FACT: 80 percent of leads generated by marketing are never contacted by a sales person. What a frightening statistic, and what an enormous waste of time, money and resources.
“The problem is not that marketing departments are delivering such high numbers of leads that follow-up is impossible. And it’s also not that sales professionals are willfully ignoring good opportunities passed their way,” explains Dan McDade, CEO of PointClear, in his recent article, “Why that Mountain of Leads is a Molehill to Sales.”
So, what’s the problem?
Quite simply: lead quality. Generating revenue is a team effort between marketing and sales. On the front end, marketing’s role is to attract and nurture leads until they are ready to be turned over to the sales person. Sales then completes the sales cycle by closing the deal. Both departments must be able to communicate to the buyer.
Marketing accomplishes this in a bulk manner, but needs to make those larger scale interactions feel intimate. Sales must then assimilate the data assembled during the marketing process and create urgency — the kind that makes you reach for your checkbook.
Sounds simple, right? Not so fast.
Marketing sends over a batch of leads gathered at a trade show to the sales team. After a few calls, the sales rep discovers that the person on the other end of the phone is clearly in education mode and not ready to buy. After a few repeat experiences, the sales rep learns to ignore these cold marketing leads and focus on those more likely to help make quota that quarter. The misalignment between marketing and sales stems from the fact that they don’t play by the same rulebook.
Quality Trumps Quantity
Fortunately, there is a solution to this proverbial disconnect. Both groups must come to terms on what constitutes buyer interest. In quantifiable terms, what are the characteristics of a qualified lead? This is determined by observing the prospect’s online behavior over time, and creating a conversation that meets the needs of the prospect.
At a certain point, a prospect will do something to tip the scale, indicating sales-readiness. This is called “conversational conversion.” At this point — and not a minute before — the lead should be passed over to the appropriate sales rep to complete the sales process and close the deal.
Today’s marketers must follow the “lead” past the conversion stage into the area of real importance: revenue. We can argue about when revenue begins, but most agree it becomes most visible within the unpredictable bullpen of activity we call the “sales floor” — where blood is shed, tears are drawn and where leads go to die.
Sales is an area of insight and accountability. Therefore, it’s all the more fitting to look to sales when establishing a conclusive measurement of ROI for marketing spends. The key to defining this delicate equation is to put to rest a timeless and fierce debate: How do you determine lead quality?
There are several ways in which lead quality can be measured, but the key factor is that there must be specific, agreed upon milestones that are agreed upon by both marketing and sales. If marketing has a reputation for handing over non-sales-ready leads, sales will become frustrated and learn to ignore them. It’s like crying wolf.
However, if the leads have been properly nurtured to the point where they are ready to purchase, sales will be able to complete the sales cycle in a timely manner and generate revenue so everyone wins.
Tracking Digital Behavior
With the advent of marketing automation tools, it is easy and highly cost-effective to implement a powerful lead management system that bridges the gap between marketing and sales. This kind of system enables the marketing department to literally track the behavior of potential buyers online and score leads based on their digital behavior.
Lead-scoring automatically gives points to leads, allowing them to be sorted and prioritized. It allows the A leads to be sent directly to sales, while routing B, C and D leads back to marketing to be placed in a nurturing program. It also can reduce friction between sales and marketing, because both departments are in agreement on what constitutes a good lead.
An effective lead-scoring system starts with a discussion between marketing and sales to set parameters and decide on what constitutes a qualified lead. At several steps, sales and marketing must agree on values to assign to a host of items so that the responses can be ranked. They must collaborate on how many points to assign to different titles, budgets, company size, etc. They also need to decide what numbers should be used to weight the data.
By establishing initial qualification criteria, marketing also will be able to focus on producing more targeted leads. It is really the process, not the number, that provides the value of lead scoring. A lead score is not a static number; it is likely to change over time as the values that go into determining the original score change from continuing contact, changes at the company, etc.
In B2B, the sale is more consultative, with a team of people likely being the decision maker. In B2B, the original contact may not even be part of the team, but simply an information gatherer. The decision to buy is more critical — for example, it could be about a system to run the financials of a brokerage company.
The marketing team will assign a point value for each move that the prospect makes. At a certain number, which is agreed upon by sales and marketing, the lead is considered “qualified” and handed to sales for closing. If the sales team is using a sales force automation tool, the lead is passed directly from the marketing automation system to it. The end result: a shorter sales cycle and more top line revenue.
With all these new measurement tools at our disposal, how many of them have been positively identified as a way to bring in good old-fashioned cash flow? In this economy, it’s no longer a question asked in front of water coolers. It happens in boardrooms. It’s beaten to death in budget meetings. It happens right before you’re asked to turn in your key card.
The only way to truly leverage the latest marketing technologies is to build upon a proven platform that allows you to gain visibility beyond the marketing machine and into the sales pipeline and, ultimately, the corporate books.
True lead management has the benefit of extending beyond the marketing cycle into the sales cycle. By coupling the marketing platform with sales CRM tools, the visibility of both business units increases exponentially, providing business owners with all the necessary information to accurately evaluate their performance and make any necessary adjustments to stay ahead of the competition.
Justin Gray is CEO and founder of LeadMD, a marketing services firm focused on organic lead generation and the successful deployment of marketing automation. He can be reached at [email protected].