companies may never again see the kind of growth in business investment experienced during the 1990s. Since increasing alignment helps in both good times and bad, the only strategy that makes sense is for CEOs, CSOs and CMOs to aggressively align their marketing and sales organizations around what the customer really values, as well as the way they buy things. To achieve this they need to embrace new ideas and execution models that help marketing and sales professionals become truly customer focused and improve the quality, execution, and impact of the materials they create and the activities they perform on a daily basis.
Bob Schmonsees helps companies create world-class marketing and sales engines, so the way they go to market becomes a sustainable competitive advantage. His new book Escaping The Black Hole is being published this May by Thompson Publishing and The American Marketing Association. It can it be ordered at Amazon.com or at Bob's website. Email Bob at bobs@web2one.com.
Of course, these statistics are primarily driven by reduced business investment, tougher buyers, more competition, constant change, and increasing complexity. Unfortunately however, for many companies, they are also exacerbated by a disconnect between their marketing and sales organizations that makes them miss opportunities and consumes costs, time, and resources the same way that matter, light, and energy are sucked into a black hole in space.
Understanding the Disconnect
In interviewed the executives of more than 250 companies to find out how the gap between marketing and sales was impacting their organizations and what they were doing to improve marketing and sales effectiveness. I discovered that the misalignment problem was a lot bigger than I had first envisioned. Unfortunately a lot of marketing and sales organizations have become increasingly disconnected in the recent past. This misalignment has injected considerable waste and inefficiency into their go-to-market models. The result is that in far too many companies, viable revenue opportunities are routinely lost, and a significant amount of costs, time, and resources are consumed by a phenomenon I call the "B-to-B Black Hole", where:
The primary processes that drive the generation of revenue are the marketing process, the selling process, and the buying process. Unfortunately, in a lot of companies these three processes are not integrated or aligned with each other. My research uncovered the following:
• 58% of companies have not formally defined the steps of their selling process.
• 80% of those companies that have defined their sales process have not aligned that process with the customer's buying activities.
• 75% of companies still do not have an effective process for dispersing and managing leads. Most of those that do, have not integrated that process with their sales force's opportunity management system.
• 85% of companies do not have an integrated marketing and sales prioritization and planning process.
In far too many companies, the branding and positioning activities are in conflict with the lead generation strategy, and both of these are inconsistent with what sales and sales support people are telling their prospects and customers. Marketing and sales rarely speak with a single voice, and this causes a lot of wasted motion that often confuses prospects, customers, and partners, not to mention the sales people.
Closing the Gap
So how do CEOs, CSOs and CMOs start to create a synchronized marketing and sales ecosystem? The first thing they need to do is admit that there is a problem. They then need to invest time and energy to better understand the scope of the disconnect in light of their company's unique culture, business model, and infrastructure. Once they have done this they need to re-look at their organizational strategy and their key marketing and selling processes through the lens of increased alignment.
Usually the simplest changes to make are organizational, and they can involve structure, resource allocation, and compensation, all of which can help increase alignment. But, I contend that it's the adoption of two new strategic process models, built around a more concentrated focus on the customer, that will eliminate the disconnect once and lay the foundation for a synchronized marketing and sales ecosystem.
These simple alignment centric process models are based upon two fundamental truths, which unfortunately are often easy to forget in the heat of battle.
• The way a company markets and sells its solutions must be subservient to the way their customers buy.
• In order to effectively sell solutions, marketing and sales organizations must institutionalize a more detailed understanding of the customer's business needs as well as the implications of those needs on the individual stakeholders they market and sell to.
The Buyer Centric Revenue Model
The Buyer Centric Revenue Model, requires companies to redesign their marketing and selling process from the outside-in. Unfortunately, some of the solutions-centric selling methodologies that many companies have implemented were designed from the inside-out to try to help sale people manipulate the customer into buying the way the training company wanted those sales people to sell. As a result, some of these methodologies became pretty complex, which didn't hurt the training revenue, but made them almost impossible to systematize in a CRM system. The second problem was that some of these training companies were so focused on maximizing sales training days that they ignored their customer's marketing teams and never brought them into the process.
As a result, a lot of marketing organizations never learned how to support the solution selling process, there was little reinforcement of the methodology after the training, and most of the opportunity management processes that were actually implemented in CRM systems failed to reflect the steps that customers had to go through to buy something. Correcting this situation will require companies to simplify their selling methodology, and implement a more integrated and customer centric marketing and sales process model that is based upon two best practices:
• Using a technique called "Process Synchronization" to create a single, integrated marketing and selling process that is designed around, and aligned with, the steps that customers actually go through to buy things.
• Managing the key marketing and selling activities in the lead tracking, opportunity management, and pipeline reporting modules of a CRM system as a single collaborative process.
The Value Centric Communication Model
The second process model, called the Value Centric Communication Model, enables managers to implement a more integrated and customer-value centric content and communications process and create a single consistent view of a company's knowledge and content assets.
Traditionally, most companies have approached knowledge and content management from the perspective of a librarian. As such, their focus has been on answering the question, "How do I organize and control all this stuff so people can find it?" While organization, administration, access, and control are certainly important, this new integrated model also focuses on continually improving the quality and effectiveness of the intellectual assets so as to reduce both the total amount and cost of content, while maximizing business results.
There are several keys to implementing this integrated knowledge, content, and communications model.
• Formally documenting the facts, ideas, and insights that comprise the DNA of a company's many value propositions through a best practice called "Value Mapping."
• Managing and leveraging that raw DNA knowledge in much the same way a manufacturing organization manages its raw materials inventory.
• Using the Value Map to drive the development of all sales training materials and customer-facing content to insure that they are relevant and consistent.
• Continually improving both the customer-centricity and the quality of these intellectual assets, as well as the way those assets are delivered, so that the learning and knowledge-transfer experience is significantly improved.
• Aggressively exploiting the Internet as a primary communications platform for both the marketing and sales organizations.
The break through idea in this new process model is that, unlike traditional content management strategies, it is concerned about systematically managing both the underlying knowledge (raw materials) as well as the sanctioned content (finished goods). Managing marketing and sales content without this two-tier architecture is like building a product without any quality control on the component parts. We wouldn't tolerate this in our manufacturing organization, so why should marketing and sales be any different?
The Time to Act Is Now
While there are signs that the economy is improving, most technology companies may never again see the kind of growth in business investment experienced during the 1990s. Since increasing alignment helps in both good times and bad, the only strategy that makes sense is for CEOs, CSOs and CMOs to aggressively align their marketing and sales organizations around what the customer really values, as well as the way they buy things. To achieve this they need to embrace new ideas and execution models that help marketing and sales professionals become truly customer focused and improve the quality, execution, and impact of the materials they create and the activities they perform on a daily basis.
Bob Schmonsees helps companies create world-class marketing and sales engines, so the way they go to market becomes a sustainable competitive advantage. His new book Escaping The Black Hole is being published this May by Thompson Publishing and The American Marketing Association. It can it be ordered at Amazon.com or at Bob's website. Email Bob at bobs@web2one.com.
