CEOs are all too familiar with the struggle for dominance between sales and marketing. Yet despite being on top of the organizational chart, they are not immune from its deleterious effects. The in-fighting grates on CEOs and derails companies in much the same way that children quarreling upsets parents and sabotages harmony in a home.
Leaders do not want to declare winner in this fight because they understand that if there is a winner, then the entire organization loses. The best CEOs understand that fighting results in a loss of focus on the consumer and the product – resulting in organizational decline. When one team wins, it is at the expense of another. Having a losing team on either side means foregoing profits in the form of lost sales, shortened customer retention, and elevated employee turnover.
Top CEOs know that the outcome of this classic battle affects far more than just the sales and marketing teams!
What is at Stake?
When senior consultants or executive leadership coaches cite profits as the biggest factor at stake, they miss the heart of the issue. A company plagued by fighting between its sales and marketing teams does not simply fail to achieve its earning potential, it also trifles with its future position in the industry. Simply put, when intra-organizational fighting occurs, everything is at stake. In-fighting stymies corporate growth at every turn, which can push a company past the bell-curve of the organizational lifecycle chart into decline and ultimately death.
Hinders Profits
The most obvious effect of the sales versus marketing battle is reduced profits. Fighting consumes profits from both sides of the equation – reducing revenue and driving up costs. When customers are caught in the middle of a fight, they no longer feel like a top priority. Being deprioritized causes prospects to take their money elsewhere and existing customers to reduce their lifetime value as they opt for competitors’ offerings instead of remaining brand loyal.
Furthermore, fighting increases employee turnover, which inflates the costs associated with hiring and onboarding new employees. Inevitably, turnover also results in delays to product research, development, and testing. This lag leads to stagnation – a fatal diagnosis in any industry.
Damages the Brand
Brand damage is also a common byproduct at companies where fighting occurs. When sales and marketing teams are more concerned with winning than they are with working cohesively, a brand’s message suffers. Warring sides will never be able to create a consistent, powerful, and effective brand message to engage consumers. Nor will they be able to provide the feedback and data necessary to elevate both teams’ efforts.
Ties Up Resources
Most CEOs comprehend that acquiring new customers is far more expensive than retaining existing ones. In fact, a Forbes article highlights these sobering statistics:
- “[It is] about 50% easier… to sell to existing customers than to brand new prospects.”
- “A 5% increase in customer retention can increase a company’s profitability by 75%.”
- “80% of your company’s future revenue will come from just 20% of your existing customers.”
When fighting drives existing customers away, more resources must be devoted to acquiring new customers to replace that lost revenue. This reallocation cannibalizes focus from the activities that move the brand forward like product R&D, business development, and customer service.
Drives Away Top Talent
Finally, ongoing fighting breeds a toxic culture that poisons the pool of potential candidates. Information spreads quickly online, which means that any word of a negative corporate culture can harm an organization’s ability to recruit. News of in-fighting can scare away top talent from applying and persuade even the best recruits to decline offers. A company is only as good as the sum of its parts, which means that without the right personnel, it cannot succeed.
You might start with building your own pool of talent to evolve your team. Here is our free step by step guide.
