Every company has a few sales and marketing "leaks"—misalignments or improper practices that can lead to a waste of marketing dollars and lower-than-expected sales numbers. The problem is, in today's tough business climate, companies can no longer afford to squander resources, or let even a few good sales opportunities slip through their hands.
Or so you would think. But did you know in most companies, over 70 percent of leads generated by marketing are left untouched by sales? Such leakage occurs when marketing spends big dollars on large-scale campaigns that deliver high volumes of leads, but very few genuine prospects. This, in turn, causes sales to largely ignore marketing efforts, creating a nonproductive cycle that needs to be stopped.
This article takes a look at some common leaks in marketing and sales organizations, then shows you how to go about plugging them up. The end result will be more efficient use of resources and significantly greater revenue performance.
1. Focusing on lead quantity, not quality. Traditionally, marketing departments have been focused on lead quantity or cost-per-lead, but not on actual lead quality. For this reason, most of the leads they produce are viewed by sales as low-level leads that are not well qualified, and therefore not likely to turn into closed business.
You can think of it this way: When marketing generates a large pile of leads, but no lead filtering or lead development takes place, what the sales force gets is simply that—a large pile of leads.
Certainly, there are some hot prospects in the mix, but to sales reps time is money, and locating them among the hundreds of low-value leads is like looking for a needle in a haystack. Deeming this not worth their time, they tend to go off looking for leads on their own…and usually not very successfully.
In contrast, when marketing departments are tasked with generating a smaller number of higher-quality leads, they can actually help to improve sales performance. This is because when sales reps are given fewer but better quality leads, they are able to focus their time on the most likely buyers. Such efforts restore the value of lead generation programs.
Sales and marketing teams can start this turnaround by working together to clearly and fully determine what defines a "sales-ready" lead within their organization, as well as the point at which a lead is well qualified enough to be handed over to sales.
2. Marketing to everyone. Most companies today still market too broadly, yet manage to miss a large percentage of their most likely buyers. A typical example is a company that perceives its target market to be the Fortune 500. But the Fortune 500 is actually comprised of several thousand companies, so do you prospect to all of them—including their divisions and subsidiaries—or do you target only the parent corporations?
The answer is, it depends, but everyone agrees it is a waste of time and money to nurture prospects outside your target industry or below your minimum size requirement. The bottom line: Identify the best targets and market to them specifically.
Not to mention, some leads are inherently more promising than others. If your goal is to capitalize on leads with the most sales potential while reducing time and resources spent on weak leads, then properly identifying them through segmentation is key. Because some market segments respond higher than others, it just makes sense to identify those segments and concentrate on them.
Initial segmentation is a matter of basic research on each prospect to weed out those who aren't really a match for your offering, and also to begin grouping them into related companies you'll want to target similarly. Most companies find it helpful to group leads by industry, annual revenue, employee headcount, or similar high-level characteristics. You can then test these groups to determine your highest responders.
3. Focusing only on short-term leads. Companies typically want short-term leads, simply because they feel an acute need for results now. That's truly unfortunate, because prospects that don't respond immediately, or who say when contacted that they aren't interested, often represent the broadest base of potential new customers. Companies focusing strategically on long-term opportunities realize the highest rates of lead conversion, by far.
By nurturing quality leads over time, companies are best able to forge deeper, genuine relationships that ultimately translate into business. Nurturing longer-term leads is especially important in our current economy, as prospects are stretching the buy cycle and making purchasing decisions more slowly.
4. Giving up on prospects too soon. Just like you don't want to abandon leads that initially say they're not interested, you shouldn't abandon leads because they don't respond to your first few contact attempts. Prospects often don't respond because they just aren't yet ready to buy, or are simply focused on something else.
In our age of communications overload, it can easily take 10 to 12 touches to identify whether a prospect is sales-ready. To further increase your chances of reaching promising leads, be sure to employ some mix of media—quality outbound calls, voicemail messages, e-mail, and direct mail—to touch prospects repeatedly over time.
Multi-touch, multi-media campaigns work because they build familiarity with busy decision-makers and increase the potential of impacting them at a time of need for the solution being offered.
They also increase the chance of dovetailing into a particular prospect's communications preferences, as some people are more email-oriented, others more voicemail-oriented, and still others more receptive to traditional direct mail or live conversation.
Plugging the Holes
The reality is, our business climate has changed and sales numbers are harder to hit now than a year ago. The implication is marketing and sales organizations need to work leaner and smarter to positively impact their company sales performance.
By taking a look at your own sales and marketing practices, you can see where you might be "springing some leaks" that require patching. By using some of these principles, it is possible to increase sales revenue while also substantially reducing your marketing costs.
Dan McDade is founder and president of PointClear, a prospect development company.