Structuring Sales and Marketing: one team or two?

By Jerry Rackley

The relationship between the sales and marketing teams isn’t always cordial. There are historic divisions and squabbles that sometimes sound like siblings in the back seat on a long car trip. The complaints often involve leads, with sales complaining that there aren’t enough or that they are poor quality, while marketing complains that the sales team is not a good steward of the leads that marketing generates. Sometimes the bantering is good-natured, but at other times the dialogue is downright caustic. Can’t we all just get along?

What’s not disputed is that these two teams need each other and must find a way to work together. One way many organizations try to create peace is through structuring the teams as a single entity, led by a single manager. On the surface, this idea seems to have merit. Logic says that unity is the likely outcome when everyone is part of the same team. Having a single manager referee and administer all disputes, and holding everyone accountable to the same performance goals & standards. In theory, the one-team structure for sales and marketing seems wise. In practice, however, it simply doesn’t perform as well.

The recent Demand Metric study on Sales & Marketing Alignment researched a number of alignment issues, including the structure of the sales and marketing team. There are three, basic options for structuring these teams: a combined team led by a single manager, separate teams reporting to the same manager, or separate teams reporting to separate managers. The study revealed that the distribution of these three structures is virtually equal. In other words, none of these three structures dominates the corporate organization chart. However, the study also revealed how they perform, which in the end, is far more important.

It turns out that the combined team led by a single manager is the worst performing of these three structures. By “worst performing”, we mean least likely to achieve revenue goals. This is pretty important, because the sales function is charged with making sales, and the marketing function should help facilitate those sales. To put some numbers behind this finding, the one-team structures in our study missed making revenue goals (49 percent) about as often as they achieved them (51 percent). Either of the two-team structures was far better, with two-team, one-manager structures achieving revenue goals 64 percent of the time, and two-team, two-manager structures doing it 69 percent of the time:

This study also tells us who is using the one-team structure: 68 percent of businesses with fewer than 25 employees are using this structure, while less than 10 percent of companies with 250 or more employees do so.

What are the implications of this finding on the structure of sales and marketing teams? The study did not attempt to determine why the two-team structures perform better, but we can still draw some conclusions. While sales and marketing are complimentary functions, they are not the same. They use different processes, strategies and systems, even though they are aligned around the same revenue goal. Simply mashing these functions together and expecting high performance to result is naïve. Each function needs the ability to focus on how it adds value. Forcing sales and marketing into a one-team structure is a little like keeping the same 11 football players on the field all the time for both offense and defense. There is distinction and specialization of these roles, and how they are structured clearly influences how they perform.

The advice for companies using the single-team structure is pretty obvious: move to a two-team structure. It’s easy to understand why small companies are using the single-team structure. They are by their very nature flat organizations, and they typically face more resource constraints than larger companies. Yet, the structure of their sales and marketing team is one where they should invest, because the data shows there is a return. It suggests that defining, managing and structuring the sales and marketing teams separately improves an organization’s chances to achieve its revenue goals. Divide and conquer is the approach to take: divide sales and marketing into separate teams, so they can better conquer their objectives.

There’s more to sales and marketing alignment than team structure. Read about the other influences on alignment in the benchmarking report on Sales & Marketing Alignment such as systems and integration. But if your sales and marketing staff are currently part of a single team, restructuring is the place to start.