Last week I presented some thoughts on Customer Marketing to the BMA Product Marketing Round Table in Silicon Valley. It was a good group with lots of questions. If you live in the Bay Area I recommend you attend future events. One area of interest in the Q&A was the relationship between the Sales and Marketing Departments.
The audience was dominated by B to B technology sales and marketing professionals. One of the audience members was from the sales side and he asked a blunt question,
If Marketing is spending their time and budget talking to customers how are they going to generate leads for the Sales Team?
Great question.
Customers are very important. Regardless of your sector or category, heavy users represent the majority of revenue and profit. Leading companies always have a disproportionate share of these heavy category users. They take full advantage of the profit fan, of the five sources of revenue that a customer represents. This is what makes them leaders.
But how did they get these customers in the first place? Sales.
The Sales Team is an essential part of most businesses. There will always be attrition. Some can be controlled and some can’t. And companies need growth, which comes from new customers. Sales primes the pump, keeps the water flowing into the leaky bucket and fills the next bucket. The Sales Team is very important.
But acquisition is expensive. It costs many times more to get a new customer than it costs to keep a customer. To be efficient the Sales Team needs to bring in new customers that look like current best customers. They need to focus on growth from new customers, not on filling a leaky bucket. They also need to acquire new customers under the correct premise. Most loyalty problems can be traced to the sales process. Big job.
All this suggests a level of integration and cooperation, both strategic and tactical, between Sales and Marketing not typically found in B to B companies.
Most have Sales and Marketing in distinct departments, which often compete for resources. It is also common to see one group dominate the other. The questioner at last weeks presentation clearly felt that Marketing should support Sales. In this model Sales focuses on getting customers, by any means possible, and without consideration for the lifetime value of the customer. And Marketing is focussed on supporting this sales effort. This is a very common scenario, especially in B to B Tech Companies.
But it is very inefficient. Sales spends more and more budget to get fewer customers of lower and lower quality that leave just as or often before the cost of acquisition has been returned. Marketing is spending its time and resources chasing Sales’ tail. Meanwhile, using an integrated analytic platform and MarCom Strategy, the Sales Team at the category leader is skimming the cream off the top and Marketing is maximizing ROI by building relationship equity and value with best customers.
Which model makes the most sense to you?
Hip Shots
- The Sales Team should have their own MarCom resource focused of developing collateral material and lead generation campaigns.
- Marketing should be tasked with building Brand and Relationship Equity, and the Net Present Value of the customer base.
- Include Net Promoter Score in your KPIs.
- Invest in an analytic resource and design a MarCom Srategy that crosses the line from acquisition to retention and business development.
- Focus company culture on converting best customers into passionate advocates.
- Introduce and support cross-functional coordination and cooperation practices.
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