The Dangers of Competition Between Sales and Marketing
I recently ran into an interesting situation. A business owner learned that his marketing managers had extensive sales experience – always a good thing in a marketing manager. He put his brain to work on this little tidbit and figured that if his marketing people were selling along side his salespeople, he could increase sales without increasing overhead. This guy saw himself as someone who thought outside the box, a real problem solver. Unfortunately, he practiced seagull management, where rather than working in the business, he flew in every couple of weeks, crapped all over everything and flew out. He told his marketing people to spend 50% of their time selling, he gave them a commission structure to motivate them, and threw on a sales quota to cover accountability. (oh yes, it was a sales quota above and beyond what anyone in the company had ever accomplished, based on the 400% increase he hoped would magically take place.)
The results were nothing short of predictable. The sales cycle had always been long and relied heavily on personal relationships. Most of the work coming into the company was custom development work and was therefore subject to competition for limited resources. Sales people's requests for materials from marketing were put on the slow track or completely ignored. Sales material content started to shift in favor of whatever vertical market the marketing manager was targeting. Not having time to play umpire in all this, the company president just shook his head and worked on solving operations issues and bringing in his own sales deals. Salespeople started creating there own marketing pieces and planning their own show and marketing events. Each salesperson and marketing person became his or her own little franchise of the company (without the 40% margin afforded to resellers).
Sales that had been going up flat-lined. After a couple months, seeing that marketing people weren’t making many sales (note the afore mentioned long sales cycle), the business owner said that they should spend 100% of their time selling and could do marketing work on an as-needed basis. After a couple months at that, he simply fired all the marketing people in a round of company-wide layoffs. Pending sales were handed off to other salespeople, which slowed them even further. Sales continue to be flat, sales attrition is inevitable.
I can’t begin to go into all the morals of that story, but I’ll touch on a few. First, putting people that need to cooperate (i.e. sales and marketing) in competition with each other is unhealthy for the bottom line. Second, incentives need to work toward the common good or they will definitely work against it. Third, accountability (i.e. quotas) needs to be based on historically realistic norms, not on the greed of the main beneficiary.
This story brings up the question of how much involvement marketing should have in sales. I’ve always believed that marketers should have extensive front line sales experience, preferably where they’ve had to live on a commission. I also believe that good salesmanship is a part of marketing. However, the marketing department serves a different function than sales. Marketing is about building the brand and attracting clients. It’s about feeding the sales funnel with leads. If anything, the sales function is a marketing specialty that handles the transaction phase of the customer life cycle. Sales can rarely survive on its own and should certainly never exist without concerted marketing effort to support it.
For marketing and sales to properly coordinate, they need to interact beyond the bounds of planning and interact together with the customer. This means marketing managers need to go on sales calls with the sales people, and sales managers need to participate in viewing and analyzing market research.
As to the need for incentive, the company needs to create incentives that bring marketing and sales together. If salespeople receive incentives based on individual effort, marketing needs to receive incentives based on over all revenue in their area of focus. I’ll talk more about incentives later and lay out some incentive plans that put the focus on business growth success.