Why strive for sales and marketing alignment?
How alignment increases sales, efficiency and customer lifetime value…
In last week’s blog, I defined sales and marketing alignment and explained why it’s becoming mission-critical in the automotive industry.
I described how the traditional business model of selling cars is being flipped on its head. Automotive brands must shift from selling a product to selling a service and an experience. And to ensure the customer experience is seamless, consistent and engaging, they need aligned sales and marketing strategies.
But why is this important? From driving sales to improving efficiency and even growing customer lifetime value, I’ll look at why brands should make sales and marketing alignment a priority.
Driving sales performance.
In the automotive industry, to some degree alignment already exists in the B2B space – or ‘fleet’ sector as you’ll likely know it as. Fleet departments’ sales and marketing teams tend to be more integrated and therefore, more aligned.
The fleet sector is an area of the market where the sales team’s long-term opportunity (a single company ordering multiple vehicles over a number of years) exceeds the value of a one-off sale.
The ongoing service from the sales team – and to some extent, customer experience – have been fleet department priorities for many years. Levo specialises in this space, and in our experience, we have seen first-hand the benefits of aligned strategies.
We analysed campaigns that we have delivered for clients, finding that those with an aligned strategy – where marketing support sales – delivered consistently higher results. Whether the objective of the campaign was to drive leads, appointments, opportunities or sales, our clients experienced a 36% increase in results.
I should point out that these are the results of individual campaigns, not increases seen over the long term by investments in alignment. However, everything points towards a compounding effect, with continued alignment yielding even better performance over a longer period.
You can read more about our approach to aligned campaigns, which deliver ‘sales-led communications’, here.
Increasing efficiency.
A disconnected sales and marketing strategy can leave things to chance. In many cases, the sale can be a byproduct of sales and marketing activity, not the result of a coherent, joined-up process.
With the increase in digital touchpoints – and in the automotive industry, the introduction of virtual sales and e-Commerce platforms – marketing is extending its influence further down the sales funnel. Sales teams, meanwhile, are increasingly required further up the funnel, which is seeing the role of sales shift to an account management function.
Sales and marketing alignment organises this. It creates a structured process and approach. As I mentioned in last week’s article, it stops both teams from tripping over one another, while also driving efficiency.
In any business, two people doing the same thing leads to inefficiency. One job gets done twice, often differently and, in the case of sales and marketing, one department will do it better than the other. What I’m getting at here is that to improve efficiency, you want your resource allocated where it’s best placed to deliver results in the most efficient way.
The efficiencies created by sales and marketing alignment also helps brands to continuously test, learn and improve. By A/B testing your processes and customer journeys you’ll understand which delivers the best results and hone your approach over time.
Doing this also allows you to more accurately decide what resource is needed and where. This enables more transparent, data-driven capacity planning and ROI modelling.
Increasing customer lifetime value.
We’re anticipating that the automotive industry will follow a similar trend to the one we have witnessed in the software industry in recent years. By this, I mean moving to a recurring revenue or, ‘as a Service’ model.
Years ago, most software was expensive. Similar to vehicles, software providers targeted a one-off sale, charging a large fee for buying and implementing it. Today, even the most complex, business-critical software is purchased via a relatively affordable recurring revenue model.
Now, brands are launching their own recurring revenue models. MaaS (Mobility as a Service), CaaS (Car as a service) and TaaS (Truck as a Service) are coming to market.
As well as offering businesses and drivers greater flexibility, subscription models make customers’ lives easier. They wrap other services – whether insurance, EV chargers or energy – into one simple, packaged payment.
Brands can benefit from this model too – able to sell more products, services and add-ons. But the key for brands launching these models is measuring customer lifetime value, as opposed to focusing on sales numbers. Two ways to do this are by measuring RPU (Revenue Per User) and PPU (Profit Per User).
These measures are crucial in the automotive industry given the big difference between software (virtual) and a vehicle (a physical asset with a high manufacturing cost and depreciating asset value). Ultimately, without a constant stream of profitable users, mobility propositions won’t be viable.
In a world where ‘Mobility as a Service’ is becoming the norm, automotive brands need aligned sales and marketing strategies to retain users – keeping them coming back, increasing RPU and PPU based on the service and experience they receive.
Brands should look to SaaS providers, many of whom have honed this approach through nurturing journeys, sales account management and retention and win-back strategies – each of which rely on a combination of marketing activity, input from sales teams and automation.
Customers will judge these new mobility models on the quality of service and experience. Having bought their food shop from Ocado, Christmas presents from Amazon and phones from Apple, customer expectations will be sky-high when paying hundreds every month for mobility.
A final thought.
The benefits of sales and marketing alignment are clear. It improves results by 36%, as our own work demonstrates. It drives efficiency, allowing brands to scale their resource based on an optimised customer journey. And it increases lifetime value.
With the future of the automotive sector rapidly moving towards subscriptions and recurring revenue models, measuring and improving the lifetime value of a customer – and also a vehicle’s lifetime value – will soon take precedence over the sales numbers.
Next week, I’ll highlight the challenges encountered when implementing sales and marketing alignment. Specifically, I’ll focus on the role people, process and platforms play in developing and delivering a successful alignment strategy.
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