Lead Generation: Sales and Marketing Contract

Lead Generation: Sales and Marketing Contract

According to prospect development company, PointClear, the average salesperson closes 20% of the leads they are provided by marketing, but 33% of the leads they personally qualify. In contrast, optimized salespeople close 50% of the leads they are provided by marketing. If the average deal size is $50,000, based on 100 leads, the difference between closing 20% and 50% of the leads provided by marketing is $1,500,000 (or 150%) in additional revenue. Optimization then means keeping salespeople selling with qualified leads from marketing.

Salespeople qualifying their own leads is expensive. Thus, it is more cost-effective (and profitable) for marketing to perform this action. Optimized sales and marketing then requires contracting on what constitutes a qualified lead. For marketing: What attributes are needed for a qualified lead to be passed from marketing to sales? How many qualified leads are needed each month? For sales: How long before a lead is to be contacted? How many attempts should be made for each lead? If there is no contract between the two functions, waste occurs.

Traditionally, marketing generates leads for sales from campaigns, events, etc. The problem is that marketing is generally paid for lead quantity, not lead quality. Marketing technology also adds poorly qualified leads into the sales funnel faster and more efficiently than ever. As a result, sales ends up disregarding the leads from marketing as “junk.” That is, the majority of customer contacts have no authority, no budget and undefined timelines. Marketing then complains that sales does not hold up its end of the bargain.

What marketing leaders should say during business reviews is, “We added 20 new leads into the system this month, which makes a total of 100 leads currently under development. Last month, sales received ten highly qualified opportunities representing $500,000 in potential revenue. The details are as follows.” Salespeople do not need more leads, they need more qualified leads. Leads must be carefully qualified and nurtured by marketing to ultimately increase the volume of closed opportunities by sales.

Instead of removing itself from the process, marketing should stay close to sales. Remaining involved in the sales process ensures real-time insight into lead quality and losses. Because the Internet has greatly empowered buyers, the transition from marketing to sales is even more important. Transitions must be seamless, relevant and move conversations forward. Salespeople should not be restarting conversations. They should be continuing and expanding them. Maintaining momentum is critical.

Optimized organizations create a culture of rigorous self-analysis and -review. What is working, why is it working and how can we do better? They also analyze the cost of generating qualified leads (not just total leads) and measure their progress through the process, holding both sales and marketing accountable. The ultimate goal is for the company’s VP of Sales to say, “We cannot hit our number without the qualified leads that we are receiving from marketing” and the VP of Marketing to say, “Thank you for your partnership.”

All contents copyright © 2012, Josh Lowry. All rights reserved.


Leave Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: