Coming together is a beginning, staying together is progress, and working together is success.

—Henry Ford

An incumbent energy company had long given customers a dozen standard offers. Marketing created demand through e-mail and media campaigns, and inside sales reps followed up to qualify leads. Then, seemingly overnight, new entrants began siphoning off customers and the company abruptly realized it needed a new approach.

The company’s president asked marketing to conduct consumer research to understand the root causes of churn. The research combined direct interviews with, and surveys of, customers with data analysis of energy use from bills. This revealed three clusters of customers, each with different sets of influencers, and each requiring a different retention approach. After building a detailed tactical implementation plan for each segment, the company targeted a 6 to 9 percent increase in revenue to reverse its fortune against new attackers.

One segment consisted of large companies in energy-intensive industries. They wanted a supplier that could not only handle complex RFPs covering contingencies for downtime, but also provide advice on optimizing energy use. They had specific goals for their emissions footprints and wanted regular consumption data and benchmark comparisons. Marketing found out that it was manufacturing executives, not those from purchasing, who were the key influencers and set up programs to meet such requirements, with features including online reporting on energy reduction and a focus on alternative generation sources. Marketing and sales subsequently worked together to redesign the company’s RFP responses to include a clear value proposition for manufacturing executives, as well as those in purchasing. In addition, they assigned executive sponsors to work with manufacturing managers on site when problems arose. The head of sales also decided to improve the sales agents’ skills so they could act as advisers on energy use in concert with technical specialists. As a result of all these efforts, the supplier increased these customers’ loyalty.

The second segment consisted of midsize firms for whom energy consumption was a relatively small and stable component of their cost base. They cared most about having a reliable service, so this became the focus of the supplier’s communication with them in order to retain their custom.

The third segment consisted of mom-and-pop businesses such as dry cleaners and convenience stores. These price-sensitive customers were most likely to jump ship. Marketing found that these customers would be most likely to switch if they made a direct comparison of offers on rates and billing-cycle options. The decision maker was typically the business owner, who was more concerned with price than aftersales service quality. In response, marketing redesigned its offers to be much more competitive against its new attackers and built a web-based rate-comparison tool. Sales reps could then direct customers to use the tool for assurance that they were getting the best deal and thereby drive higher retention rates.

For this segmentation approach to work in practice, it had to be embedded across marketing and sales along the customers’ life cycle. Marketing developed the segment strategy and the tailored, quantified value propositions along with the segment-specific sales and marketing campaigns. Sales used the classification to determine the best approach for retaining existing customers and acquiring new prospects. Critically, sales also fed back its findings from the field on which tactics worked and which did not. The result: the segmentation approach helped the company deliver on its revenue target.

If marketing and sales do not collaborate like this, companies do not just risk missing out on sales; they risk becoming irrelevant in their markets. Invoked in the same phrase as easily as salt and pepper, the two functions—and the leaders who run them—share responsibility for generating growth. Yet for all the shared responsibility, the marketing and sales relationship has often been a contentious and lopsided one, with sales dominating in B2B sectors and marketing leading in B2C.

Technology, more demanding and sophisticated customers, and proliferating channels are combining to fundamentally alter the traditional purchasing journey, and this requires sales and marketing to come together. Failure to collaborate is outmoded at best and dangerous to a company’s performance at worst. The opportunities afforded by big data and the complexities of connecting with customers in more granular ways require integrated and collaborative models that bring marketing and sales together.

When both sales and marketing punch above their weight, companies achieve above-market growth. We analyzed 150 companies across B2B and B2C sectors. Companies that claim to be good at both sales and marketing grow faster than those that are good at either sales or marketing. So far, so unsurprising—the more areas a company excels at, the more successful you might assume it would be. The difference is stark, though. Only a third of companies with strong sales capabilities but self-confessed weak marketing have above-market growth. A little under half perform well with better marketing but weaker sales. But 61 percent of companies with both functions firing deliver above-market revenue growth, and this group also sees the highest profitability (Figure 11.1).

Our research also shows that there are clear benefits in both functions having clearly defined value-added roles, and in effective collaboration between marketing and sales. By effective collaboration, we mean working together to discover insights that matter, designing the right offers and customer experiences based on those insights, and then delivering them effectively to the right people across multiple channels.

