What's the Cost When Sales Tries to Do it All?

I just saw some of the results that @Gerhard20 posted after reading an advance copy of CSO Insights' new 2010 Sales Effectiveness Study. I had a really strong urge to bang my head on my desk.

Let's talk about three of the research findings:

Research fact: Forty-seven percent of the companies surveyed (1,600 companies participated) reported that their salespeople generate their own leads.

Research fact: Nearly 62 percent of all sales leaders surveyed say that their ability to generate new leads needs improvement.

Anyone see anything askew in this picture?

Now look at this:

Research fact: Thirty percent of all forecasted deals that didn't materialize were lost to the competition. Why? These competitors either had a better relationship with the customer or received a better price or terms.

Why is it that sales thinks they have to do the whole enchilada? Even if they're not the best suited for the task at hand?

Let's talk about lead generation for a minute. More than 750 companies said their salespeople generate their own leads. What the heck is marketing doing? Or are salespeople just discarding the leads marketing gives to them? If so, I'm guessing it's because marketing isn't nurturing and qualifying the leads to give sales what they need.

But, consider that salespeople should be having worthwhile conversations with short-horizon buyers, not generating leads. Unless of course your sales cycle is weeks, instead of months. Salespeople are after the sale—not the nurture. They want to work with folks who are actively buying something, not spinning their wheels with contacts who aren't even sure they're "looking." Salespeople are mostly hunters. It's just the way they're built—at least the good ones.

And, if salespeople were talented at generating a volume of leads, not just contacts, then the need for lead generation improvements would be far lower than 62 percent.

All of this said, the statistic that really frustrates me is the loss of forecast deals to the competition because they had a better relationship. [For the sake of this post, I'm ignoring price and terms because if you're losing deals based on that, you haven't added enough value to overcome commodity status.]

Relationships are the name of the game. For marketing, for sales and for customer retention. How is it possible that so many companies still fail to "get" this? How is it possible that companies still haven't woken up to the fact that selling is really all about BUYERS and providing whatever they need to make the purchase decision in your favor?

The key point is that building a relationship can't just be a trick your company drags out during sales interactions. Relationships are built over time. Value perceptions take more than a couple of conversations and a white paper.

Building relationships should be an ongoing process that serves as a lead generation process because people come to rely on your company for insights, education and expertise. That's what brings referrals, gets your company in conversations that include your buyers and helps convince them you're worth considering ahead of other alternatives.

Then again, only 51% of salespeople are making quota. Yet companies are living with that.

Can you think of any better reasons that marketing and sales alignment should be at the top of the priority list for 2010?

Comments

[Meredith Smith]

I agree, why is it always sales versus marketing? It seems both groups should be working hand-in-hand to create a seamless process for driving leads and meeting (or exceeding) the company's revenue objectives. As Ardath mentioned above, technology can help marketing departments get better leads to sales. Lead management systems, such as LeadLife, in particular provide the mechanism to efficiently capture, track and score leads. The outcome of the process is to drive better-quality leads to sales. Additionally, lead management systems also help marketers to automate the process of nurturing leads over time. Consistent nurturing will continue to drive more quality leads over the life of a typical lead generation campaign.

[Don Montgomery]

One of the issues is this: When salespeople receive leads from marketing, they start their follow-up calls and discover that the first 5, 10, maybe even 20 calls they make all end up with "Not interested". As a result, they say "The leads are garbage. They're not getting me good leads," and they don't bother to keep working the call-down list. They now have a cop-out and an excuse for failure: Marketing doesn't give me good leads. But when salespeople work a contact list, or a Hoovers list, and do their own prospecting, they have no one to blame but themselves. They feel "in control" of the lead generation function, even though it's horribly ineffective. That's why salespeople blame marketing and keep trying to do lead gen themselves. The salesperson feels that he or she is the better "lead generator" because they aren't thinking of all the rejected calls as "leads" in the first place.

The single most important thing to do is to start with both the salespeople and the marketing people working TOGETHER to define what a "quality lead" is, what the ideal prospect is, and what constitutes "success". Then move on to defining roles and expectations. "Marketing will do 2 campaigns per month. Each campaign will deliver 100 interested leads to you. You should expect that only 10 of those will be sufficiently interested enough or compelled enough to move to the next level of qualification. 9 out of every 10 follow-up calls you make will not yield a pre-qualified prospect."

