Why your sales force needs fewer leads
You read that headline correctly. Sales doesn’t need more leads. They need fewer leads—or more accurately, fewer raw, unfiltered, unqualified leads.
Sales reps need quality leads to increase the likelihood of a completed sale. They need qualified prospects who have been appropriately targeted, contacted and nurtured. They need prospects who have had an experience with your company to-date that is informative, engaging, and mutually beneficial.
What those whose job it is to close business need now are marketing specialist who provide prospects with the experience they expect—but aren’t receiving.
This Prospect-Experience report helps you better understand:
How few yet better qualified leads empower sales.
Why lead volume has nothing to do with sales performance.
How prospect experience services can bridge the gap between marketing and sales.
Why your prospect experience has everything to do with revenue generation.
… if you find a vendor who does offer this service to their clients, then you’d be wise to learn more about their product offering, because nurtured leads with detailed contact information are much more likely to convert than leads at the top of the funnel.
What good sales reps are, and aren’t?
Good sales reps are by nature hunters, eager to close in for finish. Take Steve, for example. Watch what happens when he receives a stack of leads: He rifles through them seeking the ideal prospect.
Not a senior executive? Out.
Budget undefined? Goodbye.
Next-year decision? No way.
Steve is obviously making poor decisions. For example, a recent study found that for technology products and services, line-of-business managers and functional titles are better lead sources than senior executives. And, the average B2B technology purchase starts as an inquiry on the internet and often takes a year or more until fruition.
To be fair to Steve, he’s paid to sell—not interpret leads. Plus, he’s jaded from sub-optimal marketing practices. In his rookie year, he wasted time following up on so-called high scoring leads from marketing. As it turned out, one-fourth had bad phone numbers and addresses. Another 20 percent came from consultants, competitors and students. Most of the others had little or no pre-qualification information. None had been filtered or nurtured in any way. (“That’s not our job,” said the marketing manager.) In Steve’s words, marketing automation made it possible for marketing to get more bad leads to him faster than ever before.
it’s a bizarre, often codependent 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.
— Sirius Decisions
More leads don’t equal more revenue
Meanwhile, in marketing, Jennifer’s completing her monthly report.
“We’re on track for a great quarter in lead generation,” she says. “This month we generated 1,278 leads from all sources—that’s a 30 percent gain over last year. And in spite of higher rates, we continue to keep our cost-per lead under $100.”
Jennifer’s report says nothing about lead qualification, how leads are nurtured, or what the sales force has done with previous leads. Which leaves one to wonder: Does anyone in this company’s management understand why investments in sales and marketing are not resulting in closed business? Do they realize that the real money spent to create leads is wasted unless they are managed and monitored to ensure a return?
The prospect experience matters—and is enhanced by data analytics
The true measure of marketing should be how well marketing creates a prospect experience that results in sales opportunities with a high potential of developing into sales. The true measure of sales should be how well they close good leads from marketing.
Far too many companies, however, evaluate marketing’s success by the number of leads they hand over to sales. These companies don’t have processes and methodologies to track anything other than the number of leads generated and their cost. Many of the same companies fail to hold sales accountable for closing the good leads and for reporting back results that feed the marketing and sales model. The overall result is often wasted marketing dollars and wasted sales time.
Closing the gap between marketing and sales
How can the blame game between sales and marketing be resolved? What if, instead of reporting how many low value leads marketing sent to Steve and his colleagues, Jennifer reported the following:
“This month, marketing added 14 new prospects to our prospect experience program. A total of 41 sales opportunities are currently under development by marketing.
“In June, sales received 10 fully nurtured sales opportunities representing $3.5 million in potential near-term revenue. I’ve attached a summary report.”
As indicated by the highlighted rows in Jennifer’s report above, sales representative Carol Barrett received two qualified leads this month. Each had already been contacted at least seven times: The best touchpoint techniques use multiple media—some combination of phone, voice message, email, letter, and direct mail. Each lead is deemed to have graduated from unknown or long-term status to a near-term decision-making mode. For each worked lead, marketing provided Carol a complete contact history, a company profile, and a thorough overview of the budget, the decision timeline, individuals involved in the decision, any events or other factors driving the decision, pain points, hot buttons, and competition.
When presented with a few well qualified leads, Carol gives them priority attention. For one thing, she knows her regional manager will be inquiring about them. She also knows from experience that these leads are real, or she wouldn’t be getting them. Marketing’s prospect experience reps have established a relationship with the decision maker, who is expecting Carol’s call.
Which lead generation machine would your company’s sales force prefer—the one that gives Steve reams of unfiltered leads, or the one that gives Carol two sales opportunities expected to close within six months?
Putting priority on nurturing the prospect for the sale
Research shows that 45 percent of qualified leads end up buying a solution from someone within a year. Think of lead qualification as a funnel. Marketing pours raw, unfiltered leads from a variety of sources into the top of the funnel.
Ideally, what emerges at the other end—ready for professional handling by a lead-hungry sales force—is a steady supply of qualified and nurtured prospects, each with a defined process and timeframe for buying.
