In some – but not all – tech companies the Sales and Marketing functions are managed separately. They are separate, but closely related functions that some people without a strong background in either function have a tendency to confuse. Normally, there is a VP or Director heading up the Marketing department, and another VP or Director leading the Sales staff. But it is also not unusual to see a VP or Director of Sales & Marketing who leads both functions.
This all seems benign enough, so what’s the issue? The issue comes when actual revenue fails to meet the forecast–that’s when the finger-pointing usually begins. Unfortunately, not meeting forecasts is a common event in technology businesses, where forecasting of new software and hardware products can be particularly challenging. When that finger-pointing starts, it often breaks out first between the Marketing and Sales departments–here’s how the ensuing “discussion” might go:
SALES: “You haven’t planned products that our customers want to buy. You’ve priced them too high. And those leads that you’ve spent SO MUCH money on generating aren’t qualified and are essentially worthless to us.”
MARKETING: “You’re not selling the right products as we directed, or presenting the positioning of our product line properly. All you do is try to sell on price, constantly discounting and hurting our margins. If you’d actually follow up on all the leads we gave you, get off of the golf course and work more than 4 hours a day, you’d be well over quota and the company would be doing fine.”
Sales folks and Marketers are different types of people and tend to view the world differently and from their own selfish perspectives. Variations of this often nasty “discussion” as simulated above is far from uncommon and can get pretty ugly–which can really hurt a company in trying to reach its goals. So what’s the right way to get the Sales and Marketing departments to work together as a team, avoiding all of this counter-productive ugliness?
SOLUTIONS TO REDUCE POTENTIAL CONFLICT
The VP of Sales and Marketing
One way to greatly reduce this conflict is to have a common leadership for the Sales and Marketing functions. This usually means having a VP-Sales & Marketing in your organization. If you can find the right person to fill this role, this can actually be an excellent solution. Having a single leader can go a long way toward eliminating or at least greatly reducing this conflict, assuming the VP has a balanced background and perspective and is fair – not favoring one department over the other. But don’t underestimate the difficulty of finding this person.
There are good people to fill this role are out there–but are somewhat rare, in my opinion. There are far more managers who have been put in the position of VP-Sales & Marketing than there are those who are well suited for the role. More often than not you end up with a manager that understands one function well and gives short shrift to or completely screws up the other function. You will often find this combined VP position in companies that are not “marketing-intensive”, where the sales function is the dominant aspect of the job. If the Marketing function is truly less important, a company can get by with this structure, although it usually isn’t ideal. You can read more about the issues with a VP-Sales & Marketing role in a previous article that I’ve written entitled “Big S, little m“.
CEO Demands Communication and Cooperation
If care isn’t taken, the very different personality types in sales and marketing can lead to some pretty intense conflicts. I’ve been a soldier, captain and general on both sides in this war–and let me tell you, it isn’t pretty. I’ve also (effectively) filled the role of VP-Sales & Marketing, which is a story for another day. Much like the battles between Marketing and Engineering that I’ve previously written about, I have seen sales vs. marketing battles play out regularly in the companies that I have worked for as an employee, as well as at many of my clients in my consulting practice. If no one intervenes, things can get out of hand very quickly and paralyze a company.
In many cases, the key is how well the CEO handles the situation. He must go well out of his way to be a fair arbitrator in these discussions. Even the most benign comment can appear to show favor to one side in the eyes of the other. A CEO can’t ignore or deny the problem or assume it will be handled at the VP level. It is the CEO’s responsibility to prevent, recognize and fix this problem if and when it does occur. As a CEO you must also be careful to avoid inadvertently making decisions or setting up policies that reward or tolerate company politics of this nature.
Sales and Marketing Departmental Social Integration
Not everything can be avoided or corrected through traditional management techniques. In this situation, relationships are really the key. I recommend planning social activities which allow sales and marketing department counterparts to get to know each other as “people”, outside of their project activities. Since a successful sales/marketing interface relies heavily on relationships, it’s especially important to closely monitor the personal relationship between VP-Marketing and VP-Sales. Also, make sure that the VPs are monitoring the counterpart relationships below them. Ensure both VPs are open and honest with about the relationship between departments. Also watch for arrogance (especially from “experienced veterans”) when screening potential new hires for either department that will interface with the other. Arrogance often is the trigger which starts the battle between departments.
