By Frank Donny
Practice Leader Sales Operations, Quick Start Strategies
In a recent Hubspot survey, the results listed Sales and Marketing misalignment as the fourth most challenging issue facing sellers today. In their research, they found that 1 in 4 sales reps report that closing the alignment gap between the two groups would result in the highest sales growth for their company.
It’s not surprising that this would be top of mind for sellers. They succeed or fail based on the quality of leads that are converted directly to sales opportunities. When marketing and sales are not aligned as to what is a qualified opportunity the early-stage, top of funnel sales performance suffers. This results in the conversion rates for marketing-sourced opportunities between the first and second sales stages – Qualification and Discovery – to radically decrease. Benchmark data suggests that a traditional conversion rate, regardless of source, in these first two sales stages should range from 66 to 72%. When sales and marketing are not aligned on what qualifies as an opportunity, conversion tanks to under 40% of marketing-sourced leads making it to the second sales stage.
Worst yet, sales reps see marketing-sourced leads as inferior and do not apply same sales rigor and discipline as they would to sales-sourced leads. The obvious result is these deals age, get cold, and are often discontinued.
So why the misalignment? Traditionally, the main culprit is alack of understanding of which prospects align to your unique Optimal Opportunity Profile (OOP). Your OOP is comprised of those market segments, solution attributes, sales metrics and buyer behaviors that align to when you win versus lose across your complete lead to opportunity ‘closed/won’ lifecycle.
How do you establish your unique OOP? Step one is to do a detailed analysis of all opportunities that have gone to term – won or lost – over the last 4 to 8 sales quarters. Normalize the data to discard any opportunities that are unique based on size, discounting, or special circumstances – and focus on those key data elements that are statistically relevant and have consistently contributed to your OOP makeup. This includes, but is not limited to, vertical markets, prospect company size (revenue or employees) opportunity type (new business versus existing, or opportunity size), and unique aspects related to your buyer’s sales journey.
By overlaying your OOP to your current pipeline and forecast you can identify those opportunities that are aligned, and mis-aligned, to where you have won in the past. Your sales team now has the focus it needs to apply corrective actions that can improve productivity. Your OOP can also be extended to marketing, allowing marketers the insights they need to focus their demand generation efforts. This will help to eliminate many sales and marketing alignment challenges.
As a sales operations leader, you can directly impact the alignment between sales and marketing by helping to uncover your Optimal Opportunity Profile and sharing the insights with marketing. As an example, you can provide a lead source start/stop assessment to marketing.
The graphic in this blog is a real assessment we performed for a client. Look at the highest volume of inbound leads that convert to an opportunity by source and track win rates, cycle times, and alignment to OOP. If your largest lead flow sources are not highly ranked in all categories, consider reallocating those investments in the sources that are highly ranked. In this example, Google advertising is one such investment that needs to be sunset. You may consider adding revenue into the mix as a category, however, large deal outliers can skew the analysis.
Once you have determined your OOP, you open a whole new level of assessment that can greatly benefit your sales and marketing teams. With OOP insights in hand, pipeline quality, forecast accuracy and overall revenue performance will greatly improve.