How efficient is your revenue engine?

Every piece of equipment has a weak link, and in the case of small/medium companies, that link is the contact point between marketing and sales. It is right here where most breakdowns happen, and it hurts business performance. 

But why is this? 

It is underpinned by the fact that both sales and marketing are after the same thing - the actual sale. The two are supposedly in partnership, but more often in competition to win the ultimate prize. This one goal, split between two business functions, makes it easy for the finger-pointing to happen. Marketing takes a big picture, right-brain approach to sales, and the sales function takes a microscopic, left-brain approach. To ensure an efficient sale, both functions must work together, yet infighting often spoils the party. Together, these two functions form the revenue engine of the business.

An inefficient revenue engine is particularly common within medium-sized companies since separate marketing and sales departments have now been established but they have not yet found a happy equilibrium. A period of infighting is inevitable, however, this should be cut short since the business suffers in the process. A medium-sized business can't afford to slack since there is still plenty of growth to be had. Market share has not yet matured but the competition is warming up. The revenue engine needs to quickly find its purr.

To ensure an efficient sale, both marketing and sales must work together, yet infighting often spoils the party. 

Moving a prospect quickly and profitably through the purchase funnel, from awareness to interest to trial and finally, a sale requires teamwork between marketing and sales teams. Using both these approaches is a recipe proven over decades to be the most effective at unlocking profitable growth. You need both mass-market communication, and individual negotiation skills, to get the best deal. The one broadcasts a compelling value proposition; the other tailors it to individual customer needs. It is this one-two punch that beats the competition and wins the game.

An efficient sale is one where the effort to make a sale is as little as possible whilst the long-term value of the sale is maximized. I see this as different to a pure profit calculation but rather an indication of overall effort versus financial return, discounted over the lifetime of the customer relationship. The overall effort includes monetary cost but also time invested and even emotional energy. In short, the goal must be to maximise the overall ROI of a sale. 

The efficient sale

Making a sale is like fighting a battle. Whilst you can win the fight by merely pushing troops into the field, the body count will be high. This is the "sales only" approach most small businesses take. But then marketing joins once the business achieves mid-size status and acts like an airforce that weakens the enemy from above before the sales-troops get sent in for hand to hand combat. In combination, the two will win the battle, as long as their efforts are coordinated.

To achieve such coordination requires three critical steps. Firstly, it requires a business leader with an appreciation for both marketing and sales as the answer to revenue growth. Too many are still sceptical of the role that marketing can play and settle for a half baked effort that depends on a junior marketer to vigorously post to social media and hope for results. This type of marketing won't work.

A medium-sized business can't afford to slack since there is still growth to be had. Market share has not yet matured but the competition is warming up. The revenue engine needs to quickly find its purr.


Furthermore, the sales department, which is almost always established before the marketing department, must have seen the writing on the wall at achieving increasingly steeper targets as the competition creeps up and low-hanging sales fruits are already picked. When this happens a natural response will be "we need marketing!"

Finally, the rules of engagement between sales and marketing must be developed by a senior manager who understands the role both functions should play and who has authority over both. Admittedly, getting the initial structure arranged may sometimes require help from an outside consultant. Ultimately, the only way that marketing and sales will work together effectively is if they are attached at the hip, and know it. If the one stops swimming the other must also sink. Making this connection tangible inside the company is crucial. 

There's no doubt that marketing and sales are needed to optimise business performance, and yet the interaction between the two siblings are often fraught with tension. Yet, as companies navigate the turbulent waters of medium-size status they must strengthen the bond between marketing and sales to reach the promised land of full-blown corporate status, a listing on the stock market or a favourable merger/acquisition. 

At some level, a business is undeniably a money motor, and like any engine, it needs careful tuning to reach a steady purr and ensure a smooth ride. The rattle that is often the result of poor marketing/sales interaction must be sorted out quickly!

Is your business running as an efficient revenue engine?

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