Sales and marketing are the only two functions to have the same revenue generating charter but do not work together effectively in many organisations, argues Neil Rackham, academic, author and sales consultant to IBM, Xerox and AT&T.
Speaking at a recent event hosted by the Chartered Institute of Marketing affiliated Sales Leadership Alliance, Rackham said that handing marketers oversight of transactional and consultative sales would boost company performance.
Marketers, he continues, are responsible for many of the revenue generating components required to generate transactional business – direct marketing, advertising and brand building campaigns, for example – so handing them responsibility for transactional sales would not be a huge leap.
“One can argue that marketing has created the demand for transactional purchases as customers now have access to all the product information online. They are also aware of the brand as a result of the marketing campaign,” he adds.
If they did assume responsibility for transactional sales , Rackham says, they would need to be given sales quotas and would have to use the same metrics as sales teams.
“Some companies including IBM and GE Solution are starting to do this. GE Solution has split its marketing into ‘upstream’ and ‘downstream’ groups – while the upstream group focuses on product development, the downstream group focuses on working with the sales force.”
Large scale consultative selling, a sales approach that matches products and services with customer needs as opposed to using traditional pushy selling tactics, is too expensive to be the responsibility of the sales team, Rackam says.
He adds the key to sales profitability is “pulling the plug” on unsuitable business.
“Sales people are not strategic enough to make these decisions. They are not able to make an informed decision and select the right opportunities.
“Marketing on the other hand can create a lot of the tools and wisdom which can help the sales team to add value and select the right opportunities in the consultative process.”
His comments are likely to be controversial to many marketers. A call from the Chartered Institute of Marketing, which setup the SLA in 2010, for companies to merge marketing and sales departments or risk damaging bottom line growth earlier this year drew criticism from many.
Some argued that the marketing and sales functions were fundamentally different, with marketing responsible for building sustainable demand for brands and sales to convert this demand into sales.
David Thorp, director of research and professional development at the Chartered Institute of Marketing, says of Rackham’s comments: “For me it all comes down to performance. When sales and marketing functions work effectively together you’re going to see an improvement in the key metrics: sales cycles will tend to be shorter, the costs associated with marketing will go down and the cost of sale is lower.”