KPI Alignment for Sales and Marketing Improves Revenue Growth

To be effective, sales and marketing teams need to operate in a symbiotic, KPI driven relationship. They need a way to learn and communicate with one another so the effort of one is enhanced by the work of the other. Yet the sales/marketing dynamic can often be filled with tension, which can result in poor lead conversion and disastrous effects on revenue.  To avert this, companies need meaningful key performance indicators (KPIs) to understand where breakdowns in the sale-marketing continuum exist.Only 8% of companies have figured out how to align their marketing and sales teams and establish shared KPIs. According to Sirius Decisions, companies that have disciplined and tightly aligned sales and marketing efforts recognized 24% faster revenue growth in a three year period and 27% faster three-year profit growth.

The effort to get sales and marketing aligned can be somewhat complex, but adhering to KPIs and relying on the help of expert partners can improve both lead velocity and effectiveness. Companies can focus their efforts on maximizing effort at top of funnel and bottom of funnel activities while a trusted expert deals with the hand-off, optimization, and conversion of leads. But no one will really understand how effective your efforts are, nor will they be able to analyze and improve them, if there aren’t any measurable data points that identify where failures and successes exist. 

Initial KPIs are about identifying the most important metrics which include those that explain speed, effectiveness, and general performance. Innovative organizations will focus on these measurements:

Velocity of Lead Funnel

Insights into the speed at which sales and marketing teams acquire, convert, and close leads is critical to alignment effectiveness. Understanding lead workflow helps teams determine where and how bottlenecks are preventing better, faster outcomes. To measure how well and how fast leads are worked through the funnel, follow these steps:

  • Identify criteria for each phase of the funnel: this may include MQLs, SALs, SQLs, Opportunities, and Closed-Won deals; or it may be some unique mix of qualifiers. You may also choose to include milestones that are based on CTAs, like “Meeting Scheduled” or “30-Day Trial Completed.” Be clear about what defines each step so you can measure each step.
  • Determine a reasonable timeframe for stage advancement: you’ll want to get the sales and marketing teams together to come up with a timeframe for each stage, who is responsible for managing each stage, and how long a good lead should take to move from one to the next stage.
  • Look for breakdowns: some stages may advance with great speed, while others may be stalled. This could be because some stages simply require more time, or it could be that there is a breakdown between the efforts of the teams involved. Look for patterns and quickly identify how to remove barriers.

SQL-to-Close Rate

Knowing the rate at which SQLs close is directly related to both sales effectiveness and lead targeting. Both help determine if sales is achieving its most important KPI: closing the qualified leads they are receiving. Another thing to keep an eye on within this area would be why highly qualified leads are lost – do they stop responding? Are you getting beat by competitors? Or, is there some other factor? Armed with the knowledge of SQL-to-Close rates, teams may come to identify, and ultimately fix, issues around things like:

  • Lack of definition for qualified lead: this often happens when marketing is finding the wrong types of leads, or sales reps accept leads based on criteria different from that which marketing is using.
  • Poorly defined handoff between marketing and sales: this might indicate that marketing and sales are not totally clear about where the handoff exists and the protocols for handling it.
  • Ineffective SLAs: either there are no SLAs for moving leads through the process, or one team or the other is not managing their agreed-upon timelines.  

Content KPI

Aberdeen has said that 62% of companies prioritize lead generation as the primary objective of their content strategy. But if the content isn’t targeted, and if it’s not in the right channels, then it can’t be an effective tool for marketing OR sales. Companies need to use the analytics tools available to them (Google Analytics, Hubspot, Marketo, or others) to understand and develop KPIs around the following:

  • Themes and topics: use SEO, Google Analytics, or other tools to understand if your prospects even care about the content you’re producing. It may be great content, but it might not be targeted at the audience you want to reach. Get sales and marketing together to inform one another which topics prospects are most interested in.
  • Asset types: you may be working a target audience that loves to consume videos, yet you keep pushing infographics at them. Back out of the data to see differences and similarities among the different content assets you use in your outreach efforts.
  • Variety: remember that people want different types of content for the different points of the buyer’s journey. If all you have is top of funnel content, you’re likely not going to get much engagement as the customer moves further down the pipeline. In fact, he/she may not bother to move very far.

Ultimately, sales and marketing alignment is about a shared KPI, one that is critical to the future of any company: increase revenue and create lasting customers. Tension between sales and marketing towards that goal is not a bad thing, but it’s important to have a way to measure how well or poorly they are collaborating in order to meet their challenges as a united front.