How to incentivize collaboration among demand planning, sales and marketing
Three keys to motivating these different functions to work as a team
Demand planning, when done well, is a team sport that requires different functions carrying out their own assignments – but in cooperation with one another. In other words, for the demand planning function to achieve its goals efficiently and effectively, it needs the seamless buy-in and cooperation of the sales and marketing teams.
Much like a football team - with its offensive line, quarterback, running backs and receivers – each of these three departments have different skills, areas of strength, and insights that will support the ultimate goal of developing and publishing an accurate demand plan.
Identifying the players and assessing the playing field
Let’s take a closer look at these three functions – demand planning, sales, and marketing – and define what they do, determine how they can best work with each other, and design a game plan that incentivizes and encourages them to flourish both independently and as a team. Ideally, if done correctly, each function will find individual success and the team – your organization – will be the ultimate winner.
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Individual success can drive collaboration
You might think that these three functions would naturally pool their collective and distinct insights and talent to benefit the organization as a whole. However, the reality is that achieving this type of collaboration is often difficult as these groups typically don’t gravitate towards working together. In fact, we’ve seen many instances where these three groups compete with – rather than compliment and cooperate with – each other. And when that happens, the organization ends up on the losing side of the scoreboard.
The solution is to find a way to change the culture and start active, productive collaboration among the demand planning, sales, and marketing. The key is demonstrating how their individual outcomes will improve if they work together as a team.
Incentivizing demand planning to work with sales and marketing
Explain to demand planning how it can benefit from the sales team’s expertise regarding short-to-mid-term customer purchasing patterns. Plus, the sales team can keep it informed about upcoming large deals or promotional events. This will enable demand planning to develop strategies based on expected future trends rather than what’s occurred in the past. A demand plan based only on backwards looking data will miss out on incorporating expected customer behavior changes.
Similarly, marketing can help demand planning by educating it on mid-to-long-term market behaviors, including consumer preferences, competitive landscapes, and projected total market size or share. In this way, demand planning can take into account macro-trends regarding key products so it understands where and why future demand levels may be significantly different from past demand levels for the same product.
Incentivizing sales to work with demand planning and marketing
Demand planning can help the sales function better understand which customers traditionally have significantly over- or under-delivered on their forecasted demand. As a result, sales can focus on customers that are most likely to buy the most. Sales forecasts traditionally are based on customer’s prior purchases. But demand planning’s performance numbers allow sales to understand the connection more critically between sales forecasts and actual demand.
Sales can also benefit by working with marketing and learning about upcoming advertising and marketing campaigns as well as upcoming product portfolio changes and roll outs of new products. In many cases, sales focuses only on their own short-term interactions with customers. But understanding upcoming marketing activities can give sales a broader and longer-term view of potential sales opportunities.
Incentivizing marketing to work with demand planning and sales
Marketing can benefit from working with demand planning by getting a better understanding of performance at a product/customer level. This will enable marketing to connect its broad insights and analysis to its specific impact on the company, the products it sells, and the customers it serves. Marketing often views actions and results at a macro level, which may or may not be directly correlated to specific considerations across the company’s products and customers.
At the same time, sales can boost marketing’s performance by helping it understand what actual customers are saying, how much they’re buying, and how they’re reacting to products, pricing and promotions. These insights enable marketing to better understand what types of advertising are working and what are not. Keep in mind that marketing often evaluates ideas on a small scale and conceptually; on the other hand, sales tests ideas on large scale and with customers on a daily basis.
Teamwork makes the dream work
Demand planning is a team sport. Different players bring different strengths to the team, but individual success must be intertwined with the team’s success. The key is incentivizing the different players – in this case, demand planning, sales, and marketing – to work together collaboratively throughout the demand planning cycle so that the organization as a whole wins.
Here are three guiding principles to make sure this collaboration is efficient and effective:
- Make it proactive and positive, not reactive and punitive. It’s not about who was wrong last month, it’s about what everyone can offer to get it right this month.
- Establish formal and informal channels of communication. Many companies will have formal demand review meetings and other scheduled sessions where these three functions will collaborate on a regular basis. But there should also be informal communication among them as developments arise so there’s no delay in information sharing.
- Provide examples of success. Nothing generates buy-in like proven success. By showing these three functions actual examples of how collaboration and teamwork can benefit them individually and the company as a whole, your teamwork approach will stand a far greater likelihood of success. This can include examples such as the 10%+ forecast accuracy improvements that are often seen by working together as a team on a consensus demand planning process.
The payoff: Ideally, each individual function improves its own “stats,” while the team – your organization – wins in the game of improved demand plan accuracy.
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