Spend a day inside most business-to-business organizations and you’ll come to the conclusion that Sales and Marketing need to be better aligned. The source of frequent friction and open-conflict between the two revenue-generating departments is almost invariably traceable to the topic of “sales leads.” Ask the Sales Manager and he’ll complain that Marketing isn’t providing enough high-quality leads. Spend a few minutes around the water cooler with the Marketing Manager and you’ll hear tales of how Sales practices lackadaisical lead follow-up and poor record keeping. This situation is widespread and extremely detrimental to the profitability of organizations both large and small. Serious money is being spent every quarter on lead generation programs and headcount within Sales and Marketing departments. The financial health of the organization depends on these two organizations working together productively.
So, what’s a CEO to do?
First, ask your Sales Manager if he/she knows how many deals need to be closed in order to reach the revenue objectives for the next two quarters. Odds are pretty high that the Sales department isn’t thinking of number of deals, so they don’t have a solid handle on the amount of effort necessary to generate the required level of deals. Many companies, sadly, don’t even know the average selling price of their products.
Next, stop by the Marketing Manager’s office and ask him/her how many contacts their programs need to generate to deliver a closed order. Chances are good that your Marketing ace may have data related the conversion of impressions to leads, but struggle when it comes to knowing how many qualified leads convert to prospects. So, the Marketing department won’t be able to say how much effort (lead generation) is required to get a deal either.
It’s time for the CEO to insist that Sales and Marketing integrate the lead pipeline with the sales pipeline into a “buying pipeline”, a customer-centric planning and management tool that keeps the company steadfastly focused on the customer at every stage of the cycle. The buying pipeline tracks the entire course from target to contact, to suspect, to lead, to qualified lead, to prospect and, finally, to customer. Using a buying pipeline approach encourages Marketing and Sales to work together to understand where each opportunity is in the pipeline and who has the primary responsibility to move it forward. A useful guideline is for Marketing to own the processes from target to qualified lead; and Sales to own the processes from qualified lead to customer. Ownership does not mean that the two functions work in isolation. Unfettered communication between the functions is essential for both developing and honing the pipeline.
A solid pipeline tool also details the many steps and the consequent time involved in each phase. It’s an easy leap to see how the pipeline can be used to create a dashboard for measuring marketing and sales progress toward revenue goals.
If you embrace this approach, start the buying pipeline as far back as the target, rather than later with a qualified lead, the company can gauge which programs are most effective in reaching viable targets. Beginning the analysis at the qualified lead stage reveals only half of the story.
Each stage of the pipeline has different demands for the company and product. For example, at the target and contact stage marketing must create awareness for the company and product. After all, people buy from people they know. At the suspect and lead stage, marketing is focuses on getting the audience more familiar with the company and product. People buy from people they like. At the lead stage, Marketing and Sales collaborate to determine which leads are qualified so the best opportunities can be pursued. It is at this transition stage that sales takes the helm in pursuing qualified leads while marketing needs to nurture those opportunities that are not ready to be harvested.
At each stage along the way monitor your progress. You’ll want to keep tabs on how many people/companies populated each stage and how many advanced to the next stage. With a little history, a company can assess its conversion ratio and begin to fine-tune its efforts, propelling more opportunities to conversion faster. Over time, employing a buying pipeline provides a consistent way for both small and large companies to track conversion ratios, identify bottlenecks, and monitor the sales cycle. Most important of all, a buying pipeline enhances a company’s ability to win new customers–and thrive.
VisionEdge Marketing, Inc, is a leading data-driven metrics-based strategic and product marketing firm located in Austin, Texas. The company specializes in consulting and learning services that help organizations use data to make fact based decisions to address market, customer, and product opportunities and to improve and measure marketing performance. For more information, go to www.visionedgemarketing.com.
About Nathan Kaiser
