Creating Effective Sales and Marketing Relationships

Kenneth Le Meunier-Fitzhugh, Leslie Caroline Le Meunier-Fitzhugh

• Publisher: Business Expert Press
• Year: 2015
• Print ISBN: 9781606498583
• eBook ISBN: 9781606498590
• Topic: Business
• Subtopic: Sales
• Index: Business

How should corporate sales and marketing teams operate collaboratively in a 21st Century to enhance performance in the marketplace? This publication provides insights into how and why con ict and/or separation has grown up between the sales and marketing functions in many organizations, and what senior managers can do to counter this.Sales and marketing functions have the capabilities required to assist the organization to adapt to rapidly changing environments by focusing on customer needs and the activities of competitors. To gain the maximum bene ts for the organization, sales and marketing need to interact effectively and communicate both formally and informally. Creating Effective Sales and Marketing Relationships will consider the resourcing of sales and marketing, and how innovative processes can reduce conflict and promote mutual understanding.

CHAPTER 1

The Sales and Marketing Interface

Introduction

The relationship between sales and marketing personnel has presented a number of challenges for many organizations. Even organizations that have integrated sales and marketing activities have experienced tensions. Over the past few years there have been many and varied debates around this topic, but still stories continue about poor support from marketing and misuse of marketing materials by sales. However, whichever side of the debate you are on there are a number of views to consider, and no one has yet come up with the ultimate solution.

Creating Customer Value

Marketing is concerned with the process of “creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders” (American Marketing Association 2004). This definition highlights the importance of customer value to organizational success. It also confirms the central role that customer relationships play in creating sales for the organization. As salespeople are those members of the organization who most frequently communicate directly with customers, customer relationships are usually managed through this function. The division between the sales and marketing functions is therefore evident even in the 2004 definition of marketing by the American Marketing Association. Sales and marketing have different competences and are frequently structured and managed separately in larger organizations (Piercy 2006). Consequently, although sales and marketing functions have the same overall goal of creating added value for their customers, thereby generating increased sales and profit for the organization, they still have their own objectives, behaviors, and culture. Marketing is generally more concerned with longer-term strategic objectives related to communicating value, while sales is more concerned on shorter-term sales objectives that relate to meeting customer needs (Ernst, Hoyer, and Rubsaamen 2010). Both functions, however, are critical parts of the customer value chain that needs to operate in a seamless manner.

The customer value chain is a way of thinking about how an organization is able to outperform its competitors and secure sales. This value chain is based around the core business processes of marketing and how well these activities are coordinated (Hammer and Champy 1993; Porter 1980). Five core processes in the creation of customer value are directly relevant to the sales and marketing relationship.

• Market Sensing—this relates to all the activities that are in management of market information, including the collection of data, analysis to identify new insights into the market, and the dissemination of market information to all parts of the organization. Consequently, sales and marketing have to share information in an integrated fashion to provide a complete picture of the market.

• New Offering Realization—this is concerned with the research and development of new products. Sales and marketing should be involved in the concept stage as well as the implementation stage of new product development (Ernst, Hoyer, and Rubsaamen 2010), and therefore they will need to communicate together on market changes and customer needs.

• Customer Acquisition—this is a key area in which sales and marketing are required to interact and cooperate. Customer acquisition relates to targeting and engaging new customers and understanding their needs, which cannot be achieved individually.

• Customer-Relationship Management—the customer-relationship process has developed and increased in importance over the past few years, as customer needs have become more complex and customer retention has become more difficult (Piercy, Cravens, and Lane 2007). While sales have traditionally been responsible for customer relationships, the development of the Internet has meant that there is more direct contact between the customer and marketing. Effective customer relationships are therefore requiring greater internal communication and interaction than previously was required.

• Fulfillment Management—this refers to the process that fulfills the customer’s needs that is, receiving orders, shipping items, and collecting payment. Although this does not directly relate to the sales and marketing relationship, it does require the information on customer requirements to be effectively communicated to the supply chain.

