There's an old saying in geometry circles: every square is a rectangle, but not every rectangle is a square. It's true; all squares have the basic elements of a rectangle: four sides, four right angles. To be a square, though, all four sides must be of equal length; a rectangle only cares about equal length on its parallel sides.
What does this have to do with sales and marketing? All sales is marketing, but not all marketing is sales. When the two sides realize this point, it changes the fundamental nature of how sales and marketing work in a business.
In a B2B world, marketing effectively lays the groundwork for sales. It generates new leads into the system and works to establish the best conditions for sales to engage.
Sales, meanwhile, delivers the decisive step in the overall revenue generation process. Sales relates the company’s value proposition to the prospective buyers, handles objections, demonstrates the economic benefit and ultimately makes the final arrangements for the delivery of a product or service.
The two functions are inextricably linked, and yet are separate and distinct. Marketing's failures are a direct handicap to sales, while sales' failures make marketing's efforts a poor allocation of time and resources.
What is Sales’ Contribution? What is Marketing’s Contribution?
Some sales seem to occur without the marketing team having made a single contribution. It can be said for instance that in general a deal that was sourced and closed by an account executive without any involvement of the marketing team, can be attributed to Sales.
Conversely, certain deals are signed when the majority of the value was created by the marketing team. A highly qualified opportunity can require very little effort from sales to close.
In this light, marketing contribution is the incremental revenue generated by marketing activities. It can be measured intuitively: what would total sales had been had there been no marketing activity at all?
Sales contribution, is the exact opposite: what would sales have been had there been no sales activity?
By recognizing these two sources of contribution, marketing and sales, business leaders can better understand the factors that make up a good utilization of marketing resources and the sales activities that lead to the highest revenue.
Marketing should effectively tell the sales force where, how and when a lead needs to be worked on so it has the best chance of success. This includes determining lead/product fit but also the interest level and the revenue potential of those leads. Marketing is effectively the gauge by which sales effectiveness is measured; if the leads are all poor quality, there's a problem in lead generation, and the process needs to be revamped. If leads and opportunities are all of high quality and bookings are not growing, there’s a sales problem and the relevant processes, skills and activities need to be re-examined.
So, How Can AI Help?
With AI, sales leaders can have a 360-degree view of their entire revenue generation process and see the exact value created by lead generation, prospecting and sales activities.
From a lead perspective, AI can provide insight into several key attributes such as:
● The quality of a given lead, based on hundreds of different factors
● The precise dollar value of a lead, as opposed to a historical average
● The expected level of effort required to convert a lead into an actual opportunity
From a sales rep perspective, AI can also gauge the overall quality and contribution of the people involved; factors like work ethic, team mood, product knowledge and closing ability.
A 360-degree view can help you answer those difficult questions that can’t necessarily be solved with the human eye. Questions like:
● What is the true value generated by marketing activities?
● What is the true value generated by the sales development team?
● What is the true value generated by the AE team?
When you know this, you can better optimize your sales and marketing resources, budgets, activities and give credit to the right team for the right reason. Then, you can drill down on the individual level and understand why some perform better than others.
We miss all of the shots we never take, after all, and having a handle on activity levels becomes an excellent gauge into determining if we're really getting the most out of every minute in play. So while the sales department does have the ultimate outcome of the sales contribution in its hands, it can't get very far without the marketing contribution. If sales departments aren't presenting the value proposition correctly or handling objections to the lead's satisfaction, then it really doesn't matter how good a job marketing did finding leads; the sales department couldn't make the final appeal.
Meanwhile, if the marketing contribution isn't up to par, the sales contribution is immediately hampered, spending its time, effort and resources pursuing people for whom no amount of sales efforts will convince the lead there's any value to the product or service offering. It's like trying to sell bowling balls at a fisherman's convention; sure, some of them may bowl, but why aren't you selling fishing gear to people who obviously want fishing gear?
In Sales, Uncertainty is a Certainty
Even with the best numbers, calculations about the fit and interest of leads and opportunities are not enough. Calculations about lead potential have uncertainty built right into the name: potential. Yet as is often the case, management with facts in hand tend to produce better results than management without facts. Uncertainty cannot be removed from the system, but it can be addressed, managed and improved incrementally.
AI makes it possible to measure the incremental value generated by every link in the sales and marketing chain. By applying machine learning and natural language processing (NLP), businesses can gather numbers that reflect reality, enabling you to make the right adjustments and get your sales and marketing teams humming in tune.
Therefore, whether you’re in sales or in marketing, base your discussions over actual contribution in numbers, not on gut feelings. Learn what's working in the sales and marketing process and what isn't, so that the most effective changes can be made on all sides.
About the Author
Rob Käll is an accomplished entrepreneur with 3 Successful MM exits in 10 Years. His latest startup, Cien, gives sales leaders an immediate edge by using the power of AI to increase the productivity of their teams.
Automatically detecting problems, predicting outcomes and recommending the shortest path to success. A versatile leader that has served as Startup CEO, Corporate Exec and Technical Founder, Rob advocates a scientific approach to sales and marketing alignment. Connect with Rob on Linkedin and Twitter.