Reality, unfortunately, rarely matches the ideal. All too often, no one manages what happens to prospects once they enter the funnel. Marketing, focusing on lead cost instead of quality, thinks it has done its job simply by dumping in the unfiltered leads. No one contacts or qualifies the inquirers. No one augments the leads with demographic and firmographic data. No one nurtures long-term suspects into short-term prospects. No one evaluates the effectiveness of the lead sources.
In this garbage-in, garbage-out scenario, you can’t blame sales reps for ignoring the output.
Modern marketing organizations use data analytics to look ahead. They anticipate unmet consumer needs, identify opportunities they didn’t know existed, and reveal subtle and addressable customer pain points. Data analytics can also predict the next best actions to take, including the right mix of commercial messages (for cross-selling, upselling, or retention) and engagement actions (content, education, or relationship deepening).
— McKinsey 2020
Who should nurture leads?
A lead is a general classification of an individual with an actionable need for a product or service. Short-term leads, also called qualified sales opportunities, are ready buyers that have the potential to close within one or two sales cycles.
Only a small portion of freshly generated leads fall into the short-term category. The root of the broken lead generation system described earlier is that little or no effort has been made to determine whether each raw lead has any potential at all, much less whether it is short-term or long-term.
Whose job is lead filtration, qualification and development? In our observation of how hundreds of companies treat leads, the bulk of the work overwhelmingly rests with sales: A recipe for failure. Even if leads are pre-qualified, salespeople are notoriously poor in following up on all but the hottest of leads. In fact, experts say, sales does not follow up on more than 70 percent of leads provided to them.
Management motivates and compensates salespeople to focus on making the immediate numbers, not on building a pipeline of prospects. To leverage the talents of your sales force, don’t expect sales reps to filter leads, qualify them, and then cultivate the long-term ones until they are ready buyers. They won’t do it.
Traditional marketing departments are also not usually equipped for this important job. They’re filled with brand builders or communicators who don’t have needed lead management skills or access to the technology that could help, or they are measured on response rates and so-called cost-per-lead, which are the wrong metrics.
In our experience, best practices suggest that a separate group, inside or outside the company, needs to take control of the vital lead development function. Think of this group as prospect experience specialists, reporting to marketing. They qualify raw leads, nurture lukewarm prospects, and turn the viable leads over to the sales force to close. Often this process takes months.
A qualified, nurtured lead is one that sets the stage for relationship selling. A prospect experience pro equips the sales rep with in-depth knowledge about the prospect. With insight into the prospect’s motivations, pain points and buying plans, the sales rep can engage them in a consultative conversation rather than launching into a cold-call presentation or a discovery interview.
Turning raw leads into revenue opportunities: Don’t give up too soon
The prospect experience professional has a challenging job. The starting point is usually an inquiry consisting of a name, title, a company, a phone number or email address. They must have the patience, discipline and skill to engage the inquirer in a conversation. This step alone can take weeks or months.
Many of the best prospects turn out to be those who have been contacted five or six times by voicemail, email and personalized direct mailings over a period of months before a conversation finally occurs.
Executives often don’t respond until a need’s priority has escalated. The lesson: Don’t give up too early on non-responsive leads. Many will save your emails or letters and will eventually self-qualify. Sometimes they respond to a letter or email from weeks earlier, or they call when the latest touchpoint coincides with their timing window.
After a dialogue has been opened, the team member with prospect experience skills begins probing, documenting, and tracking—always with the aim of moving the lead further through the pipeline. They’re patient, but persistent. They’re also creative and informative, with the experience to sense whether they’re being perceived as selling too hard and risking putting the potential buyer off. If an otherwise well qualified prospect is stalled due to budgeting or other considerations, the prospect-experience specialist follows up meticulously at the appropriate time. Ultimately, they’ll either disqualify the lead if nothing happens or turn over a fully developed short-term lead to sales.
A qualified, short-term lead typically has 10 attributes:
SIC or NAICS code
Firmographics (revenue, # employees, # of locations)
Decision makers and influencers identified
Environment documented
Decision-maker engaged
Business pain(s) uncovered/ validated
Decision-making process and timeframe documented
Budget allocated or process for budgeting documented
Competitive landscape documented
Sense of urgency or compelling event exists
Unfiltered leads rarely have more than three of these attributes, so any sales rep working on a commission check will be delighted to get all 10. With a detailed picture of the prospect’s business drivers, plans and buying processes, the sales rep is positioned as a knowledgeable advisor interested in the prospect’s business challenges.
Clearly, the prospect experience role is incompatible with the sales role. Good prospect experience professionals are hard to find. The best approach to performing the job effectively is to (A) assign it to a specialized in-house team with no direct sales responsibility—or (B) outsource it to a firm totally focused on nurturing leads into sales opportunities.
By not passing unfiltered, unqualified leads to your sales team—and focusing instead on delivering fewer, yet more qualified prospects—you have the very real potential to significantly impact your organization’s ability to generate revenue.