September 14, 2012
By Dan McDade, founder and president, PointClear

Aligning Your Sales and Marketing Processes

Neil Rackham, author of SPIN Selling, spoke at the 2012 Business Marketing Association (BMA) annual conference and said the following: "Sales and marketing are two functions with an identical mission, so how can they be like ships passing in the night?"

I frequently challenge audiences to find the oldest mention of sales and marketing alignment. The oldest I have found so far is from Viswanathan and Olson, 1992: "... poor alignment between these two functions is common, driving to inconsistencies between marketing strategies, sales management processes, and sales force activities."

In other words, after 20 years of talk about sales and marketing alignment, we have very little to show for it.

There are two reasons this problem isn't just going to go away:

1. It requires a C-level fix. This is not about sales and marketing gathering around the fire singing "Kumbaya" (according to Wikipedia, this song was originally associated with human and spiritual unity, closeness and compassion, and it still is; however, more recently it is also cited in satirical or cynical ways which suggest false moralizing, hypocrisy, or naively optimistic views of the world and human nature). No one ever built a statue to a committee, and it is going to take a single individual with power and vision to solve the alignment problem.

2. It requires the development of some processes and the measurement of key metrics.

The purpose of this article is to provide C-level executives with the information they need to get marketing and sales teams working in unison to nurture prospects, close business, and drive revenue.

Two Processes and Key Metrics

Failures to solve problems at the top of the funnel are simply magnified as you move down through the sales process. No amount of investment in the mid- to late stages of the sales process can overcome inefficiency at the top of the funnel. So, here are two processes to fix and the key metrics to watch:

1. Lead Hand-off: The problem in most companies is that lead hand-off is a one-way street. Leads are created by marketing, thrown over the fence to sales, and end up, for the most part, in a black hole (research firm SiriusDecisions estimates that in average companies, just over one-third of marketing-qualified leads are accepted and qualified for work by sales—and only 20 percent of those close). The process required is establishing a common definition of a lead, which should include the definition of a qualified decision maker, a specific pain or need in the environment, and some form of compelling event that makes it more likely that action will be taken sooner rather than later.

It is likely that you have heard marketing complain about lead follow-up and have heard sales complain about lead quality. If you have an agreed-upon lead definition and require that leads are either accepted or not (by sales) within a day or two of their development, then you have a mechanism to evaluate lead quality and sales effectiveness in following up leads. Those leads not accepted should be evaluated, reheated, or nurtured, and put back into the sales process when they are "sales ready." If the sales lead is accepted by sales, you should measure the percentage of those leads that are actively worked by sales and become sales qualified (you should associate an opportunity with the prospect at this point—in other words, it should be forecasted). Finally, the percentage of accepted leads that become closed deals should be measured. Most of the time, sales reps provide little visibility into the "pipe" until they are pretty sure they have a good chance of winning business. Lack of visibility from lead development through closure destroys marketing and sales ROI.

As an aside, if your team is using BANT (budget, authority, need, and timeframe) as the lead definition, they are leaving A LOT of business on the table. A recent DemandGen Report survey found that more than 80 percent of significant purchases expected to close in the next year are NOT budgeted. Likewise, these same purchases have no specific timeframe. So, if you are only working leads that are BANT qualified, chances are that you are working on deals that have already been designed and won by someone else.

2. Lead Source Analysis: The question "How much should a lead cost?" is answered inthis whitepaper (available for download without registration). The short answer is probably more than you think, but probably a lot less than you are currently paying. See the following for more information (this is "live" data, but the names have been changed to protect the guilty):

Lead Source	# of Raw Leads	Cost per Raw Lead	Cost per Qualified Lead
Proactive Outbound & Nurturing	402	$0.00	$1,357.25
Webcast w/Authority	1,162	$13.89	$1,375.02
Webcast-Product	206	$4.39	$1,727.00
Content Syndication	3,117	$23.15	$2,662.24
Educational Webcast	139	$56.07	$6,231.00
Title Targeted Webcast	264	$93.02	$12,483.12

Note that, as an example, while the cost per raw lead for Content Syndication is $23.15, the percentage of those raw leads that became real leads was just 1.28%—driving up the real cost per lead for that category.

In the example above, the Content Syndication leads are valued by marketing because marketing is measured on the NUMBER OF LEADS and not the QUALITY OF LEADS. Content Syndication leads are not valued by sales because they would have to work close to 100 raw leads to find one real lead. They just won't do it. As a C-level executive, if you were notified every time sales rejected a Content Syndication lead, you would soon find a way to fix that problem. Right now, your company is shelling out a lot of money to generate Content Syndication or other relatively expensive sources of leads that no one is following up on.

Fixing problems at the top of the funnel is the most efficient way to increase marketing and sales ROI. If you don't fix these problems, we may still be talking about this in 2032.

Dan McDade is the founder, president, and CEO of PointClear, a prospect development company. PointClear works with C-level, sales, and marketing executives of B2B companies, optimizing processes and driving revenue. He is the author of the book The Truth About Leads and of of ViewPoint | The Truth About Lead Generation, http://blog.pointclear.com/blog/, a blog exploring issues related to B2B sales, marketing, and lead generation.