Above the Sales Funnel
CSO Insights asked the 1,275 participating firms in its most recent sales performance study to share with us what specific initiatives they were putting in place this year to improve sales effectiveness. The figure below shows a summary of their responses.
It is a fact that companies are considering a lot of different choices, including sales training, channel management, and sales knowledge management. But at the top of the list, cited by 44 percent of the firms surveyed as one of their top three priorities, is optimizing lead generation programs. So, the highest focus for sales organizations is not on just closing what is in the sales funnel, but also trying to improve performance above the sales funnel--by generating more, better-quality leads.
What do companies mean when they say they want to optimize lead generation programs? I recently presented to a group of 45 sales and marketing executives at a three-day summit sponsored by the American Marketing Association and Rollins College. In posing that question to attendees, the input we received was that lead generation optimization is not one single thing but several.
The first objective is to identify the prospects with the highest likely need for the firm's products and to then develop targeted messaging to help inform and educate prospects on what the company has to offer. An enterprise delivers those messages via a variety of methods: direct marketing, digital marketing, telemarketing, et cetera. If the prospect is ready to act, the lead needs to be quickly routed to the right sales resource.
Second, if the prospect is interested but not ready to act, the lead needs to be placed into a formal lead-nurturing program to cultivate the prospect's interest until the time is right for the buyer to consider the vendor's offerings.
Finally, throughout the life cycle of an opportunity the disposition of all leads needs to be tracked so that intelligent decisions can be made regarding what messages and marketing programs are the most effective and which are not. The task can be complex--to successfully optimize lead generation programs, companies will need to blend business process redesign, target-marketing methodology innovations, demand generation and CRM technology, and improved program performance analytics.
It's no small undertaking, and sales and marketing executives may well wonder if the investment of time, resources, and money is worth it.
To help answer that question we compared a series of key sales performance metrics of companies that excelled in lead generation optimization against the rest of the firms surveyed. The numbers are compelling:
- Reps making quota are 9.3 percent higher.
- Conversion rates of leads to first calls show an improvement of 16.5 percent.
- Win rates rise by 7 percent.
- Ramp-up times for new sales people decrease by over 10 percent.
Our recommendation to firms looking to turbo charge sales--based on these numbers--is to turbo charge lead generation. The CRM technologies are in place today to achieve this goal, and the ROI is there to justify it.
Jim Dickie is a partner with CSO Insights, a research firm that specializes in benchmarking CRM and sales effectiveness initiatives. He can be reached at www.csoinsights.com
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