In truth, you may partially be responsible for why this is happening in your company. A new rep might provide more visibility than an experienced rep … until they find out that they spend more time reporting on each potential deal than they do selling because everyone wants to know the status of every deal—practically real time.
Relatively small improvements in the demand waterfall from marketing-qualified lead to sales-accepted lead to sales-qualified lead can make a huge difference on the top and bottom lines. If you have defined your market, media and message and if you are inspecting outcomes and conducting in-depth analysis at every step, you can substantially improve results.
- Deliver your sales force fewer, but better, leads
In the whitepaper Why Your Sales Force Needs Fewer Leads (just ask me for it) I open with: “Contrary to popular belief, sales reps don’t need more leads. They need fewer leads—or more accurately fewer raw, unfiltered, unqualified leads.”
Sales reps need leads that have been carefully qualified, properly and consistently nurtured and appropriately developed, increasing the likelihood of a completed sale. The problem is that there is so much confusion (and snake oil) out in the marketplace today that:
- Marketing is paid, in fact rewarded for, lead quantity and not quality.
- Technology solutions push more, poor quality, leads to sales faster and more efficiently than ever.
- Almost 47% of sales reps miss quota.
Here is a report from marketing: “We’re on track for a great quarter in lead generation. This month we generated 1278 leads from all sources—that’s a 30% gain over last year. And despite higher PPC costs, we continue to keep our leads under $100.”
When sales executives receive these so-called leads from marketing, here is how they respond:
- Not a senior enough executive? Out!
- Budget undefined? Goodbye.
- Next-year decision? No way.
Here is what marketing should be reporting: “This month, marketing added 14 new prospects to the pipeline. A total of 41 sales opportunities are currently under development by marketing. Last month, sales received 10 fully nurtured sales opportunities representing $3.5 million in potential revenue. Attached are the details.”
SiriusDecisions historically characterizes the relationship between marketing and sales as follows: “It’s a bizarre, often co-dependent relationship; working at arm’s length, sales has the latitude to dismiss the leads marketing creates as not qualified or nurtured enough, while marketing can claim that they are holding up their end of the bargain when you consider things purely from a volume standpoint.”
Here’s a real-life example: We once provided services to a large software company and I got a call from our day-to-day contact one morning about our lead cost—he said we were too expensive. I asked him how much our leads cost and he said $650. I asked him how much the other vendor’s leads cost and he said $350.
I asked him what percentage of leads delivered by PointClear were considered high quality and he said 100%. I asked him what percentage of the other company’s leads were high quality and he said about 50%. Then he said, “I know where you are going with this, but can’t you just find some way to reduce the cost per lead—$350 is all we can spend.”
Following that conversation, I telephoned 10 of that software company’s largest partners and asked them about lead quality from the other vendor. They said the quality sucked. I asked them why they didn’t do something about it and they said because they were afraid that the big software company would stop sending them leads. That conversation was about eight years ago and we still do business with the big software company (when they are looking for high quality leads).
However, most of the spend is going through the equivalent of “sweat shops” and they literally waste millions of dollars on low quality, poorly qualified, so-called leads that are never followed up. They have even come up with a way of justifying the spend. They calculate how much the average deal is, assume a 20% close rate and calculate ROMI (return on marketing investment) based on these estimates. Forget that the actual return is in fact almost zero. What is missing in most companies, from an execution standpoint, is the following:
- A process to measure the quality and cost per REAL lead.
- A judicial branch (that is, the c-level executive) that provides the checks and balances needed to keep the other branches (sales and marketing) honest by evaluating opportunities that are not worked by sales to see if there is a quality or an effectiveness problem.
- A group to nurture leads until they are sales-ready; and to take opportunities back if sales cannot gain traction for one reason or another. Right now, these opportunities are disappearing into a black hole.