Sales and marketing alignment is vital for accelerating company growth. When these teams work well together, metrics soar. In fact, according to MarketingProfs, companies with aligned sales and marketing teams experience 38% higher sales win rates as well as 36% higher customer retention rates. Conversely, it’s estimated that misalignment can cost organizations 10% or more in annual revenue and can lead to tension and disorganization that can breed a toxic work environment.
While there are many paths and strategies to align these teams, the most crucial step is goal-setting. Goal-setting is the block and tackle of data-driven marketing. It’s the foundation for determining what tactics are used, what experiments to run and whether your tactics are effective. Most importantly, goal-setting helps keep both teams focused on the bigger picture so that no matter what happens within each team individually, they have common ground on which they can recenter their strategies.
The following are steps to take to ensure your marketing and sales goals are set up for success.
Set your North Star goal.
The first step in aligning your teams is setting a North Star goal. This can be the same as your company’s North Star as long as it includes a trackable metric. So think of something like a revenue goal or a customer acquisition goal. It’s important that is the critical goal and to set it jointly to ensure your teams stay hyper-focused on the bigger picture. Once you set a shared North Star goal, you can align on drivers of that goal.
Determine what drivers impact your goal.
Next, determine what goes into, or drives, meeting that goal. Sometimes it helps to build a funnel or steps towards your goal, essentially creating different measurable goals for each step.
For example, if your North Star goal is a revenue goal, you’ll want to calculate how many customers you will need in a given period of time and how much revenue each customer will need to generate in order to reach the goal. From there, you can look up-funnel and determine that, for every 10 customers that sign up, sales will need to talk to 100 people. In order for sales to talk to 100 people, marketing needs to reach 500 people.
Now you have the overarching goal—the revenue goal—broken down into smaller actionable goals for each department to dive into: number of customers, number of prospects and audience size. Staging your funnel this way helps keep sales and marketing accountable and focused on what they need to achieve to reach the North Star together.
Use the funnel to forecast.
Since you’ve set up measurable goals for each stage, you can now forecast each stage. A forecast is a projection of whether you will reach your goal in the timeline that you have set.
If your goal is to sign up five new customers, then marketing will need to be on track to reach 50 communications with customers this week, with 10 of those expected to turn into prospects. Then, based on historical performance data, if sales close one in four prospects on average, you can forecast two customers from this week’s marketing efforts.
Forecasting provides transparency between teams and visibility into how achievable your goals are. Forecasting each stage helps to identify which steps in the funnel aren’t working and provides the data needed to assess which adjustments need to be made in tactics or goal-setting.
Experiment and learn together for constant improvement.
The most important part of aligning sales and marketing is to constantly learn from what is and isn’t working and adjust your strategies accordingly. With your eye on your goals, you can experiment to see what helps get you what you need. You can experiment in each stage of the funnel.
For example, at the top of your funnel, where you’re trying to generate customer awareness, experiments can include emailing campaigns, programmatic spend, which partners are effective, etc. Your sales experiments can include changes in positioning or adjustments in pricing and packaging.
Use experiments to find what works, and don’t be afraid of a failed experiment. Both positive and negative learning should be celebrated as long as you’re learning together so that you are constantly improving.
When sales and marketing teams work together and toward shared goals, a company can expect to increase sales, improve productivity and generate more revenue. It’s critical for these teams to be aligned, and the foundation for solid collaboration between teams starts with proper goal-setting.
This content was originally published here.