Don’t Blame It On the Pandemic: The Real Reason Your Revenue May Be Down

Don’t Blame It On the Pandemic: The Real Reason Your Revenue May Be Down

By Kristen McAlister, President and COO, Cerius Executives

If your company revenue isn’t where you want it to be, you might be tempted to blame the pandemic. But there may be another culprit at work—misalignment between your Sales and Marketing team. And fortunately, this factor is easier to fix.

Here’s a staggering thought: Sales and marketing misalignment is the number one reason why an organization’s annual revenue stagnates, or worse, declines. If your business is growing (or plans to), you can no longer afford to ignore this reality.

The issue has become such a hot topic that many companies with more than 200 employees have listed it as their third biggest marketing priority — ahead of understanding marketing ROI and reducing acquisition costs.

“The truth is, driving revenue takes a highly tuned engine—your Sales and Marketing teams working as a unified force,” said Pamela Wasley, CEO, Cerius Executives.

So it begs the question: How is your Sales and Marketing engine functioning? Is it running smoothly or does it need a tune-up? Are your two teams in sync? Speaking the same language? Do they share the same view of your business strategy, market opportunities and customers?

The Facts: Why Sales and Marketing Alignment Matters

7 Opportunities to Improve Revenue and Results

1. Ask yourself: Are your Sales and Marketing tactics stuck in the past?

If you haven’t been paying close attention: The buying cycle has changed dramatically. Today’s buyers are purchasing differently, and if your Sales and Marketing tactics aren’t keeping up, you’re likely falling behind.

Multiple research studies indicate that over 60% of the buying process for business solutions concludes before the buyer contacts a salesperson. In some product categories, that percentage is even higher. That means the role of marketing to engage with prospective customers and position your product or service as the solution is greater than it has ever been.  Both Sales and Marketing need to adjust to this newer paradigm of more frequent touch points prior to purchase and plan accordingly.

In a nutshell, what used to work for Sales teams is no longer effective, and a disjointed Sales and Marketing strategy benefits no one and leads to wasted resources.

2. Align your business strategy with Sales and Marketing action plans.

It’s not just crucial that Sales and Marketing be aligned with one another—it’s also crucial that they be tightly aligned with your company strategy and goals.

“Ideally, Marketing and Sales should develop a plan together, tying it closely to the product strategy or company strategy,” explains Wasley. “The plan should clearly define how Sales and Marketing will work together to generate demand and revenue, as well as include key performance metrics.”

3. Ensure Marketing is fully engaged (and staying close to) customers.

Marketing has one goal—to reach consumers at the moments that most influence their decisions.

By nature, your Sales teams are close to customers every day, but does your marketing team have the same ground-level insight? This customer knowledge is critical for planning and executing the right campaign tactics at the right time.

“If you want to sell more products to more people, you better have a firm grasp of what makes them tick, where their challenges lie, and what keeps them up at night,” said Wasley. “Marketing does a good job defining target audiences for planning purposes, but communication—active listening—needs to happen on an ongoing basis. Companies who do this are at the top of the revenue pyramid.”

Therefore, don’t let Marketing be a selective listener. Make sure they’re listening to those who have purchased in the past, as well those who have chosen to say no.

4. Define your criteria.

Leads are names and numbers; qualified leads have met basic criteria and gone through a lead-scoring process. The challenge is, your Sales and Marketing teams may not agree on what constitutes a qualified lead.

Lead-scoring typically involves explicit demographic criteria, such as company size, industry, job title, location and the prospect’s budget. Implicit criteria monitor the prospect’s behaviors. How many times have they visited your website? Or downloaded whitepapers? Or joined webinars or demos? Did they tune into a webinar? Click-through a link in e-mail marketing?

“Marketing and Sales have to agree on the scoring criteria, as well as what point a lead (often called a marketing qualified lead) is turned over to Sales for final qualification and acceptance,”  said Wasley. “You need to know what qualifies as a lead before it gets sent to Sales for a more costly follow-up. A great deal of heartache and frustration can be avoided by clearly defining what a lead is—and how it will be ranked and handled.”

5. Know your numbers.

How many qualified leads are needed to generate a sale?

If you choose just one question to spend time on, make it this one. This is the one that tells you how much gas your engine needs, and how far it will take you. With a glance at your dashboard metrics, you should get critical information: average deal size; the revenue target; and the number of deals it takes to reach that target.

Sales and Marketing should be able to instantly provide you with the conversion rates for each stage of your Sales and Marketing funnel—clearly showing the time it takes for a buyer to move through their research and decision-making process. This is your “funnel math” and it requires a sophisticated funnel algorithm to calculate these variables.

6. Eliminate bottlenecks in your revenue generation process.

Another strong opportunity is to use funnel metrics to isolate gaps, then take corrective action to eliminate them.

If Sales and Marketing have aligned their respective processes to the stages of the buying process, and if the funnel metrics are providing a way to model and report progress, you’ll be able to quickly see where there may be bottlenecks.

Marketing needs to listen to the customer to understand their purchasing process. This, in turn, must be communicated to the Sales team, which must align its process to the buying process stages. Finally, using funnel math, they’ll be able to see where leads are not progressing between stages. They can then determine the precise reason, and take the targeted and correct action.

“Throwing money into the lead generation pipeline will not solve a bottleneck—nor will product modifications or hiring additional Sales staff,” said Wasley. “Without visibility and transparency when revenue lags, the usual explanations arise: Sale isn’t closing enough, Marketing isn’t generating good enough leads. The trust can only be found using more sophisticated funnel metrics.”

If you can spot costly bottlenecks in your funnel process, your immediate goal is to identify and eliminate them. The sooner you can fix the process, the sooner your funnel will work as it should—resulting in more sales, a faster buying process and higher revenue.

7. Make sure there’s balance at the top.

Finally, take the time to evaluate your leadership strengths and weaknesses, and ensure Sales and Marketing are getting equal attention.

It’s common to have a VP of Sales and Marketing; however, finding a single executive with equal strengths on both sides is uncommon. In certain situations, this executive may be tempted to spend a disproportionate amount of time and energy on Sales, either because of lack of Marketing experience or due to the pressure to hit specific revenue goals.

Make sure any weaknesses in his/her skillset and experience are balanced by a strong director of Marketing. Conversely, a VP with a strong Marketing skillset should be balanced with a strong director of Sales.

The Bottom Line

If you’re witnessing a declining revenue, it may signal disparity between your Sales and Marketing efforts—perhaps stemming from dysfunctional processes, poor communication or even your executive leadership. Whatever the cause, resolving misalignment challenges can go a long way toward increased revenue. 

Learn how we can help your business grow profitably today.