Despite the clear benefits of collaboration, even marketing and sales executives confess that they fall short of the mark. In a global survey of 1,000 executives from both functions, just under half are satisfied with the support sales receives from marketing, although (unsurprisingly) marketers have a higher opinion of the value they provide than their counterparts in sales. This holds true across various areas of collaboration. Overall, executives rated marketing most highly for delivering customer-level insights and competitive insights and in developing sales-pitch material / sales collateral. They were less impressed by marketing’s contribution to lead generation, although this was the area where executives at fast- and slow-growth companies differed the most in their assessments.

Another reason for marketing and sales to collaborate is that customers expect sales reps to be extremely knowledgeable about their business and their own personal profile—even more so if the purchaser is a millennial who has grown up sharing his or her life online. Buyers now jump across channels and start their purchasing process at different stages. In fact, our research shows that, on average, a B2B customer will regularly use six different interaction channels throughout the purchase process, and two-thirds come away frustrated by inconsistent experiences. As Lynn Vojvodich, CMO of Salesforce, succinctly puts it, “A customer doesn’t care whether you work in sales or marketing or service. They just want a common experience with you.”

The notion of a customer decision journey (CDJ) around which marketing and sales collaborate has become embedded in many leading sales organizations, and companies across industries are moving toward journey-based sales strategies. A key aspect of the CDJ is that the journey differs by customer segment, with needs and expectations varying at each stage. With insightful customer research and advanced analytics, these segments can be defined ever more precisely, but marketing and sales must work together to ensure that their segment-specific strategies reach the right people. This includes the critical process of reallocating sales and marketing resources to the activities most likely to influence decisions. Organizations need to build trust between marketing and sales. In another survey of 750 executives, the data suggests that, overall, this trust is lacking; yet it is essential to bridge gaps in strategic alignment and tactical execution.

In our experience, there are three specific actions that leading organizations take to bring marketing and sales closer together:

1. Capitalize on a company-wide understanding of buyers’ needs. Great sales leaders work hard to align with marketing (and other departments) to make sure everyone knows what buyers want and how they want to buy.
2. Smooth the flow of insights between the field and marketing. Both functions generate enormous volumes of valuable data on customer segments and preferences, but the flow of those insights tends to be one-way. At outperforming companies, the front line reports back to help marketing refine its value propositions.
3. Collaborate to influence the journeys that drive repurchase and loyalty. Repeat business is profitable business and, in leading commercial organizations, marketing and sales combine forces to generate enviable loyalty rates.

Capitalize on a Company-Wide Understanding of Buyers’ Needs

At leading companies, marketing and sales are aligned so that both understand precisely whom they are targeting and the journey those buyers are making.

Marketing may work this out, but if sales is not on the same page, all that work will be useless. This happened at a logistics company that started off in the right direction. Marketing defined its ideal customer: companies that were potential customers and that needed to send packages weighing between one and four kilos. It developed a campaign targeting tens of thousands of leads that fit that profile.

It all seemed great on paper, but there were challenges when it came to implementing the plan. First, marketing failed to qualify the leads, which resulted in the sales force wasting time calling prospects that were not attractive. Second, marketing also failed to create the right marketing material, tailor the value proposition for the target customer, or train the sales force on how to deliver the value proposition that did exist. As a result, there was a lot of inconsistency in the field in how the strategy was executed, with each rep creating separate presentations. Finally, the campaign missed the point of what customers valued: timely performance. Instead, it focused on ‘automatic refunds’ for late deliveries, which made customers even more cautious about using the company’s logistics services in the first place. The lack of alignment was disastrous.

Best-in-class companies start by mapping customer decision journeys by segment. This requires gathering insights from multiple internal and external sources. It might require customer surveys, focus groups, and sometimes even one-on-one interviews with buyers to complement data-driven market research. Findings can be paired with knowledge from other functions, such as R&D or finance, to determine how variables such as price, delivery times, or product features will affect purchase decisions. In this way, many leading suppliers identify previously submerged market segments and see win rates rise by 20 percent and revenue from priority accounts by 25 percent, while sales costs fall.

