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Should sales and marketing share a budget?


Should sales and marketing share a budget?

By Stefanie Fernandez, head of sales solutions at LinkedIn MENA

Sales and marketing alignment is becoming increasingly widespread as a business objective. There is a growing focus on sharing between the two departments – sharing knowledge, sharing resources, sharing credit. But one of the key questions, from an operational standpoint, is whether sales and marketing should share a budget.

On the surface, it makes sense for today’s businesses to adopt a joint budget for sales and marketing activities. Such a setup would enable more seamless planning between the two sides, preventing the sort of tug-of-war that occasionally ensues when disparate budgets square off. Theoretically, it’s easier to formulate a strategy that integrates both sales and marketing when you don’t need to worry about conflicting resource pools.

But the data tells us most sales reps and marketers aren’t interested in this approach. It seems very few organizations are currently utilizing a shared budget for sales and marketing – at least not openly.

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Why the resistance?

What is it about the idea of a shared budget that seems to repel professionals and companies alike?

There are a few major roadblocks standing in the way, and they aren’t necessarily easy to overcome.

Both departments want autonomy

People get into their lines of work for a reason, and usually, have skills conducive to those disciplines. Salespeople want to engage in sales; marketers want to engage in marketing. Suggesting a shared budget can lead to disconcerting thoughts of blurred lines and reduced autonomy.

Questions over control

It’s one thing to pose the idea of a shared budget for sales and marketing. But once you actually put it into action, someone needs to be in charge of managing it. If that authority falls into the hands of a CMO, for instance, it would only be natural for members the sales team to start wondering whether they’ll get the short end of the stick.

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A potentially helpful development in this regard is the rise of the chief revenue officer. The proliferation of titles such as this reflects a growing emphasis on driving profits holistically, rather than stringently focusing on roles and attributions. 

Fear of cuts

When people think of consolidation, they often think of layoffs and budget reductions. So, when the notion of a shared budget is presented, employees will invariably wonder if it’s an effort to cut down on overall spending or hiring for the two departments.

However, the truth is that effective integration can dramatically lower unnecessary expenses.

[Tweet “Sales and marketing misalignment costs businesses $1 trillion per year.”]

If this step proves helpful in fostering alignment, businesses can increase the total planned budget for sales and marketing, and still come away with higher revenues.

Implementing a shared budget

Many companies are seeing success with sales and marketing collaboration despite separate budgets. Conjoining them certainly is not a prerequisite. But it’s an option that business leaders are increasingly going to start considering within the coming year or two.

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If you see this as a potentially helpful direction for your organization, but have reservations about getting buy-in, here are a few steps that could make it an easier pitch:

  • Build trust. This is a long-term objective, and hopefully one you’re already focused on. But if you build a culture of respect and trust, and each person on the team feels valued for their specific roles, you can eliminate some of the autonomy concerns.
  • Focus on advantages. How could a shared budget be used to add new tools and resources that will benefit both sales and marketing? How will it become easier to launch campaigns and projects involving each side? How would this change make everyone better at their jobs? Answering these questions will help get people on board.
  • Be transparent. It’s always a good practice and is especially valuable when discussing significant organizational changes like this. The more you can explain your rationale and outline the particular ways a shared budget would function, the less confusion and anxiety you’ll encounter.

Ultimately, there are no right or wrong answers. This is a fairly new concept and there really aren’t enough companies doing it to give us much evidence of the impact. But what we do know is that many sales and marketing departments could stand to be more strategic in their alignment and sharing a budget may help facilitate that. It’s a thought worth exploring.

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