Where Leads Go to Die

The last two years have been rough for many sales and marketing departments: Head counts have been cut, goals have increased, and the emergence of technology has boosted expectations.

Those are recent issues, but the issue that persists is that sales and marketing are still too often working at cross purposes. Each side of the equation has its unique goals and its unique definition of success, and as a result, many organizations are finding that all that new technology does is help failure happen faster.

Only 26 percent of closed sales came from leads that originated with marketing, Sirius Decisions found in 2008. That should be a terrifying number for both sales and marketing pros. Marketers should see that as a direct threat to their livelihoods; sales should see that as a gigantic chunk of their time that should be spent on sales going to prospecting.

That number stems from the fact that many sales pros see marketing as clueless when it comes to delivering qualified leads. If leads fail to close on a regular basis, sales has every right to look at marketing with a jaundiced eye — and survival might demand that sales takes up prospecting to make up for marketing’s failure.

Good at the Wrong Thing

However, marketing’s failure doesn’t happen in a vacuum. Marketers are good at generating leads in the context of what they think sales wants. Here’s the real problem: Sales and marketing spend very little time talking about what “qualified” actually means.

As a result, marketers are having great success in gathering the wrong leads. Technology allows them to gather ever greater quantities of the wrong leads, which are then passed to sales and create an even bigger problem by spreading sales’ time over more and more unlikely-to-convert leads.

That’s why the hand-off between sales and marketing can be described as the place where leads go to die. When sales starts doing its own qualification of these leads, it may be seen as a necessary step — but it’s not what sales is for.

“My sales guys are great at qualifying leads,” said one software company executive I spoke to, “but that’s not supposed to be their jobs. I want them selling 100 percent of the time.”

Worse, the leads that sales discards often then simply drop off the radar of both sales and marketing. Instead of going into a nurturing system, they’re abandoned, representing a waste of marketing investment.

Put Heads Together

How do you attack this problem? The first step is to declare a truce between sales and marketing. The second step is to get both sides of the equation in the same room and develop a common definition of what a qualified lead is within the context of your company.

This shouldn’t be a situation where sales dictates to marketing; marketing also ought to be able to suggest behaviors it has seen — either in its own marketing efforts or in the practices of other successful organizations — as indicators of leads’ readiness to buy. The goal should be to develop a concrete set of criteria for lead qualification — a set that sales knows will yield results and that marketing understands how to find.

This is also a great opportunity to formalize processes for lead handling. If leads are slipping through the cracks, establish mandatory processes for both sales and marketing so that the hand-off between the two sides is well understood and well defined.

Marketing automation technology is intended to maximize the potential of all leads, and all leads cost something to acquire. It makes sense from a bottom-line point of view to ensure that leads are given the best chance to pay off once you’ve paid for them.

Rev Up

The third step is to make sure sales and marketing are goaled the same way. Sales is goaled on revenue, but most often marketing is goaled on other critieria — sheer number of leads, clicks, or some other indicators. The result is often that marketers more than meet their goals, but that revenue fails to improve. If the object is to increase your revenue, make that the common goal for both sides — goal marketing on percentage of leads that convert, or on the same sales numbers that the sales team is goaled on.

This all represents a daunting change of culture — and it’s just the first phase. In order for this change to be lasting, you’ll need to repeat the process of discussion and definition on a regular basis so that you can adjust to changing market conditions and refine your sales approach.

You can’t expect to solve your issues with a one-time meeting of the minds — this needs to be a regularly scheduled exercise if you hope to steer sales and marketing in the right direction over the long term. Otherwise, the two sides will grow apart and the old tensions will re-emerge.

The technology is easy — it’s the human part that’s hard. Once your definitions and your processes are defined, CRM and marketing automation technology can really demonstrate their horsepower.

CRM Buyer columnist Chris Bucholtz blogs about CRM at Forecasting Clouds. He has been a technology journalist for 15 years and has immersed himself in the world of CRM since 2006. When he’s not wearing his business and technology geek hat, he’s wearing his airplane geek hat; he’s written two books on World War II aviation, and his next two are slated for publication in 2010.

1 Comment

  • I think this is a very interesting article because it does prove that the discarded leads should be followed up on. To many companies today disregard this valuable resource and miss out on the potential conversion of the "seemed to be Lost" into actual sales.

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