How can Sales and Marketing work together?
The simplest way is to get sales and marketing to work together is to (x) align marketing’s #1 goal to a revenue-related “commit” that (y) sales agrees to.
That marketing commits to, and reports every week to, as their #1 goals. Not PR as #1, or social media impressions as #1, or webinar participants as #1. But a lead / opportunity / revenue commitment as Goal #1 for marketing.
What should this goal be?
Sometimes, marketing simply signs up for the ARR goal for the year (i.e., to hit $5m ARR this year). The pro here is that’s the same thing sales is signing up for. The con is that it’s hard to tell how much of the effort is due to marketing. My recommendation is not to do this. It leads to way too much “best efforts” talk and actions.
At the other end of the continuum, sometimes marketing signs up just for a “raw” lead commitment. To deliver X leads per month to sales, so sales can hit its revenue and bookings number. This is simple to measure and the most traditional metric for marketing in SaaS. The con here is potentially around lead quality. If everyone doesn’t agree on lead quality, and how to measure it, and how to maintain it, then a lead commit will lead to plenty of disagreements on if the leads are “any good”, and just as importantly, if they are declining in quality. Sales almost always complains the leads are getting “worse”.
More importantly, perhaps, if marketing is just measured on raw leads, they won’t nurture the leads as much. If you have deals of even $3k-$5k a year or bigger, they’ll need to be nurtured for weeks, months or even years before they close. If marketing is only responsible for raw leads, they won’t be as incented to nurture them once they are measured and captured.
Between raw leads on the one hand, and pure closed revenue on the other, are a number of intermediate steps that require both nurturing and agreement with sales — and these are often the best ones to be marketing’s #1 goals:
- MQLs (Marketing Qualified Leads) are an upgrade to raw leads, enforcing a more rigid qualification process.
- SQLs (Sales Qualified Leads) take things a step further, and require sales to agree to the qualification and scoring. This ensures sales can’t complain about the declining quality of leads.
- SALs (Sales Accepted Leads) requires sales not just to agree on the quality of the leads, but agree to call them back and do the work 🙂
- And usually finally, SQOs (Sales Qualified Opportunities). This is more common in enterprise deals. With SQOs, marketing doesn’t get credit for a lead until not only has sales accepted it, but they’ve then moved it all the way down the funnel to a true qualified opportunity, with real budget and identified, interested stakeholders. But this is way too complex and downstream a metric for SMB sales and higher volumes of qualified leads. This really only works as the #1 core metric for marketing IMHO and experience if you are only doing $50k-$100k+ deals or bigger, roughly.
What most important for alignment is your head of sales and head of marketing agree to the core KPI and goal. It’s shocking how often they haven’t. And that always leads to a suboptimal outcome.
(note: an updated SaaStr Classic answer)