I plead guilty to enjoying a cold beer or two, and I’ve watched with amazement as the decade-long bull market in the craft beer industry shows no signs of abating.
Sales and marketing alignment is a hot topic. There’s a growing realization that these two functions must work more closely than ever before to generate revenue and drive growth.
Indeed, sales and marketing alignment is no longer a nice to have, optional extra or buzzword – it has a very real impact on the bottom line. The Aberdeen Group found that companies with strong sales and marketing alignment achieve 20 percent annual growth rate, while companies with poor sales and marketing alignment see a 4 percent revenue decline.
At HubSpot, we coined the term “smarketing” to describe sales and marketing alignment. It’s the foundation of our sales and marketing engine and spells out which team is responsible for what activity. Crucially, at each stage there is a service level agreement (SLA), which details what should happen and helps keep both teams accountable.
A Common Language
SLAs are important, but so too are definitions and you must get everyone in sales and marketing using a common language quickly. Too many businesses do not have a clear or well understood definition of a lead.
Gray areas lead to misunderstandings between sales and marketing, and when this happens, it’s not uncommon to have sales complaining about the quality of leads and marketing bemoaning sales for not working them. Clear definitions, expectations and responsibilities help to rid businesses of this misalignment.
What stages should your sales and marketing funnel include? I’ve already covered the danger of not defining a lead. However, I often speak with marketers that have a half-baked process which looks like:
This is better than having no process or definition, but it is basic and potentially means the marketing team will generate poor fit leads, and sales will waste time following up with the wrong ones. The above process fails to provide the detail or nuance sales reps require to be successful.
To build an effective sales and marketing engine, you need a funnel consisting of the following stages:
Let’s dig into what each stage means, who should own it at your business, and metrics to track.
A prospect is someone that visits your website, but has not given you any of their contact details. Despite them not handing over any information, it’s easy to begin tracking the actions a prospect takes on your website using marketing software. This information is stored and remains anonymous, until the person becomes a lead by giving you their contact details (often in return for content or a product). Responsibility for driving prospects and website visitors is owned by marketing and they typically have a monthly website traffic goal.
As mentioned a person becomes a lead when they complete a form on your website (at a bare minimum this means they have given you their email address). Once this happens a contact record will be created which contains contact details, actions they have taken on your website and company information. Businesses often generate leads by creating offers, such as an ebook, whitepaper or webinar, that people must complete a form to access or by releasing free products. Marketing owns all lead generation efforts and will have a monthly lead goal.
3. Marketing qualified lead (MQL)
MQLs are leads that the marketing team deem worthy of handing over to sales. Oftentimes, a lead becomes an MQL if they are both high fit and high intent. Fit would include factors, such as company size, industry and location, while intent would be actions the lead has taken like visiting the pricing page on your website, watching a webinar or requesting a trial.
This stage is important as it’s focussed on providing quality leads to sales, rather than volume. It’s where the handover between sales and marketing begins, and marketing will be held accountable to a set number of MQLs each month.
4. Sales qualified lead (SQL)
SQLs are where the sales organisation becomes involved. Typically, a business development representative (BDR) will begin prioritising leads and will set up a short connect call with the lead. From this call they will seek to quickly learn about the lead’s challenges and if they have budget for the product. If the lead is a good fit, it will be passed to a sales reps rep to work.
BDRs are responsible for creating SQLs each month and will be measured on number of SQLs they create which are accepted by a sales rep, meetings set up between a sales rep and lead, as well as total revenue generated.
If a sales reps chooses to accept a lead and begin working it, the lead will become an opportunity (sales reps are often assigned leads based on the territory, industry or segment they own and are then given a time to work the lead before it is recycled for other sales reps to work). Sales is responsible for working opportunities and will have to commit to working a set number of leads within an agreed timeframe, such as working 100% of leads within 48 hours.
The sixth and final stage is when a lead closes and they become a customer. This is what sales teams aspire to do, and what marketing activity helps drive. The sales organisation will be responsible for hitting a revenue goal each month - most SaaS businesses focus on revenue, rather than number of deals that a rep closes. Some organisations also have a sales enablement function, which can be part of sales or marketing that helps sales reps to close deals through content, deal support and training.
The best businesses figure out and invest in sales and marketing alignment early on. They realise that sales and marketing can be engineered, and the starting point is clearly articulating each point within the process, who owns it and at what moment it is handed over. That’s the most effective way for you to build sales and marketing alignment that gets you ahead of the competition.
Ben Cotton leads EMEA sales enablement for HubSpot out of Dublin, Ireland. Working at the intersection of sales and marketing he uses content, data and technology to help HubSpot’s sales organization succeed.You can read his blog here, or follow Ben at Twitter, LinkedIn and ben-cotton.com