Integration of Departmental Functions
Encourage the sales department to get marketers in front of their customers. It helps to hire marketing people that have had some sales or business development experience, who understand how to deal directly with customers–and know what’s it like when your living depends upon making your quota. Insist that the marketing department include the sales folks in determining what a “qualified lead” looks like. If you can get agreement up front on this important issue, much of the finger pointing goes away when things don’t go as planned.
Joint Goals and Compensation Structure
It isn’t common to design department or individual goals which cross marketing and sales functions, but if you can find a way to do this you are structurally setting up the desire and need for close cooperation. Design goals which reward the two departments for working together. It’s especially crucial that you don’t ever allow one department to “get ahead” by blaming the other–tie them together as much as possible in your goal setting.
To limit issues between sales and marketing functions in software & hardware companies and ensure that they “sing from the same sheet’, pay close attention to the specific individual departmental activities which can greatly effect the perceived performance of the other department. Optimizing cooperation between sales and marketing demands an upfront look at things such as the corporate structure at the highest levels, the social fabric of the company, compensation structure and the use of targets/goals. Formal cross-departmental reviews can be helpful so that each department can influence the other department’s approaches. All too often I see these things aren’t taken into consideration until after the fact–when things have already blown up and there is a mess to clean up.
That’s my view on this all too common–but not often discussed–conflict. What has been your experience in this area? Post a comment to expand the discussion.
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S. Gibson says
All good marketers recognize the need to not only straddle the line between sales and marketing, but also make it their business to be a healthy if not aggressive revenue champion. This approach works particularly well when the Sales organization is equally committed to aligning with Marketing.
JC Hewitt says
I found this through Ultra Light Startups.
Although I’ve only worked as a freelancer, this seems like a brilliant set of observations.
From my perspective, marketing and sales are part of the same continuum, and unified leadership seems logical.
Marketing should identify and soften up the target customer while sales executes the last segment of the process.
Why are they so often split? Is it just inertia in the business culture?
Phil, I found my way here via Linked-in.Your observations about the tensions between sales and marketing in hi-tech companies are absolutely spot on. I recognised all of them from my time in Unisys and Siemens! Your recommendations are also thoughtful and well considered, but let me add another perspective.
Marketing has got detached from both the strategy of the company and from sales execution. Sales and marketing are just two parts of the same continuum, so I have been involved in some projects where we effectively create an industrialised end-to-end process that engages sales with marketing early, as you suggested, ensures that the messages match the company’s strategic intent, that the communications are relevant and timely and connected to very targeted and measurable sales execution tactics.
We have had some excellent results with what we describe to sales people as the answer to “the marketing cycle of doom” and to marketing people as the answer to the “the marketing merry-go-round”. Although marketing people can be a little defensive, hence our different terminology when talking to them, the results and the better relationship with sales usually win them over pretty rapidly.
I’d go with the general principle that if the relevant functions (e.g., marketing, sales, customer service, etc.) have complex dependencies among them, then it is better than they are kept under one head. Splitting up such functions under different heads should be done only when, say, specialization is beneficial, or that the volume of business is so much that one head cannot handle it effectively.
What this means is that having marketing and sales separated might be fine if you are in, say, the cosmetics business. On the other hand if you are in, say, the enterprise software business where customer requirements is complex and it take months or years to just deploy a solution, then separating such functions could cause a lot of problem down the road. So here if your business is so good that one VP cannot expected to handle the combined responsibility of marketing, sales, and customer services, then you should create vertical departments with each owning all such functions for a targeted market segment. The wrong thing to do here would be to divide your company into separate marketing, sales, and customer services departments with each owning all targeted segments. Just think of it as the same trick as separating many entangled hairballs. You’d want to separate them where there are the least number of lines connecting the balls.