The result of reviewing the effects of the sales and marketing interface on these key processes in the customer value chain highlights why this interface has gain so much recent management attention. Cross-functional sales and marketing cooperation is essential to delivering excellence in the customer-relationship management that leads to customer satisfaction (Guenzi and Troilo 2007). As market places become more competitive, organizations are increasingly reliant on the sales from fewer customers (Capon 2011). Consequently, deep insights into these customers’ needs at both domestic and global levels are required for success. Focusing on offering superior customer value and quality customer relationships through integrated sales and marketing functions will assist the organization to grow and create competitive advantage.

Operation of the Sales and Marketing Interface

So what are the problems with the sales and marketing interface? Friction between sales and marketing has been generated over time and can be caused by a number of factors including:—the allocation of resources and how these resources are used, conflicting goals set by senior management, misunderstanding of each roles and the lack of high quality interaction. On the whole marketing personnel and sales personnel have good personal working relationships, but it is the demand of their roles and how these roles interrelate, which are causing difficulties and impacting on customer value. A disconnect between sales and marketing functions that has been observed in many organizations, in both business-to-consumer (B2C) and business-to-business (B2B) organizations. Marketing efforts are usually directed at supporting sales in finding new customers, but there are a lot of lost and dormant leads in most organizations. The Aberdeen Group (2002, 1) found that

“As much as 80% of marketing expenditure on lead generation and sales collateral are wasted—ignored as irrelevant and unhelpful by sales.”

There are many examples of this lack of collaboration between sales and marketing. One example from our own experience is of a marketing department producing materials specifically for a new product launch. Although this material was produced in full consultation with marketing teams from each territory, the sales teams were not fully engaged with the process. In some territories the sales terms felt that the specifications were not presented correctly, in others the data sheets provided were insufficient, and in some the materials produced were not suitable at all. The marketing departments from each territory had apparently not met/considered the opinions of their sales teams during the consultation. Developing marketing materials that include both sales and marketing perspectives is just a small example of how sales and marketing should work together as salespeople have insights into customers’ needs and activities of competitors that were not always being integrated into marketing’s thinking, and marketing have an overview of the market and brand values that are not always being shared with sales (see Diagram 1).

Diagram 1 Sales and Marketing Alignment

Observing this disconnect has led to nearly 12 years of personal research into how to optimize sales and marketing operations across organizations, markets, country boundaries, and cultures. The topic continues to present challenges, as it is very hard to achieve sales and marketing collaboration overnight. This has to do with differences that exist between the two groups in function, objectives, strategies, history, and skill sets. Additionally, there are a number of conditions that exist, which need to be identified before discussing the sales and marketing interface any further.

1. Goal setting by senior management. It has been frequently found that sales and marketing have different time horizons. Sales usually have shorter-term targets, often based around monthly and quarterly quotas. Recording the number of calls made and number of presentations given may be measures of achievement and can be used in addition to actual sales achieved. Sales staff may also be rewarded on a commission based on actual sales, rather than for business development. On the other hand marketing often have longer-term goals regarding brand value, leads generated, and market visibility. Marketing personnel are usually rewarded through salaries and bonuses based on business success, rather than achieving specific sales targets. More recently organizations have been moving toward measuring marketing activities in terms of return on investment and sales success.

2. The background of sales and marketing personnel have traditionally differed as, to date, there has been a disparity in their training. Marketing personnel are often graduates of bespoke marketing courses from leading schools and universities around the world. Whereas, sales personnel, although graduates, often received their sales training whilst in post. This is slowly changing with specialist graduate courses in sales being developed, but there are still very few of these outside the U.S. It could be argued that the differences in education and training of sales and marketing personnel develops two different skill sets that are designed to meet the demands of their roles, but this may also create very different perspectives between the two groups. This difference may be exacerbated by the appointment of sales managers from the ranks of the sales team, often the best sales person, (see Sales Managers, Marketing’s best example of the Peter Principle, Anderson, Dubinsky, and Mehta 1999) rather than someone with more general managerial experience.

3. Lead generation and handover have always been thorny subjects between sales and marketing. The famous film “Glengarry, Glen Ross” (1992) has epitomized the relationship between sales leads and sales success (not necessarily in a good way, but one that has forever linked sales success to good lead generation). With the development of sales automation there seems to be an even bigger move toward the principle role of marketing as the lead generator, which they then hand on to sales. Where this falls down is that sales leads may not be qualified prior to handover, and salespeople feel that they spend a great deal of time chasing leads that are unproductive or nonexistent. This creates confrontation between sales and marketing staff, and sales feel that the only solution is to generate their own leads, as marketing does not understand their needs and requirements of the job.

