The setting: A (decent) coffee shop in any business district in any city in the world.
The players: The head of marketing, head of sales and yours truly, marketing consultant, hired by the CEO who is worried about her sales and marketing ROI.
"So what's your propose to close rate?" I ask a relaxed and somewhat smug sales manager. She sits back, hands behind her head and says "60%, higher in a good month." Her body language screams "Beat that buster!" The marketing manager is sitting next to her, you can almost hear his teeth grinding in frustration.
"Wow, that's pretty impressive" I say. "So how many meetings do your sales team need to close each deal?"
"Ah well, that all depends, doesn't it?" says the sales manager. "Oh, so how do you manage your sales resource utilisation then , how do you know you will be able to handle the demand for new meetings, or figure out if you have too many people in your team?" I say.
The sales manager is sitting forward now, her smile has faded a little. "Well we seem to have done alright so far" she replies although with less conviction than is required to be entirely convincing.
"Hmmmm, well the market is undergoing a fair amount of change right now and the new strategy you guys are following is going to change the usual metrics, right?" I say.
"I guess we'll just have to see won't we?" she replies rather frostily. Conversely, the marketing manager suddenly seems to be enjoying himself enormously.
"So what about those sales ready leads? How many conversations do you need to have with qualified prospects, to drive those meetings required to submit those proposals you need to close? "
The sales manager snorts "Sales ready? Well, that's our problem, the leads we get are hardly sales ready, most of them are just tire kickers. We send most of our time qualifying out the rubbish. What's the number? Well there's no point working that out until the quality gets better."
I turn to the marketing manager.
"Tell me a little about your lead nurturing process. How many buyers do you need to identify who have clearly expressed they have a problem that you guys can fix, so that sales can meet their revenue target?
The marketing manager shifts uneasily in his chair. "Well, we don't really look at it like that, our job is to send out our message to the market as best we can and anyone who responds gets sent to sales to follow up. Frankly it's a pretty thankless task, all that work we do to provide leads and so few get followed up properly."
The sales manager, spreads her hands wide as if to say "You see what I have to deal with?"
"And the revenue number?" I remind him.
"Ummm, well its, about $21 million, right?" He glances across at the sales manager for confirmation.
"I wish! That was last year, we got a 15% increase in our targets this year, I'm saddled with another $3m to find buddy!"
"Right" he replies, sagely nodding his head. "Well good luck with that!" he finishes brightly.
"And how many communications do you need to have in total with your buyers, to support the $24 million revenue goal that your CEO is expecting you two to deliver?"
"Oh that's not my target, that's hers" replies that marketing manager in a relieved voice.
"The number?" I say.
"Well, that's pretty hard to figure out, there are so many variables, we don't really track it like that, I couldn't really say."
Now it's my turn to nod wisely, I've got a lot to think about and include in my report back to the CEO.
OK, so I've had a little fun to make my point, but I bet many of you marketing and sales managers out there have had experiences along these lines. Misalignment between sales and marketing is a common problem, often a yawning chasm emerges between sales and marketing and many of an organisation's most valuable leads fall helplessly into the gap never to be seen again. Many firms focus on improving processes, investing in technology even coaching to solve these issues in many cases with good justification. At g2m solutions we argue that your sales and marketing teams need to understand your "Funnel Maths" for alignment to be achieved. Our partners at MathMarketing are experts in Funnel Maths, it forms a core part of their Funnel Logic™ methodology. CEO and founder Hugh MacFarlane wrote about it recently http://www.mathmarketing.com/how-to-size-for-sales-success-know-thy-funnel. Read it and learn how to build your funnel maths. Its compelling reading.
Key to an effective go to market plan is sales and marketing being aligned around the same goal. This means, to begin with the same revenue goal. Marketing and sales should have the same target. Marketing needs to feel ownership as much for the bottom of the funnel as they do the top. Sales need to own the qualified leads and commit to following them up. The funnel needs to be viewed as a single go to market funnel, a sales AND marketing Funnel, not two separate loosely linked activities. The organisation needs to understand the conversion ratios from very first initial contact, through qualified lead, to identified buyer, to propose, to close and build a marketing plan that delivers sales ready leads that are qualified and in sufficient volume to deliver the required revenue.
Then, and only then, does it make sense to build your marketing tactics and plan and understand your sales resourcing requirements. If you fail to do your maths, you risk increased ineffectiveness and expense in your go to market engine. Share your similar experiences with sales and marketing alignment.