6 Business Performance Metrics of Aligned Organizations

When talking about aligning Sales and Marketing, it is imperative to focus on its impact on business performance. I continue to stress the need for all of us as leaders to propagate insights from credible research to the C-suite so that leaders of the organization can make informed decisions as it relates to sales and marketing alignment strategy.  This will assist in building a strong business case for allocating resources to improving alignment.

Arguably, there are no funcitonal areas in the organization more responsible for creating revenue than sales and marketing
— Robert M. Peterson, Ph.D et al

I had the privilege of recently reading a study conducted by Northern Illinois University in conjunction with Miller Heiman (Journal of Selling - Volume 15, Number 1). The study was titled "The Upside of Sales and Marketing Alignment". In the study, they were able to uncover 6 performance metrics that resulted from sales and marketing alignment. Detailed findings from the study can be seen below in Figure 1. They share that Sales and Marketing alignment leads to the following 6 business metrics:

  • Growth in number of qualified leads
  • Increase in lead conversation rates
  • Growth in new account acquisition
  • Growth in customer retention rates
  • Growth in average account billing size (Increase in order size)
  • Revenue growth
Figure 1: Likelihood of Improved Results Among Aligned Organizations

Figure 1: Likelihood of Improved Results Among Aligned Organizations

Marketing's role in Collaboration

The study also revealed that the best approach to lead generation involves both the sales and marketing function. With so many b2b businesses struggling to generate a significant volume of quality leads, this finding is extremely important. What this means is that Marketing can not successfully do this alone and needs input from Sales to get it right. This is where having a Feedback Loop in place becomes imperative. Salespeople are in the field/on the phone every day talking with prospective customers and they are many times the first to hear what is working and what is not. The organization must use this tribal knowledge to iterate on strategy to attract new and qualified leads for the business. The study also demonstrated that Marketing must go beyond just lead generation to acquire more customers and should also strive to:

  • Enhance the quality of customer relationships
  • Increase contact density
  • Build contact authority inside the customer's organization
The marketing function in an aligned organization does not stop at lead generation for customer acquisition. Rather, when working together with the sales team, it continually strives to enhance the quality of customer relationships, increase contact density, and build contact authority insde the customer’s organization.
— Robert M. Peterson, Ph.D. et al

Why Sales doesn't value collaboration

There were also some significant findings on why Sales is resistance to sometimes working with Marketing in a collaborative way. Salespeople will always defer to activities they view as adding customer value in the attempt to close more business. If Marketing is not able to communicate how the activities they do help in creating customer value, salespeople may "harbor prejudice, disrespect, and distrust for marketers." It then is the job of management to demonstrate the value that both teams bring to each other in order to encourage them in being credible allies. This effort must include more than just interaction and must be focused on actual collaboration which would entail information sharing, mutual understanding, and a common vision. This is why I believe my three-part framework for alignment is a credible start to moving the organization toward alignment. The framework focuses on taking a System Approach to the customer, creation of Shared Goals, and establishing a formal Feedback Loop for Sales and Marketing to share business intelligence. 

Figure 2: A Sales and Marketing Alignment Framework

Figure 2: A Sales and Marketing Alignment Framework

Insight for the C-suite

I think at this point, many leaders in the organization know about the importance of aligning Sales and Marketing or at least have seen the increase in focus on this topic. What I think this study does is further help us understand the precise business metrics that are influenced by alignment. This makes having the conversation about business outcomes a bit easier. We can identify if these identified outcomes (i.e. revenue growth, increase in lead conversion rates, etc.) are important to the overall strategy of the business and then make a case for why putting more resources toward alignment is not only a necessary but imperative decision in moving the organization to where it needs to be to achieve business goals.  

Jeff Davis

The Sales + Marketing Alignment Summit, Chicago, IL