Aligning Sales and Marketing
In 2012, Katrina Markoff set her sights on doubling sales of her premium chocolate company within three years by launching a lower-priced brand to be sold by other retailers. Priced from $4 to $5 a bar, the candy is available at retailers such as Whole Foods Market, Wegmans and Walgreens.
The new brand, Wild Ophelia, validates Chicago-based Vosges Haut-Chocolat's success in carving a place in the crowded premium chocolate category with its high-quality ingredients infused with exotic blended flavors.
Vosges, which currently has annual sales of about $30 million, is filling a niche with sales gains that larger, more established companies well might envy and with a collaborative sales and marketing approach others would benefit from, says Carrie Shea, Lombard, Ill.-based president of AMG Strategic Advisors, the growth strategy consulting unit of Acosta Sales & Marketing.
"[Vosges is] small enough that people are talking to each other and working with each other, and departments such as sales and marketing haven't become walled-off silos," Shea says. While Markoff makes it look easy, the rivalry between sales and marketing departments can be a thorn in the side of many larger companies.
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Sales and marketing together drive a business, Shea says, so it is "critical" they are aligned for sustainable profitability and growth regardless of a company's size. This is especially true in today's fast-paced retailing world where shoppers are making "more and more split-second decisions" at the point of sale, Shea says.
To capture consumers' attention, marketing and sales must cooperate, react and adjust as never before. There is a natural–and not always unhealthy–tension between the big picture responsibility of marketing and the more practical focus of sales, says Margaret Lombard, vice president shopper marketing for AugustineIdeas based in Roseville, Calif.
Marketing's efforts to build a brand and create a positive identity do not necessarily correlate with increased sales. And the sales staff, responsible for moving product and meeting company goals, can sometimes be skeptical of new products and company initiatives. The short-term pressure felt by those calling upon customers is seldom felt as intimately by those working on the long view. When the tension descends into stalemate or escalates to outright sibling rivalry, no one wins.
Relations are often most difficult when the two teams have different priorities, says Lombard, who was vice president of marketing for California-based Raley's Supermarkets. To reunite and keep the two sides in alignment starts at the top, she says.
It works best when one person heads both areas and acts as a "benevolent dictator," Lombard says. Sales and marketing efforts are most collaborative–and beneficial–during new product launches where the objective is obvious. "This is mostly because everyone agrees on what should be promoted and both teams need each other," she says.
Supermarket chains and CPGs can go a long way toward breaking down this natural tension by creating a collaborative framework in which sales and marketing work together as much as possible, Lombard says. "Whether it is a supermarket chain or a CPG company, at the end of the day, it is having an understanding and an appreciation of what the other is doing" that builds team effort, she says.
Marketers in executive training will gain a greater appreciation for sales if they attend a client meeting where the sales staffer is given 15 minutes to make a presentation. "They will learn how quickly the time and chance to make the case for a 20-page marketing plan goes by," she says.
Representatives from both marketing and sales should be invited to the annual planning meeting so they have the chance to offer opinions early on about new initiatives. Both should be part of progress-tracking and field trips as well, she adds.
Another critical component to building cooperation can be examining how an organization or company is structured and employees are rewarded, suggests Stephanie Smith, who worked at Kraft Foods for 20 years and led human resources for its largest region before retiring in 2010.
"If it is structured more as a team with marketing and sales each getting a share, and performance is measured as a team and the metric for reward is how well the team performed, you are building reasons for marketing and sales to work together," says Smith, now vice president for human resources at DePaul University in Chicago.
The advent of scanners and industry consolidation is altering some marketing and sales roles, says Daniel Strunk, executive in residence and managing director of the Center for Sales Leadership in the department of marketing at DePaul University in Chicago.
Where once vendors were the major sources of research on consumers, today retailers are on the front lines of data gathering about shopper preferences and buying habits. CPG sales staffers must do more today than try to persuade a supermarket client to try a product or line. They must be active partners in trying to understand buyers' needs and help answer those needs to create value, he says.
The old model of sales persuasion "takes you only so far," he says. Today's sales professional is a conduit of information both to the client and to his employer. Today's sales person is "the company or brand representative to the customer [or] client and at the same time is the representative of his customers to his employer."
Not only are retailers trying to align sales and marketing internally, but many also are actively pursuing collaboration with vendors "seeking insight and advice," he says."Not to collaborate is wasted effort."
Progressive companies such as Coca-Cola, Kraft Foods Group and Starbucks are responding to this changing landscape with a variety of measures. Some involve rotating employees through both sales and marketing assignments, re-evaluating traditional career paths and inviting retailers earlier into new product development, says Barbara Ford, senior vice president at AMG Strategic Advisors.
Collaboration starts with the retailer who has a "very tangible" need, says Shea. The retailer needs to be focused and identify the problem or opportunity. For example, "I need to drive the sales in aisle four." Then, be open to sharing ideas and information across departments and with vendors to find a solution, she says.
"Walmart has done it well," says Ford. "It listens to its consumers and then creates the event or products to answer the need. It requires a different dialogue than has been in CPG [companies] and supermarket retailers in the past."
Walmart is not alone in creating a winning sales alignment, however. Ford cites the success of Milwaukee-based Roundy's, which built back-of-the-store sales near the pharmacy after manufacturer data from Clorox identified a gap between what customers believed would keep families healthier and their actual behavior. Research indicated 70 percent of consumers believed disinfecting surfaces would keep their families healthier, but only 46 percent did anything about it.
Working with AMG and using Clorox's "Prevent, Protect & Soothe" in-store display program as a core, the Wisconsin-based retailer pulled together Campbell's soup, Kellogg's cereal, Brita water filters and Dial soap with Clorox disinfecting wipes, bleach and Clean-Up cleaner in a display near the pharmacy for an October through January cold and flu-season promotion.
The promotion was used in 140 of the company's 158 stores in the Upper Midwest from the Twin Cities to Chicago. By grabbing consumer attention and providing convenient, one-stop shopping to shoppers, the retailer got a sales lift as did the manufacturer from bundled products, Ford says.
The metric for measuring the success of marketing and sales alignment is ultimately sales, Lombard says. Chocolatier Markoff agrees. "Honestly, you are failing if you aren't selling," she says. "Most of the time you should be creating buzz and giving a brand soul."
Marketing also plays a role in generating awareness and generating the next big idea. "Revenue in the end is a key indicator of success," Smith says. But other considerations also are important, such as: "What is the use to the consumer? What is the consumer wanting? Those are important questions that should be answered in every effort that sales alone cannot give you."