A financial-services company learned that rapid business growth was a key driver of customers adopting more of its services. In conversations with sales reps and with customers, marketing managers created a robust database of internal and external customer data in order to segment buyers. Detailed analysis revealed that the company should treat established high-growth customers differently from new entities. Both needed business support, but the latter group also needed help to build infrastructure rapidly and at scale to support their growth. This more nuanced understanding helped the company realize that, although the new entity was delivering high growth, it was a segment in which the financial-services company was actually losing share and was far from maximizing its share of wallet. The information on the sub-segments helped marketing better tailor the value propositions and develop a program to close the gaps in both market share and share of wallet to its other segments.

Disciplined mapping of value across customer journeys is critical if marketing and sales executives are going to turn a profit. For example, at one industrial company, the most profitable customers were actually its “no frills, no hassle, lowest price” buyers, who just wanted to fly through the purchasing process quickly with minimal fuss and interaction. The chief marketing officer and the head of sales had realized up front that this segment needed a completely different, lean, go-to-market approach. They decided marketing for this segment should be digital only and that customer acquisition and retention should be done using lower-cost digital channels; where an inside sales rep was needed, the job would be outsourced to an offshore provider. Aftersales services would also be predominantly online, with customers “self-servicing” through social media or forums. Without this approach, the company simply could not afford to serve the no-frills segment. This kind of deep understanding of segment preferences and sources of value is the starting point for marketing and sales to chart a course of action together.

In another example, the marketing and sales department at a large construction-materials company was doing what it did best: nurturing longstanding key accounts and keeping tabs on new opportunities within two of its biggest customer groups—the government sector and commercial real estate developers. This sales-forward approach focused on generating and qualifying the lead, making the pitch, and closing the deal. It had served the company well. A new CEO thought the company could do better, and she asked the chief marketing officer and the head of sales to rethink how to boost lackluster revenue growth.

The head of sales asked his commercial leaders to analyze the customer base and interview key customer executives. He came away with a better idea of where to focus resources to beat the market. To win in the public sector, for instance, the company realized it had to broaden its appeal and court relationships—not just with public officials but with local distributors as well, since interviews had shown that facilities managers often turned to local distributors for recommendations and advice during their research. This insight told the sellers not only where and when to redouble their relationship-building efforts, it also told marketing where to pull back—such as in trade-show spend, which had little influence on the buying outcome. The company redirected those funds to develop on-site distributor demos that proved much more effective. Likewise, to help property developers attract premium tenants willing to pay higher rents, the company saw an opportunity to pitch upmarket offerings such as energy-saving materials, which might appeal in terms of both style and cost efficiency. Ultimately, without increasing the marketing budget, the distributor program helped the company improve public-sector sales by 6 percent.

At one bank, the chief marketing officer and the head of sales meet each month to talk about improving different customer journeys. As new products and campaigns are launched, the two executives place a laminated card illustrating the journey at the center of the conference-room table and discuss their insights about what different segments value and how the various functional groups need to contribute to satisfy them. For example: Where does customer data need to be captured and reused later? What will the customer journey look like if the buyer starts interacting with the company on social media and then goes to the website on their mobile phone? What is the follow-up experience once a customer sets up an account? The two leaders’ first wave of fixes and new programs generated tens of millions of dollars in the first six months, and they expect it to continue scaling beyond $100 million in added annual margins.

The sales team at a global industrial company was aware of aggressive new competitors in one product area and feared a new round of discounting. The team alerted colleagues in marketing, who quickly dug into customer data and identified purchasers that often bundled those products with their orders and were therefore most likely to demand discounts. Working with finance and supply-chain colleagues, marketing and sales devised new ways to improve ease of ordering and fulfillment speed—faster credit checks, for example, and automated reminders for customers whose inventories were estimated to be low—which delivered extra value for this segment. This evolved the company’s value proposition beyond just price and allowed the company to sidestep a possible price war.

Smooth the Flow of Insights Between the Field and Marketing

Neither marketing nor sales should operate in a vacuum, but neither should the engagement between them be one-way traffic, with marketing feeding sales. Sales should also be talking to marketing, and marketing needs to listen to sales reps. This feedback loop is crucial to uncovering what customers want overall, as well as helping to determine the next product to buy (see Chapter 12). “You’ve got to listen to the guys who are in the stores, the guys who are taking calls 24/7 and dealing with a customer every two or three minutes,” says Gary Booker, CMO for Dixons Retail. “They really know what the customer wants.”