When expectations are in sync, all parties can do their own jobs and the yield can be maximized.

Don Montgomery
WinGreen Marketing Systems
http://www.WinGreenMarketing.com

[Tibor Shanto]

I find this post and thread funny. It seems sales can do no right and marketing can do no wrong when it comes to generating leads. First off, while there are a lot of great stats in the original post and related study, stats are stats and as such usually support an agenda, not necessarily the facts. The one key stat, which is missing, is how many of those companies have marketing functions. Real marketing, qualified to strategize, create and execute proper campaigns. Absent of that it is left to sales, whether they want it or not. Perhaps the 62 percent that stated they wished for lead generation improvements were lamenting the lack of marketing, or quality of the marketing.

To Don's point, if as a sales person I am indeed looking to be efficient in driving revenue for my company, and my hit ratio is better than 10:1 on leads I source vs. those sourced by marketing, then why would I use the less efficient source. I would want my marketing people evangelizing how they will improve the quality of leads rather than rationalizing that "9 out of every 10 follow-up calls you make will not yield a pre-qualified prospect." Why doesn't marketing make the 10 calls and pass the 1 to sales, now that's qualified!

Perhaps I miss the gist of the thread because I really do not agree that "selling is really all about BUYERS and providing whatever they need to make the purchase decision in your favor?" Really, providing "whatever", sounds like giving not selling.

Tibor Shanto
www.sellbetter.ca

[Ardath Albee]

@Meredith - thanks for your comment. I always appreciate it when you drop by.

@Don - I agree with Tibor's response to your comment.

@Tibor - I'm happy to have provided amusement for you! Actually, you did miss the point. I wasn't blaming sales or giving marketing a free ride. I was calling companies on the carpet for not better utilizing marketing or - as you suggest - enabling "real marketing."

And, yes, I think you missed the gist. Or perhaps I missed yours. I'm not sure I understand the difference between "giving" and "selling" in the context you used.

As an expert salesperson, don't you share your expertise when you help buyers to buy your products or solutions? I'll bet you do. You've been selling successfully for over 20 years. You have a lot of valuable information your buyers can rely upon. And every time you share your knowledge with someone, you're "giving" something while trying to guide them to buy from you (selling).

Thanks to all of you for taking the time to share your thoughts!
Ardath

[Tibor Shanto]

Exactly my point. Glad we can agree.

Tibor

[barbra gago]

To add to the "giving" aspect of this, I think marketers are becoming more and more responsible for making sure buyers do have what they need, as you've suggested Ardath, and if Marketers can focus on providing that value (which Sales sells) they will probably be better positioned against competitors, and with some nurturing if needed, will be better qualified for sales.

[Tim Holmes]

So very true.The way its done sure looks like its changing.

[Don Montgomery]

re:

"my hit ratio is better than 10:1 on leads I source vs. those sourced by marketing, then why would I use the less efficient source"

===> Two points: (1) When I was a salesperson who did my own prospecting from a purchased list, my hit rate for finding an INTERESTED (not even qualified) lead was 1 in 60. The typical hit rate today for total contacts to Interested lead is 100:1 so your scenario isn't likely. (2) As a salesperson doing cold calling, I can only reach perhaps 100 to 200 new calls per week, yielding 2 to 3 INTERESTED leads. Marketing can deliver 50 INTERESTED leads per week to each salesperson. That's 25X more. Sales is all about numbers. It would be ridiculous to consume sales people's time trying to find interested leads from the vast wasteland of total target contacts. They'll never match the sheer volume that marketing campaigns deliver (at equal lead quality).

"Why doesn't marketing make the 10 calls and pass the 1 to sales, now that's qualified!"

===> This works only when marketing is incented to deliver truly qualified prospects, which means they share in the commissions (which, as a sales guy, I would never stand for!). Otherwise, marketing will just throw crap over the wall after making the qualifying calls. It can work, but the incentive and ownership to decide which leads should be converted to qualified prospects really exists in the guys who pick up the commission and have to live and die by the quality of the prospect. This is in opposition to how modern lead gen gets done, where online techniques deliver interested leads at the top of the funnel. Using inside sales to qualify marketing-generated leads before passing to outside sales is a good model if you can afford the headcount. Marketing owns maximizing how many people they can find that have interest in the product, but they also own the ratios of how many of those are indeed qualifiable. Pay marketing to generate volume of interested leads that match the target profiles. Pay sales on closing business.