In this free IDC analyst report, discover why coordinating the activities of marketing and sales—from day one of the revenue cycle—is essential for profitability. Learn how to stop the revenue loss that occurs during a prospect handoff; how to give sales the freedom to target more efficiently, while enabling marketing to build better prospect relationships; and how to choose software that tightens the marketing/sales alignment. Download your copy of this insightful report now.
Michael Gerard Research Vice President, Executive Advisory Group
Coordinating Marketing and Sales Across the Entire Revenue Cycle
August 2008 As B2B customers become more sophisticated and competition increases, the integration of marketing and sales becomes more critical for meeting and exceeding market demands. And the cost for this integration is only increasing as growth in marketing and sales investment outpaces revenue growth. According to IDC, growth in B2B technology marketing and sales investment is increasing 7% in 2008, yet global IT revenue is increasing at only 5.7%. In addition, IDC estimates that the annual performance cost per B2B sales representative as a result of poor engagement with prospects is $1 million.
The following questions were posed by Marketo to Michael Gerard, research vice president of IDC's Executive Advisory Group, on behalf of Marketo's customers.
Q. Why is it important for marketing and sales to work together across the entire revenue cycle?
A. The expectations for revenue growth in an increasingly competitive environment continue to challenge even the best marketing and sales teams. And with marketing and sales costs to achieve each dollar of revenue increasing, alignment and coordination between these groups are mandatory for success.
In addition, B2B buyers are more sophisticated in terms of how and where they access information and how that information is used to influence and drive the decision-making process. According to a recent IDC study, buyers spend up to 4.8 hours per week, on average, with third-party information to support current or future IT purchase decisions. Of this time, about three hours per week are spent on information related to new purchases or general education that can lead to new purchases. Meanwhile, IT vendors invest over $207 billion in marketing and sales annually to reach and influence technology buyers. This investment creates a lot of competition for those three hours per week per IT buyer.
To deepen relationships with buyers, vendors must strengthen a buyer's "return on time spent" by increasing the value received through each "touchpoint," whether it is online, at events, or during sales visits — and marketing and sales alignment is a key way to increase this value. The first touchpoint, in most cases, is with marketing, which demonstrates the importance of marketing's role in the revenue cycle. Marketing plays a big role in selling to the enterprise: Marketing "owns" the relationship with the broader marketplace (such as influencers, analysts, and other members of the broader buying committee); marketing also owns the initial relationship with all prospects up until sales engages with a limited and specific subset of prospects; and marketing continues to be a supporting player after the
IDC 687 sales engagement via the Web site, branding, search, and other campaigns that touch prospects. It is the hand-off process between marketing and sales where many revenue opportunities are lost and prospects' perceptions of the organization are damaged. Marketing leads may not be qualified properly, prospects' information may not be communicated properly as the leads progress through the organization, and well-qualified leads may not receive the needed attention to optimize revenue opportunities.
Q. What does it mean to coordinate marketing and sales across the entire revenue cycle?
A. Coordination and alignment require more than just tacking marketing onto the front of an existing sales process. True alignment requires coordinating marketing and sales activities, starting from the day you first make contact with a prospect as part of the initial education process through the sale and beyond to the customer relationship and ultimately customer advocacy. The old model of linear hand-offs from marketing to sales must give way to an intertwined model where both groups jointly own prospect relationships and coordinate their activities to optimize customer engagement with the individual and company.
Coordinating marketing and sales across this full revenue cycle enables marketing resources to focus on building higher-quality relationships with prospects and ultimately higher-quality leads for sales. In turn, sales will be more efficient and effective because more time will be spent on p... [download for more]