Sales reps at one industrial company, for instance, were hearing from customers that they were having problems keeping the walls clean in paint shops. Sales fed this back to marketing, which took action by embedding engineers on-site, bypassing distributors. The engineers found that dust was the root cause of the problem and introduced a new system that reduced paint-job defects by 49 percent.

Marketing insights teams that get this right adopt a customer-service mentality, approaching sales reps on the front lines more like customers. From the sales side, teams need to be trained to take the insights generated by marketing and act on them. Introducing a joint metric that tracks the utilization and value add of marketing intelligence reports, for example, can provide a mechanism both for marketing teams to develop relevant business-intelligence reports and for sales to use them. Teams from each function can participate in joint assignments. People are rotated through each other’s departments. In one company, marketing partnered with the sales team in a “commercial war room” to provide support and guidance across the customer journey by doing quick customer analysis and developing tailored proposals that led to crucial wins in the field.

Ideally, marketers and salespeople should both be spending a significant percentage of their time with customers in order to understand their current and emerging needs and to close in on opportunities to serve them better. To institutionalize this feedback loop, leading companies set up processes and incentives for marketing and sales to collaborate continually. Sales needs to give feedback to marketing based on the conversations reps have on products, marketing collateral, campaigns, etc. The best teams have a process that creates a virtuous and constant flow of ideas and feedback loops to develop new ideas, find out what works in the market, and then scale quickly. As we saw in the bank example above, personal chemistry between the heads of marketing and sales is only part of it; the collaboration needs to be built into each department’s fabric.

For example, marketing can build a model that looks at category spend by segment, then target prospects with high spend but low share of wallet based on feedback from sales on why customers buy one product but not another. These new insights mean the model can evolve and sales reps don’t waste time on weak leads or those already locked in with competitors. The marketing team at a US wholesaler partnered with sales to build a sophisticated ‘next product to buy’ algorithm. The model would predict spend, share of wallet, and growth potential by customer and by product category, based on an ideal product basket developed from the spend of similar clients (e.g., midsize law firms in economically similar zip codes). Sales reps would log in on Monday morning to see a prioritized list of leads based on net-opportunity size. Top of the list might be a law firm that was buying a lot of printer paper but no printer ink. The conversation might go a couple of ways: the customer might be buying ink from a competitor, or it might be leasing its copiers and printers on a lease agreement that included ink. Whatever the outcome, the rep had a simple, one-touch option to feed this insight back to marketing, which would adjust the model accordingly to refine and improve the list. The result was a 12-percentage-point increase in revenue growth.

The insights marketing feeds to the sales teams will be of little use if they’re not delivered in a way that sales can use them. There can also be organizational challenges in getting the two aligned: heads of sales tend to set their goals geographically or by industry, while marketing leaders often target market share across buyer segments, making it difficult to have a common baseline for comparing and checking progress. Leaders need to focus on how to create meaningful targets that use the best of each approach.

An Asian telecommunications company found 20 percent of its marketing budget was being squandered in markets with the lowest lifetime customer value. The company shifted resources to its most lucrative markets, where two-thirds of the opportunity lay. Marketing then partnered with sales to reset customer-acquisition goals at each micro-market basing them on each market’s potential. They set and met revenue targets that were 10 percent higher than in previous years.

The CMO and head of sales should take the lead in pulling their departments together to jointly identify the best growth opportunities and translate the resulting insights into tools and plans the marketing and sales teams can use. One important way to focus the effort is by managing the sales pipeline together. “It is very important for the head of sales and the CMO to have ongoing discussions about pipeline strategy and how the pipeline gets built,” says Linda Crawford, former executive vice-president and general manager at Salesforce. “People nailing that are taking the lion’s share of the business these days.”

We have found that when this process works well, marketing often takes on an expanded role by, for example, providing sales with data analytics and by supporting the development and testing of sales plays for a specific micro-market or customer peer group.

