Companies with strong alignment between marketing and sales departments have fared better during the economic recession, reporting higher levels of new customers, revenues, and customer retention than those with low alignment, according to a study by Miller Heiman and Northern Illinois University.
Roughly one-third of surveyed sales executives said their sales and marketing departments work collaboratively; another one-third reported a "state of neutrality" between sales and marketing; and one-third reported no alignment at all.
An analysis of data collected during the 2010 Miller Heiman Sales Best Practices Study found significant value in aligning marketing and sales.
Comparing businesses performance in 2009 with the previous year, the study found that highly aligned companies did better than those with low alignment, across the following six performance metrics:
- Qualified leads: Highly aligned companies were 12% more likely to show year-over-year (YOY) growth of 5% or more in qualified leads than those with low alignment.
- Conversion: Highly aligned companies were 8% more likely to have conversion rates of 40% or more than those with low alignment. On average, highly aligned companies said they converted 29% of their leads into business, whereas low-aligned sales teams converted 24%.
- Acquisitions: Companies with high alignment were 19% more likely to register a YOY growth rate of 5% or more on customer acquisition than those with low alignment. Highly aligned companies reported a 3% increase on average in new accounts, compared with a 0.5% decline for companies with low marketing and sales alignment.
- Retention: Highly aligned companies were 11% more likely to see a YOY growth rate of 5% or more on their retention of current customers than those with low alignment.
- Average billing per customer: Highly aligned companies were 8% more likely to increase their billing 5% or more YOY than those with low alignment. Companies with low alignment reported a 3.5% decrease in average billings per customer in 2009, whereas highly aligned companies' average billings fell just 1.2%
- Revenue: Highly aligned companies were 4% more likely to grow their revenue 5% or more YOY than organizations with low alignment. Companies with low alignment reported a 2.9% decline in revenues in 2009, whereas highly aligned companies' revenues fell just 1.2%
About the data: Findings are from a survey of nearly 2,000 sales executives and managers in the US, Europe, and Asia, who responded to the Miller Heiman 2010 Annual sales Best Practices Survey, Sept.- Oct., 2009. In-depth analysis was conducted by the Northern Illinois University Marketing Department.