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In 2016 CSO Insights reported that:
Fewer than 60% of B2B sales reps are hitting quota
Just 42% of marketing qualified leads are accepted and worked by sales
The #1 sales execution challenge is the lack of qualified leads
Sound familiar? It should because the situation has not changed much in the past several years.
Following are the top five resolutions I recommend that you take to improve results in 2017.
We developed our comprehensive Lead to Revenue Calculator to factor in metrics frequently ignored by other planning tools. Our calculator is designed to help you adjust the numbers to fit your company; so multiply, add zeros, adjust percentages or make whatever other changes you feel will shed light on your lead generation situation.
The assumptions embedded in the example above are industry benchmarks. For example, the industry estimates that inbound marketing efforts will produce about 35% of desired revenue each year – the balance has to come from existing business or proactive outbound marketing. Some of the other assumptions are estimates based on SiriusDecisions Demand Waterfall metrics. While many industries estimate that sales reps source 60% of their own business, the reality is that each company should provide much more support. Hence the 35% used in this example.
To run your own numbers, click here.
A friend of mine said: “even a man lost in the woods knows where he wants to go.” I believe that every marketer and sales executive wants to do a great job, but they approach lead definition in silos. As a result, they all stay lost in the woods. That is why so few marketing qualified leads become sales accepted leads. Then, marketing resorts to a cost per lead strategy that exacerbates the problem. Is someone who downloaded a white paper – costing your marketing department $25 – 50 a lead? Is someone who scores above a certain threshold in marketing automation a lead? Is someone who completed a form on your website a lead? Maybe, but probably not.
Unfortunately, establishing a universal lead definition (ULD) is not going to come from some Kumbaya moment around the campfire attended by marketing and sales. In order to establish a ULD that is understood by and agreed to by the entire company there will have to wide participation by executive management including operations, finance, marketing, sales and other executives. How important is this? Critically important.
Look at your own company. How does a lead progress in your organization? Are leads thrown over the fence from marketing to sales and lost in a black hole?
Some guidance: a ULD is not BANT, ANUM or one of the other formulas used today. These formulas do a great job of disqualifying opportunities that could actually be great prospects if they are worked right. The high scoring “leads” that are sent to the field are often column fodder exercises where you are competing against a competitor who, because they started earlier and were more agile, won the business before you had the chance to compete for it. While there are millions of words written about this subject, a ULD is going to come down to: firmographics, decision-makers and influencers, pain or need (no matter what anyone tells you), a compelling event and the process for an evaluation. The best leads are going to be those where a sales rep gets involved early in the process – not when the prospect is 57 – 70% of the way through the buying process as some inbound pundits would have you believe. Doubt my word, read this from Julie Schwartz at ITSMA.
Once a ULD has been agreed upon, it needs to be enforced. The judicial branch inspects exceptions. An example - the lead is proactively rejected by sales: The judicial branch determines if the action was appropriate (the lead did or did not fit the ULD); or if the lead was rejected for what SiriusDecisions calls “non-intuitive reasons” (I called three times and they did not call me back so it was not a lead). Another example – no feedback from sales: Most leads end up in a black hole sometimes called CRM. A timeframe SLA must exist between marketing and sales on a lead being rejected or accepted by sales.
The Judicial Branch won’t work if the judges include only members of marketing and/or sales. Operations, finance and others in executive management need to be involved because they with find it additive and enjoy the control this process makes available. And, as tedious as this will be for the first month or two, it will pay huge dividends in the long-run.
Nurturing is essential for successful inbound and outbound lead generation. In fact, I propose that nurturing is the most underutilized marketing activity at a marketer’s disposal. Additional contact using multiple touches and multiple media—including phone, voicemail and email—across multiple cycles is well worth the time and expense (which is nominal):
Standard B2B lead-generation programs produce an average 3 – 7% lead rate.
Advanced lead-generation programs (which include nurturing) produce a lead rate three times higher (see table below).
Before we get into the details, note that there are three groups of prospects that require nurturing:
Marketing Pipeline. These are prospects with a specific planned next step to be taken within a reasonable timeframe.
True Nurture Opportunities. These are fully qualified prospects who are not immediately interested.
No Response. These are contacts past the point of diminishing return on a given touch cycle.
Accountability is not about punishment or blame. It’s about helping others reach their goals through purposeful, sustainable action. It’s about end-to-end success. It’s 2017, and the new era of accountability is here.
Specifically, marketing must:
Be accountable for lead quality, be open to taking leads back and nurturing them until they are “sales-ready” and measure their impact in terms of revenue driven by their activity
Sales must:
Be accountable for effective lead follow-up, work each and every lead to win/loss or return to marketing for nurturing, and forecast realistically and accurately
In short, Accountability = Account-Based Marketing.
Account-Based Marketing, where sales and marketing strategically target high-value accounts, has accountability built in. The two organizations work together to approach decision-makers in a highly personalized, coordinated way, to move the account successfully through the pipeline. They use the right tactics, at the right time, with the right channels, to create the personal interactions that move the revenue-generation meter.
That’s a wrap. Happy marketing and selling in 2017!
Dan McDade is President and CEO of PointClear, LLC, a prospect development firm that helps B2B companies drive revenue by nurturing leads, engaging contacts and developing prospects until they're ready to purchase.
