Whenever marketers and salespeople are aligned on something—anything!—our natural tendency is to hail it as a victory, a rare moment of concord between two not-always-friendly factions.
But not so fast. Findings from a new Corporate Visions industry survey paint a picture of marketing and sales “alignment” that provides more questions than answers. Why? Because sometimes alignment actually means “consensus,” and consensus can have a downside. In other words, the extreme alignment of priorities that marketers and salespeople appear to share could actually signal a missed opportunity.
When we asked marketers and salespeople to rate which area of the customer life cycle had the most impact on driving revenue, which area they dedicate the most resources to, and which area they think they need the most help with, marketers and sales pros agreed that early-stage demand generation mattered most. Meanwhile, key post-purchase customer conversations, such as “ensuring ongoing renewals” and “expanding lifetime account value,” finished last across all measures, often by significant margins.
The charts below shows just how closely the responses from marketers and salespeople tracked with each other for the question about revenue importance. (The trend lines were remarkably similar in subsequent questions about investment priorities and where help was needed most.)
Seeing The Same, Missing The Same?
Think of the five moments we asked about in the survey as representing the key moments of two halves of the customer life cycle:
- New customer acquisition: Creating a buying vision, building a business case, and maximizing profitability.
- Customer renewal/expansion: Ensuring ongoing renewals and expanding lifetime value.
The overwhelming emphasis on the early-stage, new customer acquisition side of the life cycle makes one wonder: Are marketers and salespeople so focused on the same thing that they’re also missing the same thing—in this case, the opportunity to ensure revenue growth by adding more messaging strategy and structure to customer retention and expansion efforts?
Put another way: If everyone in the commercial operation is focused on the front-end of the business, who is making sure you’re driving profitable growth from existing customers and giving them a compelling reason not to leave?
What’s At Stake?
If there’s a drawback to overemphasizing early-stage new customer acquisition, it’s that you’re focusing on the most costly phase of the customer life cycle. A Harvard Business Review article mentioned that, depending on which study you choose to believe, acquiring a new customer is anywhere between five to 25 times more expensive than keeping an existing one. That’s not surprising given that high startup and supports costs can mean that customers have to be active accounts for months, even years, before they become fully profitable. If you lose those customers too soon, you miss an opportunity to reap your biggest profits.
Another related finding worth considering comes from research conducted by Frederick Reicheld of Bain & Company, which found that increasing retention rates by 5% can have a 25% or greater impact on profits.
This is exactly why a lack of strategy and structure around your messaging, content, and skills for these key moments won’t do. Unfortunately, skimping on the strategy for customer retention and expansion appears to be the rule, not the exception. (You can learn what we discovered about renewal messaging here and price increase messaging here.)
Your customer retention and customer expansion stories (“why stay?” and “why pay?”) are too important to leave to chance about what works best. As selling and buying models increasingly shift to a subscription/managed services model, the story you tell when you are the status quo becomes just as important—sometimes even more so—than the story you told to acquire your customers in the first place.