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 tend to confuse. Normally, a VP or Director is 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. Forecasting brand-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 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 only follow up on all the leads we gave you. Get off of the golf course, and work more than 4 hours a day! If you just did this you’d be well over quota and the company would be doing fine.”
Sales And Marketing P eople Can Be Very Different
Salesfolks and Marketers are different types of people and tend to view the world differently. Usually from their own selfish perspectives, of course. Variations of this often nasty “discussion” as simulated above are far from uncommon and can get pretty ugly. Of course, there is a tendency for some natural tension between these departments. But this can get out of control and 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? How do you avoid all of this counter-productive ugliness?
How do you prevent a sales & marketing war?POTENTIAL SOLUTIONS TO REDUCE 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 of Sales & Marketing in your organization. If you can find the right person to fill this role, this can certainly be an excellent solution. Having a single leader can go a long way toward eliminating, or at least greatly reducing this conflict. But this assumes the VP has a balanced background and perspective and is fair. A big part of this is not favoring one department over the other. But don’t underestimate the difficulty of finding this person.
There are good people able to fill this role out there. But aren’t plentiful and maybe even somewhat rare, in my opinion. There are far more executives who have been put in the position of VP of 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. But unfortunately, they give short shrift to or completely screw up the other function. Usually not intentionally or with malice.
You will often find this combined VP position in companies that are not “marketing-intensive”. Companies 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, even if 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 of this war. And let me tell you, it isn’t pretty. I’ve also (effectively, I think) filled the role of VP of 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. It’s happened 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 sometimes 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 favoritism 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 tolerate or even reward 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 the key. I recommend planning social activities that allow sales and marketing department counterparts to get to know each other. As “people”, outside of their project activities. 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 these VPs are monitoring the counterpart relationships below them. Ensure both VPs are open and honest about the relationship between departments. Lastly, watch for arrogance (especially from “experienced veterans”) when screening potential new hires for either department. Arrogance often is the trigger that 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 who have had some sales or business development experience. Those who understand how to deal directly with customers, and know what’s it like when your living depends upon making your quota. Insist that marketing includes the sales folks in determining what a “qualified lead” looks like. Try hard to get agreement up front on this important issue. If you do, 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 that cut across 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. So design goals that reward the two departments for working together. You mustn’t ever allow one department to “get ahead”, by blaming the other. Try to tie them together as much as possible in your goal setting.
SUMMARY
To limit issues between sales and marketing functions in software & hardware companies try to ensure that they “sing from the same sheet’. Pay close attention to the departmental activities which can greatly affect 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. Also the social fabric of the company, compensation structure, and the strategic use of targets/goals. Formal cross-departmental reviews can be helpful. This allows each department to influence the other department’s approaches. All too often I see these things aren’t taken into consideration until after the fact. By then it’s often too late. 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? Please post a comment with your own experience to expand the discussion.
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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.
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.