Growing in an economic downturn: How aligning marketing and sales benefits businesses

Why the sales and marketing relationship is crucial to company success

Editor’s note: John Blessing is the chief sales officer at Chief Outsiders.

While the U.S. economy has dodged multiple economic recessions in the last few months, many businesses now feel that American consumers are becoming more careful and selective about how they spend their money. Moreover, a look at the current inflation numbers, OPEC’s announced production cuts, the continuing war in Europe and a potential banking crisis leaves little doubt that a recession will not be kept at bay.

CEOs are responding to recession fears by asking their CMOs to double down on demand generation. According to Chief Outsiders, CMOs are (or should be) well-equipped to lead their teams in this effort, but they will be significantly hindered when marketing and sales teams do not work in tandem. The alignment between both groups is also essential in “peacetime,” of course, but the need is even more urgent in an economic downturn.

In a recession, both consumers and businesses find themselves strapped for cash. Companies need to present their value proposition in a way that makes their customers not focus on the price but on the value of the goods and services sold. Since businesses are also short on cash, their marketing effort has to be undertaken in the most economically efficient way possible. Those marketing tactics that delivered a so-so return on investment in the past are abandoned, and whatever has proven to work well receives additional funding.

The relationship between marketing and sales teams: Accountability, communication and collaboration are key

The renewed focus on efficiency can only bear fruit when marketing and sales are well aligned. When both teams talk to one another, the marketing team will tell sales what it will cost to generate leads. Then based on the revenue that the company is pursuing, the average lifetime value of a transaction and based on the knowledge that the sales team has of what the conversion rates through the funnel look like, the sales team will be able to tell the marketing team exactly how many leads are needed to achieve the company’s revenue objectives. 

The marketing team then builds a marketing plan that is geared towards generating the leads needed (within budget), and the sales team builds on that with its plan on how it will keep its end of the deal, turning a sufficient number of leads into opportunities and sales. This is the only sensible way businesses can align their sales and marketing efforts across all B2B and B2C industries.

Sales and marketing should not only agree on objectives but also exchange insights about what they observe on top of the funnel (marketing) and down the funnel (sales). Marketing needs to receive (honest!) feedback from sales on what they are hearing from customers. Marketing needs to provide sales with information on what the target market looks like regarding the changes in demographics, economic conditions and anything happening in the market that customer surveys can provide information on. Finally, there also needs to be shared responsibility and accountability for execution. 

The effort we are talking about is primarily one of process design and culture. Technology in the form of powerful CRMs can play a facilitating role, but it is optional. Most companies that struggle with alignment do so because different teams need to communicate with one another, not because they need the right software.

Working together to generate revenue 

Everything just said about the need for alignment might seem like a massive open door to some but the reality is that, sadly enough, most companies do not have their house in order. For example, HubSpot found that only 28% of salespeople say marketing is their best source of leads with only 7% believing the leads they receive from marketing are very high quality. 

As said, when sales and marketing align well, the revenue growth engine of the company kicks into high gear. LinkedIn found that when sales and marketing teams work together, they can generate 200% more revenue due to their collaboration. 

What is at stake with the alignment of sales and marketing cannot be understated. While coordination between the two is of great importance when the economic outlook is rosy, once the economy cools and businesses and their customers need to tighten their belts, alignment between sales and marketing becomes critical to the company's continued success. 

Communication between the teams, where both agree on the same objectives, exchange insights on customers and share responsibility and accountability for execution, is the only pathway to continued growth.