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A few days ago, Marketing Automation Software Guide published an article by Mike MacFarlane on integrating CRM and marketing automation systems.
Mike raises a very good point because in most companies sales folks (the CRM users) and marketing folks (users of marketing automation systems) don’t see each other eye to eye.
Sometimes they are plain enemies and screw up each other’s work in any way they can.
And in my experience, the antagonistic relationship stems partly from the difference in expectations and compensations.
Let’s Look At Expectations First
In most IT companies marketing folks don’t really have many expectations. As long as they show up at work as expected, go through the day looking impressively busy and every now and then show some visually impressive stuff to their bosses, they are successful.
The fact that over 80% of the sales leads they generate and some 65% of the collateral materials they create are useless for the sales folks goes totally unnoticed.
All in all, in most cases, marketing folks are not for contributing to revenue-generation.
Actually, in most companies no one, besides the sales folks is responsible for revenue-generation. The funny thing is that at the same time, cost cutting is rewarded so generously as if it were the ultimate profit-improving solution.
Well, it’s not.
And what happens in the sales department? Salespeople waste a hell of a lot of their time and energy to generate their own quality leads and re-create useful collateral materials.
Although, in many companies it’s corporate policy not to allow sales folks to use anything but what marketing has created, even though it doesn’t work.
Anyway…
At the end of the financial quarter, if the numbers fall short of projections, some salespeople get fired and the rest get threatened with being fired next month.
And for those salespeople who reach their quotas, commissions and territories are reduced and quotas increased.
And what happens to the marketing folks who so effectively contributed to the underperformance?
Nothing. Not a sausage.
Some of them may even win some awards which come with financial rewards.
And this reminds me of a joke I read on British copywriting legend, Drayton Bird’s blog the other day…
The Marketing Departments of two rival American and Japanese companies decided to hold a boat race. Both teams practised hard and long to reach their peak performance levels until both teams felt they were ready to demonstrate their prowess.
The big day arrived, and the Japanese won the race by a mile. The American team was discouraged by the loss. Morale sagged. Corporate management decided that the reason for the crushing defeat had to be found, so they hired a consultant to investigate the problem and recommend corrective action.
The consultant’s finding: The Japanese team had eight people rowing and one person steering; the American team had one person rowing and eight people steering. After a year of additional study and millions spent analysing the problem, the consultant firm concluded that too many people were steering and not enough people were rowing on the American team.
So as race day neared again the following year, the American team’s management structure was completely reorganized. The new structure: four steering managers, three area steering managers, and a new performance review system for the person rowing the boat to provide work incentive.
Again the big day dawned, the race began, and the Japanese team won by TWO miles. Humiliated, the American corporation laid off the rower for poor performance and gave the managers a bonus for discovering the problem.
In this case, I would say the rowers are the sales folks and the steerers are the marketers.
And Now Look At Compensation
You can’t integrate two departments with two different expectations and compensations.
The company may focus on long-term success and encourages team work, but pays the salespeople based on short-term individual performance.
So, salespeople sell, even at huge discounts because their commissions are based on gross revenue not on net profit. So, in order to make the sale, salespeople often sell their stuff barely above costs. Or often below cost.
This is why semi-bankrupt companies, like General Motors car dealerships, have very well-paid salespeople.
People think since salespeople they make good money, they must sell a lot, and the company must be successful. But then why is GM on the brink of bankruptcy? Something doesn’t add up.
It’s the short-term focused salespeople who use CRM systems and the long-term focused marketing folks who use marketing automation systems.
Yes, technical integration is possible, but we have to integrate on a human level too.
So, how to pull that off?
We have to unite the sales and marketing departments into one seamlessly integrated business development department. This is the only way to run business development as one united team not as a bunch of individuals.
We have to develop one single compensation method for everyone in the department. And in my experience, this compensation can’t be commission or hourly wage.
Commissions promote peddler behaviour going for the quick sale and the hourly wage promotes incompetence.
So, what I suggest is a base salary and a bonus system based on total company-wide revenue.
In this system everyone knows that the team wins or loses together. That’s why it’s a team not a workgroup.
And what happens if some people don’t pull their weights?
The same what happens in the military. Team members visit the slackers and “explain” to them that either they pull themselves together or pull out. Yes, sometimes the explanation can be a bit more than the dictionary meaning of “explain” but it works and there is no need for the higher authority to interfere.
A Note For The Sceptics
Some people may say that unless there is a financial incentive, people will merely show up but won’t give their 100%.
That may be true for manual labourers, but knowledge workers regard their work differently. And sales and marketing folks are knowledge workers. The result of their work is the effective application of their intellectual property.
Just one point to consider…
Have you ever seen manual labourers take their work home and work on it over the weekend?
For most knowledge workers it is perfectly normal practice.
Jon Katzenbach has a great section in his book, The Wisdom of Teams…
“Pride is a more effective motivator of professionals’ talent than money. And you can motivate that with pride in more than just belonging. There is pride in the specific work product that you deliver to clients, pride in the kinds of clients that you serve, pride in the expertise that you can apply, pride in the values of your firm.”
And this is why companies with unethical practices and low quality clients very quickly lose their best people.
Knowledge professionals don’t work for money. They work for pride, fulfilment, joy and contribution. We know from David Maister that we can’t make money by chasing it.
Interestingly, the less chasing knowledge workers do, the more money they earn.
So Why Is This Integration Thing So Important?
Briefly, it is important because a well-integrated team of cross-trained professionals can far outperform an army of individuals.
And at the end of the day it’s not what you make (gross revenue) but what you keep (net profit) that matters.
More accurately, net profit per employee.
Look at it this way…
Based on data from Google Finance, at $1,080,914 revenue per employee and $209,624 profit per employee Google is the best performing high-tech company (19.3% pre-tax profit).
Hewlett Packard, a much bigger and older company than Google, at $368,735 revenue per employee and $25,947 profit per employee is pretty close to the bottom of the pile (7.03% pre-tax profit).
What we can also see is that Google ($33.51 billion in assets) is an asset-light knowledge-based company, while HP ($109.63 billion in assets) and IBM ($101.95 in assets) are asset heavy factory.
Let’s remember what Tim Williams writes in his brilliant book (Thanks to Ron Baker, founder of the Verasage Institute for bringing it to my attention), Positioning for Professionals: How Professional Service Firms Can Differentiate Their Way to Success: There is a difference between growing a business and enlarging a business.
Adding profit is growth. Adding headcount is enlargement.
And the purpose of integration is to produce maximum growth (profit) with minimum enlargement (headcount).
What do you think?