Important KPIs to Measure Sales and Marketing Alignment

Important KPIs to measure sales and marketing alignment

Today’s sales are about marketing as much as they are selling.

Buyers have already finished most of their decision-making process before they engage with your sales team. According to Gartner, customers are already 57% through the purchase process before they approach a supplier. Forrester Research reports that 74% of business buyers conduct more than half of their research online before making an offline purchase.

Furthermore, a Topo blog post on best practices for building a revenue machine cites a SiriusDecisions poll of 300 sales leaders that found: “The top third of the sales cycle has gone away. Salespeople believe that the beginning of the traditional sales process has evaporated and that buyers are self-servicing their needs instead of engaging with salespeople.”

Your marketing is crucial because buyers form opinions about your products or services largely through your online presence. You can close more deals by developing and nurturing leads through marketing before giving them to your sales team.

“Aligned sales and marketing organizations achieved an average of 32 percent annual revenue growth while less aligned companies reported an average 7 percent decline in revenue,” according to an Inc.com article on why you need to combine sales and marketing. Tightly aligned sales and marketing teams also have 38 percent higher win rates, according to a MarketingProfs article on account-based marketing success.

But sales and marketing alignment requires a deep understanding between two different teams. You must establish consistency to convert leads to opportunities and then customers.

Measure the effectiveness of your sales and marketing alignment with these key performance indicators (KPIs).

Length of the Sales Cycle

Salesforce says that length of the buying cycle is one of the eight sales and marketing metrics that you should include in your dashboard. “For Sales and Marketing, shortening the buying cycle is a common goal. By tracking the length, you can get both teams pulling together, and drag buying times even further in the right direction.” Though you shouldn’t expect to close in just a few days a sale of a high-dollar service that typically takes months to sell, you can measure the effectiveness of your sales and marketing alignment as the buying cycle gradually shortens.

MQL-to-Opportunity Rate

Marketing should recognize a good selling opportunity before your sales team. Knowing what the sales team wants—for example, in terms of a prospective customer’s annual revenues or employee count—helps marketing provide such opportunities.

If marketing qualified leads don’t consistently convert to opportunities, then your sales team will have a hard time closing deals. The MQL-to-opportunity ratio “will let you effectively track and demonstrate Marketing’s contribution to your pipeline,” Salesforce states in a blog post on sales and marketing alignment metrics.

Opportunity-to-Customer Rate

The percentage of opportunities that your sales team converts to customers measures their efficiency as well as the effectiveness of your sales and marketing alignment. The higher the percentage, the better your organization is doing in conveying value to customers, regardless of whether it is being done by sales or marketing.

Content Performance and Usage

If leads are becoming customers, then congratulations. Your sales and marketing alignment is succeeding because you are convincing prospective customers to choose you by demonstrating that you meet their needs and solve their problems at a price they can afford.

But if leads are not becoming customers, you may want to first look at your content for misalignment. Leads could be falling out of your sales funnel because you haven’t adequately addressed all of their concerns or convinced them of your value. “Poor performing content is a sign of poor conversation, and alignment, between your marketing and sales teams,” according to a LevelEleven blog post on sales KPIs for sales and marketing alignment.

End-to-End Conversion

LevelEleven also recommends following conversion ratios across the full sales cycle, from lead to customer. This will provide insight into how well your sales and marketing teams move between stages.

If you know where deals stall, such as perhaps between marketing qualified lead and sales accepted lead, then you can focus on improving alignment in a particular area—for example, by clarifying what your sales team expects in a lead so that marketing can improve the percentage of MQLs that become SALs.

Selling is no longer exclusively the responsibility of sales teams. True sales and marketing alignment has become the best way to build a revenue machine because buyers now get most of their information online before contacting your sales team. Measure your sales and marketing alignment, and improve your effectiveness by tracking and improving these KPIs.

Learn how Conversica can help improve your Sales and Marketing KPIs.

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