Today’s revenue cycle is broken. Sales reps spend half their time cold-calling leads instead of interacting with interested prospects, while marketing invests its shrinking budget on costly programs and prospect lists that yield low conversion rates. The two departments seemingly operate in separate silos, interacting only when a lead is handed off from marketing to sales, and this lack of teamwork results in 80 percent of the leads ultimately being wasted. In a tough economy, we can’t afford to waste a single lead, but today we are discarding them by the truckload.
This problem is exacerbated by an increasingly hostile buying climate. It has never been more difficult for B2B businesses to sell their products because of the changing consumer psyche. The availability of knowledge on the Internet has put the power in the hands of customers, who generally prefer to be left alone to do research on their own. It is only in the last third of the buying cycle that today’s prospects are interested in meeting a sales rep. This new buying environment, combined with an ailing economy and the entrenched silo structure at most companies, presents a unique business opportunity. It’s time to fix the revenue cycle, and this requires a fundamental change in the way we do business.
Some of the ground we have lost in the Internet cloud can be recovered by using technology to our advantage. Although the Internet has shifted power to the buyer, technology also has the ability to give back some of what it has taken. Today’s marketing automation solutions can track and store demographic and behavioral data and automatically trigger drip campaigns to ensure that leads will no longer slip through the cracks. However, technology alone is inadequate. To fix the broken revenue cycle, we must tear down the borders that traditionally divide marketing and sales, and change the way that these two teams collaborate across a single revenue cycle.
Prospects Ain’t What They Used to Be
In the past, marketing and sales operated in separate worlds. Marketers focused on generating awareness and demand, while sales reps took the lead in interacting with prospective customers. In those days, leads were passed from marketing to sales early on in the purchase cycle, and a savvy sales rep established a personal and trusted advisor relationship over time.
Today, however, prospects aren’t ready to talk to sales until the last third of the buying cycle, which places the responsibility of cultivating a relationship with the buyer in marketing’s hands. Lead management solutions can help marketing with lead nurturing, but technology can only go so far. To ensure that no leads are left behind, we must reject traditional norms and align marketing and sales teams. In order to conquer this last frontier of productivity, marketing and sales must collaborate at every stage of the revenue cycle — from demand generation and lead management to the pursuit of revenue and customer loyalty.
Here are three areas for improvement:
- Step 1: Lead Nurturing: Approximately 95 percent of Web site visitors are not ready to talk to sales, but 70 percent of them will ultimately make a purchase — if not from you, then from a competitor. How can you build a trusted advisor relationship with a prospect that isn’t ready to take your call? How can you gain every possible competitive advantage during this “quiet period” of independent research? The answer is lead nurturing, but marketing can’t do it alone. Marketing and sales must come together and jointly decide how to pursue this savvy audience and what constitutes appropriate and timely contact.
- Step 2: Lead Scoring: With a lead nurturing strategy in place, marketing and sales teams must work together to develop a lead scoring framework that will facilitate the prioritization of leads. By assigning different point values to different behavioral and demographic cues, and by determining a threshold for what qualifies as a “sales-ready” or “actionable” lead, these two organizations can ensure that all leads are properly nurtured and that only the highest-quality leads get assigned to a sales rep.
- Step 3: Sales Insight: Just as we must establish a framework for what happens before the lead is passed to sales, we must also develop a protocol for what happens once the lead is flagged in our CRM system. With marketing automation software, even modest-sized companies will generate hundreds of thousands of leads a year, each of which is accompanied by a slew of demographic and behavioral information.
No Lead Left Behind
In order to prevent flooding your sales reps with web analytics data, marketing and sales must collaborate again to determine what leads are the highest priority (based on the lead’s lifetime value) and the most urgent. By jointly deciding what qualifies as a hot lead or actionable behavioral cue, your sales reps can focus their time and attention on best bets, and trust marketing to segment and nurture less active leads.
Marketing and sales alignment is a popular refrain even at companies firmly entrenched in tradition and bureaucracy. Today’s buying climate and technology present a unique opportunity to drive revenue through the continuous “handshake” between marketing and sales. By tearing down traditional borders and increasing collaboration between these two organizations, your company can achieve dramatic productivity gains and ensure that no leads get left behind. With a combination of marketing automation and these best practices, your company can mend the broken revenue cycle and ignite explosive revenue growth in any business climate.
Phil Fernandez is president and CEO of Marketo.