• May 1, 2007
  • By Marshall Lager, founder and managing principal, Third Idea Consulting; contributor, CRM magazine

No More Dying by Inches

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Sales is a banquet, to paraphrase Mame Dennis, and most poor suckers are starving to death. Marketing collects tons of information on leads, pats itself on the back, and throws that data over the wall to the sales team. Frequently the sales team cannot use it, and this state of affairs leads to animosity between two important realms of a business, lost opportunities for both departments, and a sense of detachment that ranges from the customer to the executive suite. "The underlying problem is the lack of coordination that plagues the opportunity management process," says Robert Bois, research director at AMR Research. "People assumed CRM would fix this, but it hasn't; sales and marketing don't speak the same language. Sales...isn't starving--it's suffering from malnutrition. There are plenty of fresh vegetables in the house, but they're still eating Cheetos." A Gang That Can Shoot Straight Why should this be the case, when both marketing and sales are working toward the same goal? Well, not so fast--the two groups aren't necessarily working toward the same goal, or at least they're not defining success in the same terms. "Marketing and sales, unfortunately, have different scorecards. It's at the crux of the problem," says Frank Vaculin, CEO of social networking solutions provider Spoke Software. "The marketing professional talks of responses and conversion percentage--they're proud of the mountain of data they're able to get for the company. Sales feels frustration with this, because it sees it as incomplete leads with useless information. Marketing is frustrated that 'good' leads are not being followed up." A good first step toward a resolution is to set aside the idea that marketing and sales are two different organizations (although they are), and to consider them as parts of a process. "Studies around the relationship between sales and marketing show they're extremely symbiotic--one can't exist without the other," says Dave Scott, senior vice president of marketing and sales for Entellium. "Think of marketing as the aiming organization, and sales as the shooting organization. The argument between marketing and sales is one of generated leads versus accepted leads. The handoff is absolutely critical--how do you find the right customer?" CRM has not failed at this, because qualifying leads isn't really what CRM is for--you have to have actual customers before you manage your relationships with them. "Currently, most companies have a complete global view of the transaction--what they're selling and who they're selling it to. That's the quantitative view that CRM has always been good for," says George Kanuck, senior vice president of sales for Perseus|WebSurveyor. "But they want to go from just quantitative to qualitative. Managers never know why they [the customers] bought, or why they didn't." "Sales will always complain that they either get too few leads, or too many but of poor quality," says Colin Shearer, senior vice president of market strategy for SPSS. "A limiting factor is how much data is available to describe each lead. There's very little when you go carpet-bombing with a large campaign. Part of the qualification process is getting people to volunteer information. "Many of our customers blur the distinction between sales and marketing," Shearer says, and that's not a bad start for a solution. Despite seeming like a recipe for chaos, that blurring helps to emphasize the end result, not the departmental differences. What's a Lead?
One basic misunderstanding is the nature of the lead itself. Over time, the words lead and prospect have been thrown around so much that their meanings have become unclear. Shearer defines a well-qualified lead as "one with a high probability of converting to a sale, either immediately or in the near term." "Qualified prospects become leads," Vaculin says. "Some more advanced organizations know that sales and marketing must be on the same page, and share the same true measures of marketing success: closed deals in the shortest time frame." Scott uses Entellium's own past to show the detriment of raw leads, and what to do with them. "We initially went after any prospect that could spell CRM. A lot of them were still in the learning stage," Scott says. "Sales had to do more work, taking the customer from interest through engagement to deal." Too much work required from sales means the leads haven't finished cooking yet, so put them back in the marketing oven for a while. "If the customer is still learning, that's a great customer for marketing. Sales can hot-transfer the lead back to marketing, which can cultivate it and pass it back to sales when [the prospect is] ready to engage." The trick, he says, is to ascertain whether it's worth the effort. "The worst thing is to keep trying to sell to a customer that just isn't a good fit," Scott says. "Talented salespeople can sell to that customer, who will be disappointed. Sell them the right product or get them out of the pipeline." And the next time a salesperson complains about lead quality, use this: "It's sale's duty to make sure the lead is properly qualified," Scott says. "Marketing says it might be, but sales verifies it and gives feedback." Recipe for Repair "Often, a lead is not ready to buy, or the product is out of their price range, or it's a student looking for information," Kanuck says. "The sales team is supposed to survey these leads to get information to show to marketing in order to refine the lead qualification process." From that point the solution again becomes working together without artificial walls between sales and marketing. "Share a common database of information. When everybody's working from the same database where marketing has invested in