Marketing’s Big Disconnect Over Pay

Sales people, cynics have said, are coin operated – driven solely by financial incentives.  Marketing people, on the other hand, are generally salaried and have their attention fragmented across a range of different activities including some with only remote ties to revenue generation.  Yet marketing and sales are co-dependent functions and their coordination is critical to any company’s success.  One pragmatic way of bringing the two into line involves rethinking the approach used to compensate Marketing people who, like their counterparts in Sales, also respond to incentives.

A sales force is all about improving a company’s top line performance. Marketing departments also have a hand in improving revenue.  But it’s not their only responsibility.  Their seemingly conflicting charters result in the two functions easily falling out of alignment, ending up with lost leads, resentment, and lack of cooperation. 

As a general rule, people do what they are paid to do, and the pay for Sales personnel clearly reflects that.  Sales compensation plans are geared toward closing orders in the immediate quarter to meet annual revenue and margin goals.  For Marketing, however, the linkage between revenue and compensation is far from clear and it is further muddied by objectives which are on very different time horizons. 

In companies where Sales and Marketing are well-aligned, marketing’s performance bonus includes two elements: a quantified marketing-generated revenue objective and a longer-term qualitative marketing goal.   Marketing staff need to accept the fact that directly producing revenue really is a central part of their job, even it is not their only responsibility.  And where Marketing is tasked with “lead generation” and “deal closing” activities – the two aspects of Marketing most directly involved in producing revenue – their compensation plans need to reflect those responsibilities.

Read the article published in Sandhill on how to redefine Marketing’s compensation at http://www.sandhill.com/opinion/daily_blog.php?id=29&post=    I welcome your comments and feedback on the article.

Comments (1)

  1. Charles Besondy -
    March 25, 2010

    Agree. Aligned companies look at compensation for sales and marketing differently than nonaligned companies.

    In a massive worldwide survey in 2005 MathMarketing and MarketingProfs uncovered many eye-opening facts about aligned companies.

    For instance, aligned companies were more likely to compensate Marketing for achieving conversion goals for won proposals. These companies were also more inclined to compensate Sales on how well they converted leads to meetings and meetings to proposals.

    Makes sense. With these factors baked into the compensation structure, Sales works like heck to progress buyers through the funnel efficiently (not just the last 1-2 stages); and Marketing works like heck to supply leads that are qualified because those are more likely to be converted to revenue.

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