Ending the War between Sales and MarketingBy Philip Kotler, Neil Rackham and Suji Krishnaswamy

IntroductionMarketing and Sales are normally at cross purposes with marketing blaming Sales for poor execution of a good plan and Sales believing that Marketing is not in touch with the customers and setting prices too high. Marketing thinks sales concentrate on the short term and do not look at the larger picture. Each group undervalues the other’s contribution.Proper coordination between the two would shorten sales cycles, lower market entry costs and lower sales costs. Product announcements come in without Sales being ready to capitalise on them.A study was conducted across industries and the findings were:

o Marketing function takes different forms at different product life-cycle stages, which affects relationships between Sales and Marketing.

o The strains between Marketing and Sales are largely economic or cultural.o Working relationship between Marketing and Sales can be assessed.o The relationship can be made more productive.

Different Roles for MarketingMost small businesses do not have a separate marketing person and ideas normally come from the sales team or the advertising agency. As companies grow, they add a marketing person (or persons) to take the load off sales people. They start work with research, consumer behaviour and work with outside agencies to work on advertising and sales promotion. They develop material to help the sales force attract customers and close sales. Marketing is seen as a support function for Sales with the relationship being usually positive.As companies turn larger and more successful, marketing expands its wings on to segmentation, targeting and positioning. It also starts competing with Sales for funding. Sales function remains the same while a new marketing mission is developed. Disagreements now start with each side taking on jobs which they feel that other side is not doing properly.In the next step Marketing interacts with other departments and now wants the whole organisation to be “marketing led”. Their competencies and understanding are now questioned especially by Sales. The relationship now shifts from supportive to leading.

Why Can’t They Just Get Along?The two sources of friction between Marketing and Sales are:

o Economic Marketing spends on three Ps – pricing, promotion and product. Salespeople favour lower

prices while Marketing wants pricing to reflect the brand positioning. While Marketing sets the price, the salespeople have the final say on transactional pricing .

Promotion costs are a major source of friction with salespeople wanting cuts in spends on advertising and diversion of funds to the size and quality of sales force.

In product design, marketing looks at broad appeal while salespeople want the products to be shaped on individual customer needs.

CEOs prefer spending more on Sales since they see it as a more tangible asset which gives them better results in the short term. It is also easier to work out Sales contribution to the bottom line.

o Cultural Both attract different personality types. Marketing people are highly analytical, data oriented

and project focussed. They are ruthless in their evaluation of results. Salespeople on the other hand are relationship oriented and choosy as to which product features to promote and which to kill. They are always on the move and are used to rejection. It is therefore obviously an area of conflict.

Salespeople concentrate on low margin products to satisfy sales quotas while Marketing wants them to sell more profitable items. Sales looks at people while Marketing looks at programmes.

Four Types of Relationshipso Undefined where Marketing and Sales grow independently and are pre-occupied with their own

tasks. Meetings are held for conflict resolution rather than proactive cooperation.

o Defined where the two groups set up processes and rules to prevent disputes. Each side knows its own boundaries. There is a sense of cooperation and the groups work together on large events such as customer conferences and trade shows.

o Aligned where the boundaries exist but remain flexible. The sense of cooperation is even higher with each appreciating the other’s role and supporting it.

o Integrated with blurred boundaries. The groups go in for joint planning and training .Marketing focuses on strategic forward thinking types of tasks. There is a high degree of involvement of Marketing in major accounts and there is an atmosphere of “rise and fall together”.

Moving UpUNDEFINED DEFINED ALIGNED

Do not make any changes if….

The company is small.

The company has good informal relationships.

Marketing is still a sales support function.

The company’s products and services are fairly cut and dried.Traditional marketing and sales roles work in this market.There is no clear and compelling reason to change.

The company lacks a culture of shared responsibility.Sales and Marketing report separately.The sales cycle is fairly short.

Tighten the relationship between Sales and Marketing if….

Conflicts are evident between the two functions.There is duplication of effort between the functions, or tasks are falling through the cracks.The functions compete for resources or funding.

Even with careful definition of roles, there is duplication of efforts between the functions.The market is commoditised and makes a traditional sales force costly.Products are developed, prototyped, or extensively customised during the sales process.Product life cycles are shortening and technology turnover is accelerating.

A common process or business funnel can be created for managing and measuring revenue generating activities.

Moving from Undefined to Definedo Create clear rules of engagement, including handoff points for important tasks like follow-up on

sales leads.

Moving from Defined to Alignedo Encourage disciplined communication through regular meetings to look at problem and

opportunity areas. Develop systematic processes and guidelines to improve involvement of one with the other in important areas.

o Create joint assignments through job rotation and involvement in top accounts and conferences.o Appoint a liaison from Marketing to work with the sales force. Understand that the liaison does

not develop products but explains to the Marketing team as to what the customer wants from the sales person’s eyes.

o Colocate sales and marketing people.o Improve sales force feedback through development of proper information forms.

Moving from Aligned to Integratedo Appoint a Chief Revenue or Customer Officers.

Sales and Marketing Checklist

Define the Steps in the Marketing and Sales Funnels

Marketing should take

responsibility for the first four

steps of awareness,

consideration and preference

through personal and

impersonal communication.

Sales looks deeper in moving

the customer from preference

to advocacy through the sales

team.

The involvement in each other’s area through clearly laid down guidelines improves results

Split Marketing into Two Groups – Upstream and Downstream

o The upstream team concentrates on customer sensing through market research and develop the long term view of the company’s business opportunities and product development.

o The downstream team develops advertising and promotion campaigns, collateral material, case histories and sales tools.

Set Shared Revenue Targets and Reward Systemso The targets are simple but the compensation causes problems since Sales people are used to

commissions as a part of the package.

Integrate Sales and Marketing Metricso These could be in terms of sales quota, number of new customers, gross average profit for each

customer and sales expense to sales ratios. Downstream marketing people can also be evaluated on these metrics.

o The metrics for upstream could be in the areas of accuracy of forecasts, discovery of new segments. Different measures would have to be developed for Brand Managers, Market Research, Advertising and Sales Promotion, Product Managers

ConclusionIt is common knowledge that Marketing and Sales under-communicate, underperform and over-complain. It is, however not necessary that all companies should evolve from undefined to integrated roles. Carefully planned enhancements will bring the salesperson’s intimate knowledge of the customers to the company’s core. This will also help in product development and marriage of softer relationship skills with harder analytical skills. The evaluation and compensation schemes are also improved.best of all these steps will improve both your top and bottom lines.