Collaborate to Influence the Journeys that Drive Repurchase and Loyalty

If there is one business opportunity that best-in-class companies make sure they capture, it is renewing customers and gaining their loyalty. Repeat customers are more profitable customers. In companies that proactively develop loyalty and customer-retention programs, it is marketing that constantly drives the programs, hand-in-hand with the sales teams.

In some industries, loyalty is almost locked in from the start. Insurance companies enjoy an average customer-retention rate of 84 percent. They have made contract renewal very easy for the customer by essentially automating it to the point where it becomes a forgettable transaction.

Loyalty is certainly not just the preserve of B2C companies, though. High-tech hardware-maintenance service contracts are often lucrative for the OEMs, and best-in-class companies enjoy renewal rates of 80 to 90 percent. As one commentator explains, “A B2B loyalty program is, after all, built on the foundation of using data to enrich the customer experience in order to build long-term relationships.”¹

Sometimes, B2B loyalty programs are as simple and successful as Finnish engineering company Kone’s invitations to customers to tour its underground elevator research facility, or corporate air-travel reward programs from airlines.

In most sectors, marketing and sales combine forces to understand why customers would leave and to create customized experiences so finely tuned that once a customer is on the path, they are irresistibly and permanently engaged. This takes sophisticated analytics and a robust understanding of customer lifetime value and purchasing journeys to understand what will have the most appeal. Trying to make the customer experience ‘sticky’, so that customers become and stay loyal, is a role for both marketing and sales.

Amazon gives us, quite literally, a prime example. Its long-standing membership scheme, Amazon Prime, has been running for more than a decade now in the US. Prime customers pay a membership fee in exchange for faster and free delivery and access to instant video and a lending library. In the US, 40 percent of customers are now Prime members, and three-quarters of them shop at Amazon at least two or three times a month, while less than a quarter of nonmembers are that loyal. The result is that Prime members in the US spend $1,500 per year on average with Amazon compared to $625 per year for nonmembers, according to Consumer Intelligence Research Partners, and the longer they are members, the more they spend.²

The scheme has evolved over the years as Amazon tries to lock in its most profitable customers. Indeed, the membership fee means that only regular customers are likely to find it worthwhile, but once in the program, the benefit of free shipping is more valuable the more they use it. Although Amazon does not publish renewal rates for Prime customers, research suggests it could be as high as 95 percent.³ The company has adapted the products for specific groups, such as parents (Amazon Mom/Amazon Family, Amazon Student, etc.) with very targeted promotions around repeat purchases.

Amazon even made its loyalty program national news. In 2015, Prime Day was a headline story garnering $20 million worth of free media coverage and delivering enormous sales, far outstripping Black Friday of 2014, with 398 items bought every second. Perhaps the most interesting achievement was that more new members tried Prime than on any previous single day, and estimates suggested that a staggering three-quarters of Americans had heard of Prime Day by the time it happened. Hundreds of thousands of new members enrolled in Prime to be eligible for the sale, adding to the roughly 40 million current Prime members.⁴

Such one-off marketing events will only be truly successful if they are linked to profit drivers and specifically to the most profitable programs. In Amazon’s case, Prime Day was less about a sudden sales spike and more about pushing enrollments in Amazon Prime with the long-term sales-growth benefits the company knows that brings.

Locking in customers also means understanding why they might leave. Predictive modeling can help companies determine which customers tend to churn and are thus at risk, but it works only if the sales force gets the list of potential defections in time (for example, a customer at risk of churning should be flagged when they contact the service center), and with clear suggestions of how to counter the move.

The marketing analytics team inside a global chemicals company built a predictive model based on more than 30 variables to try to reduce its SME customer churn. It identified ten key factors that pushed customers away and also realized with a shock that the most important 15 percent of its customers were actually three times more likely to purchase elsewhere. Each regional sales manager swiftly found a list of at-risk customers on his or her desk with guidance on what approach to take. One key finding was that the more products a customer had, the less likely they were to leave—cross- selling mattered. In fact, this was a stronger driver of customer loyalty than price changes. Overall, the company reduced churn by 25 percent.

As data becomes more readily available and easier to crunch, companies can move from broad-based predictive modeling to a much more personalized approach. Information from past interactions with a customer or from existing sources can be used to instantaneously customize the buyer’s experience. Amazon’s recommendation engine and intelligent reordering algorithm (it knows what printer ink you need) are familiar examples. But remembering customer preferences is only the beginning; true personalization is the next wave in a customer’s journey.