4. Structure and location of sales and marketing personnel may also be a significant factor in the relationship between the two groups. Sales personnel are usually field based, with little time to spend in the office. This creates two issues, a) “out of sight is out of mind,” and b) “we never know what our salespeople are doing.” This can lead to more and more control mechanisms being employed to measure and motivate sales activities. Conversely, marketing staff are frequently office based, sometimes centrally based, and are therefore more likely to be included in management discussions and decision making. These location realities may contribute to the problem of creating meaningful communication and dialogue between sales and marketing staff.

The first critical step to improving the sales and marketing interface is to create an environment that allows collaboration and alignment across sales and marketing activities. To achieve this it is necessary to identify the role and focus of sales and marketing activities. Simply put, marketing’s role is to create attention for the organization’s offers in the market place and to create a landscape where sales can achieve their objectives. The sales role is to create links to customers so that they can meet their needs with the sales offer. Although they have different imperatives, we will argue that success is dependent on collaborating for mutual benefit.

Collaboration Versus Integration

Over the past few years there have been a number of calls for the integration of sales and marketing activities. We argue that “integration” would imply the bringing together of sales and marketing activities into a single department. For many organizations this would be impractical, if not impossible, due to the size of sales and marketing teams and the diverse nature of the organization. The term collaboration has been described as working together, indicating the need to build understanding between two different entities or groups. Collaboration has also been defined as creating collective goals, mutual understanding, sharing resources and creating an esprit de corps, which would all impact positively on business outcomes (Kahn 1996; Le Meunier-FitzHugh and Piercy 2007). Collaboration should lead to an efficient use of resources. Another term that has been growing in importance when addressing the sales and marketing interface is alignment. Alignment is concerned with the linear or orderly arrangement of processes (or items) so that there is a logical flow. Alignment is also about the correct positioning of something for efficient performance. Consequently, alignment embodies the concept of bringing something together in the most beneficial manner to achieve an objective. The use of the terms integration, alignment, and collaboration have been relatively interchangeable when talking about the sales and marketing interface, but we would suggest that collaboration, rather than alignment or integration, is the most appropriate term, because we feel that collaboration includes alignment, with the addition of cooperation, joint planning, and mutual support without the physical union that is so difficult to achieve with the diverse activities of these two functions. However, we should note that collaboration could not be entirely achieved without some physical interaction so that activities can be aligned to achieve common goals (see Diagram 2).

Diagram 2 Creating Collaboration between Sales and Marketing

Consequently to the question—should you amalgamate sales and marketing into a single department? The answer is not necessarily. What is required are the processes and structures that support collaboration between sales and marketing departments to improve effectiveness in creating greater customer value and increasing sales.

The Changing Role of Sales

Sales have probably seen more changes in the last 10 years than they have done in the previous 50 years. They are operating in a more challenging environment than ever before. Sales practices are being forced to change and are moving away from a tactical focus to a more strategic one. Although traditionally sales personnel have focused on pushing products and services into the market (Moncrief and Marshall 2005; Weitz and Bradford 1999), the increasing complexity of the sales environment requires the salespeople to become more flexible and sensitive to the needs of their customers (Tuli, Kohli, and Bharadwaj 2007). The power has shifted from the seller to the buyer and the focus has moved from the product alone to a combination of both product and service. Managing customer expectations and building relationships is being driven by a concentration of buye...

Table of contents

• Cover
• Half Title Page
• Title Page
• Copyright Page
• Contents
• Introduction
• Chapter 1 The Sales and Marketing Interface
• Chapter 2 Crises in Working Relationships between Sales and Marketing
• Chapter 3 Alignment and Effective Working Relationships in Lead Generation
• Chapter 4 How Should Sales and Marketing Communicate?
• Chapter 5 The Role of Sales and Marketing in Customer Relationships
• Chapter 6 Managing the Sales and Marketing Interface
• Chapter 7 Optimizing the Sales and Marketing Interface
• References
• Index