The CEO’s Role in Eliminating Wasted Marketing Spend and Increasing Revenue
Challenges facing Sales and Marketing have been around since the beginning of time. The two organizations do not understand each other, and often point fingers: Sales says marketing does not create enough new opportunities and the quality of the leads they do create is not good. Marketing says sales reps do not follow up on leads. Both, it seems, are working toward different, conflicting metrics. Sales = Revenue. Marketing = MQLs
This is something the CEO needs to address. Far from being beneath them, Sales and Marketing conflicts need to be a top priority for CEOs, who stand to benefit in a big way by setting the stage for these two organizations to work in sync. The company leaders’ ability to articulate the direction of the company in the context of the offering, the market and why what they sell is better and different is right up there at the top of their job description. Without that, and without careful oversight of the Sales and Marketing output, the bickering goes on and the results fall short.
Here, in summary, is what CEOs must do:
Define a lead
If your teams are not aligned in their understanding of what you sell and who you sell it to, you are wasting time, wasting money and giving your competitors an advantage.
Most companies don’t have an agreed upon lead definition.
Anyone who expresses interest in what you sell is an inquiry, not a lead. Experience has taught me that only 5% to 15% of inquiries are ready to speak to Sales. However, as many as 80% of inquiries will be ready to speak with Sales in the future. If you send leads too soon, Sales will discard them, so you must nurture them until they fit your lead definition.”
Make Marketing Accountable
Marketing needs to be accountable for sourcing revenue and given credit accordingly. Marketing adds more value and performs better by having skin in the game.
Document the Cost of a Lead (it is more than you think but less than you are paying)
MQL lead cost needs to be documented along with the cost per sales-accepted lead, per sales-qualified lead, and closed deal. Know what you are paying (and what you are getting) and keep close track so you can continuously optimize your lead generation, qualification and nurturing processes.
Marketers frequently feel that they should focus on KPIs around the sheer volume of leads they produce and the average cost thereof. While those are good metrics to keep an eye on, they are extremely shortsighted because true performance is measured in outcomes (such as revenue) rather than outputs (such as lead counts).
“The reality is: sales reps do not really want lot of leads—they want leads that will buy. They want leads that are ready for a sales conversation and can be moved into AND THROUGH the pipeline. In other words, sales reps want more from less—not the other way around!”
The Judicial Branch
Once a company has ground rules (an AULD), it needs to identify an objective committee to keep Sales and Marketing honest. Here is where an authority I call the judicial branch comes into play.
The judicial branch is comprised of senior-level sales and marketing executives. The CEO (or at least one c-level manager, even the CFO) should be a member as well.
This body reviews every lead that sales reps ignore or proactively reject (i.e., sends back to marketing) to determine whether the rejection was valid. They make an objective call on whether the lead fits the agreed-upon definition.
Using this system promotes accountability within both organizations. If your salespeople know they will need to justify their decision to reject a lead, they are far less likely to give up because of laziness, gut reaction, or because the prospect was not immediately ready to buy. And if your marketers know the quality of their leads will be inspected, they are not going to fill the pipeline with low-quality leads simply to meet their quota.
It is important to point out the judicial branch does not exist to assign blame. This branch exists to figure out where the problem is, so you can take the appropriate measures to improve the process (including ongoing evaluation and re-evaluation of the agreed-upon definition of a lead).
Not the right time. Need not yet realized. Decision maker not yet named. When marketing nurtures across multiple cycles, they will triple marketing return.
I believe that no lead should be left behind. That means there is a process for managing every outcome in working a lead. Today, in most companies, Marketing passes “light interest” inquiries to Sales. Best case, Sales will cherry-pick a few that stand out and ignore the rest (they die in the black hole called CRM).
Develop a Guide
Make it easy for sales with a guide titled, “What is a Lead and How to Follow-up on One.” Even experienced sales people often give up on leads too soon. Put a best-practice process in place and make sure reps continuously follow it—and prevent your given-up-on leads from making their way to your competition.
Effective lead follow-up involves three components: preparation, communication and execution.
Preparation is about spending 15 minutes to understand what the company offers, its market(s), the competitive situation and any applicable social media. This small effort, which is often overlooked, can mean the difference between being ignored or welcomed by the prospect. There is such a thing as taking too much time in research. Use 15 minutes as a guide and adjust from there for your specific market situation.
Communication is about following a strategic plan-of-action in sales follow-up, understanding that it takes eight to twelve touches even on the most qualified leads to schedule and complete the first call or face-to-face meetings with a prospect. Careful review, specific communications, persistence (even in the face of a no-show) are requirements for winning. And do not forget nurturing.
Once contact has been made, execution comes into play. Recognizing where the prospect is in the buying process is key to driving the sale. If a sales rep is asking the prospect to agree on a generic solution, when the prospect has not yet identified a pain or need, it will be difficult to advance the buying process. This blog does an excellent job of covering every aspect of the sales process in just a couple of pages.
Let’s discuss a plan of attack for your company. Call me (770-262-9021) or email me (dan.mcdade@pointclear.com) to schedule a free consult.