Guest post by Dan McDade, president of PointClear
"Plus ca change, plus c'est la même"
Jean-Baptiste Alphonse Karr (1908 - 1990) is credited with saying these words, though Bernard Shaw, Winston Churchill and several song-writers including Jon Bon Jovi have picked up variations of the theme over the years.
The French phrase, translated into English is, "The more things change, the more they stay the same."
Sales lead management is a basic business process that is broken in most companies today.
Given the technology available today-CRM, marketing automation, BI tools, LinkedIn, and Twitter-we can zip an ever-increasing number of poorly qualified leads to sales, more quickly and at a lower apparent cost, then ever before.
Incredibly, rather than fixing this problem, senior managers are hoping that marketing and sales teams will somehow fix it themselves-despite the fact that the problem has been around since there were such things as marketing and sales.
There is a myth that Ostriches bury their heads in the sand. This likely dates back to early AD when Pliny the Elder (AD 23-79) wrote, "Ostriches imagine when they have thrust their head and neck into a bush that the whole body is concealed."
I ask you to take a good look at what is going on in your organization and evaluate whether or not your head is in the game or in the bush.
It doesn't really matter exactly what percentage of leads end up wasted. Suffice it to say that it ranges from 80% to 94% consistently in most companies. SiriusDecisions estimates that average companies are leaving 80% of potential business on the table for more agile companies to win. How your company compares against average and best-in-class companies is interesting, but not the critical starting point for improvement. There is so much improvement possible-VERY LOW-HANGING FRUIT-that starting with the following three critical improvements will substantially improve results:
- I hate to say it, because I know you have heard it before, but having marketing and sales agree on a common definition of a lead is the first, most critical step to improving results. I am consulting with a company right now that typifies the situation in most companies. Marketing is compensated on the basis of the quantity of leads. Sales, obviously, is compensated on revenue. The result is that an avalanche of leads is poured into SFDC with very, very few of those leads ever receiving sales attention. The problem is that leads are passed to sales when they are raw, too early and without valid interest. In Bridge Group research during 2011, just 7% of field sales reps surveyed considered 75% or more of the leads they received as fully qualified.
- The second most critical step is to have sales accept AND then qualify leads. Acceptance should be on the basis of the lead meeting the agreed upon lead definition. Here is why this is important and why it is not done today: Sales reps at average companies only qualify about 30% of the lead flow they receive. Just over 20% of those leads close. When the average sales rep receives a lead they have a choice. Either they officially qualify the 30%, making them accountable for losing four out of five times. Or, they provide as little visibility as possible until they are absolutely certain they are going to win the business. Everything else (the four out of five) will probably end up as "no decision" or simply appear stalled in the sales force automation system. Changing this involves two things. Measurement of sales accepted leads and an acknowledgement that closing some percent of qualified leads is acceptable. Without these changes, the finger pointing will continue, and results will be comparatively poor.
- The third most critical step is the establishment of a lead qualification and nurturing function that "pre-certifies" leads prior to their going to sales AND allows for the flow of leads that are not accepted or qualified back into this group for reheating and/or nurturing. Neither marketing nor sales can own this function. It is a hybrid function-let's say equivalent to the Supreme Court-which is held accountable for effectively "certifying" and nurturing leads until they are sales ready. It is funded by marketing investment savings and the need for fewer sales people because you focus the top 80% of your sale team on fully qualified opportunities rather than low-level, unfiltered, low-quality leads. The article, Why Your Sales Force Needs Fewer Leads, provides a roadmap for success.
An old friend of mine has a great expression: "Even the man lost in the woods knows where he wants to go." If there is an executive in your company that has their head in a bush, it is time to help them out of the woods.