populating it with good info, any response is a known quantity and sales can see how to follow up," Vaculin says. While the solution sounds simple, there's still a lot of coaxing and cajoling needed to make it happen. "Sales has to initiate the process--if they don't buy in, it won't work," Bois says. Sales must trust the data thrown over the wall to them from marketing, and measure conversion rates and figures. "Sales thinks that this is its value, being able to look at a pile of leads and just know what's good," Bois says, and that's where the difficulty can occur. "Maybe they interpret that 70 percent of responses to the red campaign will convert, but only 30 percent from the blue campaign will. The problem is, you still have salespeople who believe they can sell to the blues." Stop that sort of behavior through postprocess analysis--determining what percentage of leads are getting converted and why. "Measure your own results," Bois says. Sales teams always want to know their close rate, so show them the details by using a closed-loop marketing process. "If through analysis you discover that public companies in a particular industry are more likely to buy, you have something to work for. If you discover that talking about contracts sooner in the process makes the blue campaign respondents more likely to buy, use that." "Companies should examine successful sales and look for the commonalities," Shearer says. This can be used to feed a predictive analytics model. The model will tell you the golden questions--the set of three to five that consistently give the best leads. Sales management should apply the predictive model to all leads of all salespeople to predict close rates, forecast the pipeline, and identify key performance predictors. And it gets better with use, Shearer says: "Predictive models help with choosing the right treatment for each prospect. As you work leads through the system, you gather more information to refine it." Harsh though it may seem, managers shouldn't be afraid to reassign or terminate salespeople who won't play by the new rules. "It may require moving people out if they won't adhere to the closed-loop methodology," Bois says. If they have a reputation as top sellers, others will try to follow their faulty example, crippling the process. "Even the best sellers will fail if they don't use the data they're given." It doesn't all have to be harsh though; the upside is that salespeople can specialize. "Today we can distribute leads according to the expertise of the individual salesperson. Marketing should know sale's strengths, and vice versa," Scott says. In fact, the job gets easier when data mining is used intelligently. "Entellium automatically schedules sales calls and meetings based on input; some leads are more urgent than others." One fact is clear: Sales must be in the driver's seat to achieve any lasting positive effect. "Sales has the responsibility to act--to communicate with marketing about who the opportunities are that move the fastest," Vaculin says. Something as simple as looking at the numbers and saying to the marketers "We're seeing this segment/job title/marketing message doing really well, so let's do more" will be effective. But sales also needs to be diligent in following up, and not just one time, with one person. "If you've determined that you will try to sell to a prospect, it's worth investing time with multiple people at multiple levels to get the message across," Vaculin adds. Would You Care for Dessert? Hopefully, these techniques can help a struggling company. But where to go from here? "Sales can and should use data mining to examine the past, and better refine the pipeline," Vaculin says. "The most important thing sales has to manage is time: The better they can understand the prospect, the better they spend their time and the better the chance to sell." Vaculin also suggests that a robust database shared by sales and marketing can drive more sales. "Use data mining for peer pressure--'your competitors are doing this new thing, maybe you should too,'" he says. "Sales wants to be seen by the prospect as a source of valuable information, not just trying to close their quarterly numbers." Data mining allows real-time win-loss reporting, from the big picture down to the individual transaction. "You can group [your data sets] according to need, so you can tell how individuals on the team are doing, or how individual products are performing, or any combination," Kanuck says. "This is the stuff executives and sales managers want. Data mining can also be used to set up triggers, so that when good net promoter ratings come back, you can give bonuses to the people most responsible." Kanuck says that the data gleaned from customers "is not just for cross- and upsell, but for really talking to customers to understand what and why they buy." If sales doesn't want to be seen as only in it to get business, it needs to stay engaged after the fact. "It's like a tutoring program for sales. Done through CRM, it's an unstructured process that sales should own--unstructured processes are where sales shines." Marshall Lager Banquet Table Tips 1. We're on the same team: Marketing and sales need each other; get them on the same page and speaking the same language. 2. Take what you need: A ton of prospect data isn't as good as a pound of focused, filtered data. 3. Throw nothing out: Leads that aren't useful for sales right away might be great candidates for marketing to cultivate. 4. Lather, rinse, repeat: Feed sales and marketing data back into a predictive model to continually refine your information. 5. Communication is key: Sales has to keep marketing informed of what leads are the better ones, and what data is most useful. --M.L. Contact Senior Editor Marshall Lager at mlager@destinationCRM.com. Click Too Much Pork for Just One Fork to read the companion feature.
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