L’Oréal’s MakeupGenius app allows customers to try on makeup virtually and delivers ever more personalized real-time responses. The app photographs a customer’s face, analyzes more than 60 characteristics, and then displays images showing how various products and shade mixes achieve different looks. Customers can select a look they like and instantly order the right products online or pick them up in a store. As the app tracks how the customer uses it and what she buys, it learns her preferences, makes inferences based on similar customers’ choices, and tailors its responses. L’Oreal has created an enjoyable experience that quickly and seamlessly leads the customer along the path from consideration to purchase and, as the degree of personalization increases, into loyalty. With 14 million users already, the app has become a critical asset both as a branded channel for engaging with customers and as a fire hose of incoming information on how consumers engage.

Personalization extends to knowing where a customer is at any given time—in some instances, quite literally. For example, an airline app may display your boarding pass as you enter the airport. In a virtual sense, it means knowing which channel you’re using and what you’ve already accomplished; for example, a retail site may tell you the status of your recent order the moment you land on the homepage.

Another technique to reinforce loyalty occurs through ongoing experimentation and active analysis of needs, technologies, and services in order to spot opportunities to extend the relationship with the customer. The goal is to identify new sources of value for both the company and consumers. Best practitioners design journey software to enable open-ended testing. They continually do A/B testing to compare alternative versions of message copy and interface design to see which works better, prototype new services, and analyze the results, aiming not just to improve the existing journey but to expand it, adding useful steps or features.

A journey innovation may be as simple as Starwood introducing a prompt for ordering room service after a guest uses a key and remembering previous orders and using them as the initial options. Or it may be more sophisticated, expanding a journey by integrating multiple services into a single, straight-through customer experience. Delta AirLines’ mobile app, for example, has become a travel-management tool for almost every aspect of an airplane trip, from booking and boarding to reviewing in-flight entertainment to ordering an Uber car upon landing, encouraging passengers to stay on the airline’s digital channel.

Solar-electricity provider Sungevity uses both these elements to create a valuable and evolving journey that drives sales and makes customers loyal. From initial customer contact to installation and beyond, Sungevity has automated most steps of the journey even to the extent of creating visualizations of solar panels on a potential customer’s roof. It pulls data from other providers, such as Google Earth and the real estate service Trulia, to assemble a picture of the customer, and it can then send personalized information such as costs, timeline, and anticipated savings, all available across multiple channels. The right content is sent to the right channel for each interaction—for example, software tracks the panel installation by the company’s local contractor and then regularly updates the customer’s landing page with the latest status.

Sungevity then extends the customer’s journey into energy storage and conservation services. Not long ago, such activity might have been a generic upsell, blanketing a customer segment with pitches for a new offering. Today, the outreach can be to a single individual, and the strategy is not simply to sell another product but to invite customers to take the next step on their own journey to more cost-effective and environmentally friendly energy. With granular data on each household’s energy use and habits, Sungevity can give personal advice on managing energy consumption and recommend a tailored package of products and services to help reduce usage. Ultimately, the firm plans to integrate its services with home-management networks that can automate energy conservation (adjusting lights and heating, for example) according to decision rules that Sungevity develops with each customer.

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Companies that have reunited marketing and sales outperform their peers. Aligning the two functions around the specific needs of ever more refined customer segments lets companies deliver value propositions that will convert leads into sales and customers into loyal advocates. In the interviews that follow this chapter, Essent’s Patrick Lammers shares how marketing and sales collaborate in his company to drive sales through new channels; Andrew Clarke of Mars talks about marketing and sales combining forces to grow entire product categories, and Alan Gershenhorn from UPS explains how collaboration helps his company refine its value propositions for industry-specific customer segments.

However marketing and sales coexist, it is critical that marketing gives sales its insights in a form it can use—and that marketers listen to the feedback sales provides from the field. Both groups must share a focus on profitable sales growth. Finally, understanding how marketing should help sales drive repurchases can have the greatest impact of all, as loyal customers are the most profitable.

Technology is always part of the solution to better collaborations but as the next chapter explains, there are many other aspects of selling where a technological advantage is critical.