Objective: Make (and document) marketing responsible for at least 20% of company revenue.
Strategy: Develop contests between sales and marketing, implement marketing ride-alongs on sales calls and establish closer ties between the two.
Results: Marketing directly influences 30% to 40% of sales and, at times, as much as 70%
Telephone and Data Systems, the Chicago-based telecommunications service company, knows what happens when sales and marketing aren't aligned: Things deteriorate quickly.
In 2004, the company instituted a process to better align sales and marketing. Over the past several years, skeptical sales reps were not convinced of the program's value until marketing, which spearheaded the initiative, tested its effectiveness by “going dark” with its supporting program.
“Sales would instantly drop 30% in that time period, and we'd quickly get calls from sales asking, "How fast can we get that program up again,' ” said Jennifer Stearns, formerly manager-commercial promotions at TDS and now manager-marketing operations at Accenture.
Stearns' boss, Michele Falkner, supported her in her efforts to build a bridge between marketing and sales.
“Integrating sales and marketing is always a work in progress, something that every company is talking about,” said Falkner, manager-commercial marketing at TDS. “And it's always a challenge because sales has to hit the street running while at the same time buying in to what marketing is doing.
“But there has to be buy-in at each stage of the process,” Falkner said.
TDS worked with Nielsen Co. to develop prospect lists and tools, but realized its sales force automation options were limited.
“Consumer database marketing has lots of tools available and lists that already are segmented,” said Bill Macauley, director-product management at Nielsen Co. “For business data, it has to be customized for the client's needs.”
Developing prospect lists was key to the TDS effort. The company used precise market-area demographics in several Midwest states to assign equitable territories to an outside sales force numbering 130.
A direct mail campaign was augmented with tight sales buy-in; reps were required to make at least three contacts a month with each prospect, and at least one of those needed to be in-person. Since this was initiated, the company has adjusted its contact quotas to reach decision-makers—it's now up to an average of almost 10 efforts at contacting any particular decision-maker. Incentives feed the effort.
TDS has devised metrics on how presentations convert to sales, so it focuses on face-to-face sessions rather than revenue.
“We know that if our salespeople get in the door, our close ratio is very high,” Falkner said.
Prospects are rewarded with gifts such as iPads or GPS units as thank-yous for agreeing to see a rep and receiving a proposal. Meanwhile, the company developed an in-house sales force automation tool accessible by both sales and marketing.
“My staff goes out on sales calls to understand the world of sales,” Falkner said. “We call them "blitz days,' and the ultimate goal is for sales to be successful. But we'll make it competitive. Marketing will make our own calls, challenging sales to make more calls than us. We're putting our money where our mouth is.”
Sales aren't the only ones with incentives and quotas. Marketing actively participates in the sales process, and compensation is tied to metrics. It must directly contribute to at least 20% of the company's revenue.
As the program has matured, Falkner said, marketing's attributable influence actually averages 30% to 40%, although in certain periods its direct influence on sales has ranged as high as 70%.
“I hold everyone on our marketing team accountable to look at our ROI, detailing both the cost of acquisition and the cost to get an appointment,” Falkner said. “Then we look at overall marketing contribution to revenue.”
To address prospects that need further nurturing, the company uses lead-scoring solutions from Eloqua and employs e-mail drip campaigns.
Marketing and sales regularly sit down to discuss each others' activities. From these meetings, marketing develops campaigns directly tailored to sales' needs, such as helping push conversions in a particular stage of the funnel.
In addition to boosting marketing's contribution to revenue generation, the program keeps close tabs on cost-per-customer-acquisition. Both sales and marketing are driven to reduce that by 5% to 10% for each program. But Falkner added that cost-per-acquisition can be a difficult number to pin down.
“When we use lead nurturing, our costs are a lot less than when we use salespeople contacting prospects,” she said. “It's a balance we have to watch, and use both effectively.”