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Sales and Marketing Best-Practices: Seven Heavenly Virtues

by Dan McDade  |  
January 25, 2011
  |  12,841 views

In this article, you'll learn...

  • Seven best-practices that will help you align Sales and Marketing
  • How to stimulate sales by having Sales and Marketing operate more efficiently

Sales and marketing best practices are universally desirable—but, too often, elusive.

Why? And more important, what sales and marketing processes are recognized as best-practices?

First—so that we share common ground in this discussion—I offer this definition of best-practices from the U.S. Government Accountability Office:

"The processes, practices, and systems identified in public and private organizations that performed exceptionally well and are widely recognized as improving an organization's performance and efficiency in specific areas."

We are all too familiar with the inverse: Sales and marketing processes don't perform; they are inefficient, and they waste resources and dollars. In most companies, such a lack of productivity is rooted in the lack of alignment between Sales and Marketing.

Take lead definition, for example:

  • Marketing "leads" are high volumes of unqualified prospects that have raised their hands and expressed interest by responding to marketing initiatives. But Sales requires leads that meet specific criteria and deserve attention from highly compensated reps in the field.
  • Prospect databases are not segmented and tested to ensure that marketing programs target only high-value prospects most likely to close. Marketing doesn't have the resources or skill sets to qualify and nurture hundreds and thousands of names in the prospect database.
  • Overwhelmed by the volume of names, Marketing falls back on mostly reactive initiatives for "nurturing" until prospects self-qualify as worthy of Sales' attention. Sales reps do not have the incentive or time to contact prospects, assess their value, and work them as qualified opportunities.
  • When there is Sales contact, it tends to be infrequent, brief, and haphazard, as sales reps move on if they don't find short-term opportunities.
  • And when it comes time to measure success, Marketing points to hundreds and thousands of names delivered at a low cost-per-lead, while sales reps shake their heads wondering why the names they receive are called "leads."
  • The result: Most prospect names end up languishing in what SiriusDecisions calls "lead purgatory," where they lie unattended—until they magically reappear months later as a closed deal for a competitor.

Following are seven sales and marketing best-practices that address these issues and contribute to the successful alignment of the two groups.

1. Agree on the definition of a lead

It sounds so simple, but Sales and Marketing define leads differently based on their respective self-interest. A consensus on what a lead is must spell out required components, such as decision-maker title and role, business pains, buying process, and the sense of urgency—expressed as a buying timeframe.


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Dan McDade is the CEO of PointClear, an Atlanta-based prospect development company that helps B2B sales and marketing executives fill their forecasts with sales-ready buyers.

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  • by Michael Perla Tue Jan 25, 2011 via web

    This is an excellent piece. The advice is spot-on. I've often seen the definition and quantity/quality debates turn ugly - hurting both functions. In high tech - B2B sales - the cost per opp is a often a better metric, as well as looking at lifetime value - if you can get that sophisticated. An advisory group of both sales and marketing folks is invaluable to keep the lines of communication open. Can't stress that enough. Thanks.

  • by Jeff Tue Jan 25, 2011 via web

    This is a great post and very helpful at pointing out where the relationship goes wrong, and ways to make it go right. I look forward to sharing it with my entire sales & marketing team

  • by Hugh Macfarlane Tue Jan 25, 2011 via web

    Good, concrete advice Dan - well done. If MP readers do nothing more they will have advanced well. But consider taking it further - use total cost per sale and include the selling costs. Campaigns which generate sales are what we want, but if Sales has to invest more heavily in closing them for one campaign over another, choose the easy route. Even if Marketing's costs per deal are higher. My full reply to your article is at http://www.mathmarketing.com/blog/create-campaigns-that-are-cheap-to-close-...

  • by Michael Perla Wed Jan 26, 2011 via web

    With regard to Hugh's comments and longer blog piece, which is very good, there are a lot of way to complexify the calcs here ... the cost term sidesteps the type of costs ... direct, indirect, etc. Are they fully loaded costs and are you doing activity based costing - most firms that I've worked with use just straight direct costs. Getting granular cost of sales data per deal is not easy - I have not seen very many companies pull this off - esp. large, global, B2B matrixed orgs that have a lot of hands in the deal - I have seen it with SMBs. It would give a better picture, but hard to do in practice - in my experience. The other part besides win ratios is sales cycle velocity, which would impact the cash flow cycle and cost of sales.

    There is also the question of true yield or return - is there a lifetime value component and/or is it a ratable model where you don't recognize the revenue up-front - may get cash earlier depending on the contract. I think more firms use a simple model - esp. the larger ones - to start with something and then evolve from there. I guess the question is aorund the decisions that flow from the analysis ... are we leaving out material elements that would alter the decision. If so, then "no breath" may be better than "bad breath."

  • by Dan McDade Wed Jan 26, 2011 via web

    Great comments from everyone!. I enjoyed reading Hugh's detailed blog and paraphrase industry guru and friend, The Funnelholic, Craig Rosenberg who said: "Cost per lead is a narrow way to look at the success of a program. A higher cost lead (if justified) will convert better with sales... My suggestion (to marketers) is to pay whatever price it takes to keep them (sales) from hating you." Hugh's example of sales closing eight out of one hundred vs. eight out of one hundred and fifty leads to the question - "what is an effective close rate for complex sale with high dollar product or service"?

  • by Michael Perla Wed Jan 26, 2011 via web

    From Dan's question on close rate ... the typical win ratio heuristic is 33% of the pipe ... as most B2B, complex sales firms want a 3x pipe at a min. Most would like 4 or 5x, but that can be to spur higher pipe value. There are more companies that are measuring their win ratios and can better calibrate the heuristic going forward. As you get more sophisticated, you would want win ratios by product, deal size, lead source, lead score, channel, segment, etc. as they could differ materially - e.g., $10k deal vs. $1m. A strong lead w/ all the signals could be quite a bit higher as well. My 2-cents.

  • by Hugh Macfarlane Wed Jan 26, 2011 via web

    Enjoying the discussion, and agree with Michael and Dan's comments re complexity and "keep them from hating you". Hence the example in my blog used close rates to choose Campaign C rather than Sales cost. We measure this for around 400 companies, and as you can imagine it varies widely. What I would say is that Sales' famous win ratio of 1 in 4 or 1 in 3 (aligns to Michael's 33% and 3x pipe) is a good rule of thumb. Unfortunately though, Sales this rule of thumb operates for deals whch have already been proposed, only. Sales runs on 3x, yet propose-to-close ratio is around 33% (or just as often 25%), whereas 'pipe' usually includes opportunities that are earlier than proposal stage, so their 'pipe cover' needs to be closer to 5x. Further, if Sales and Marketing are working on a single stream then the opportunities might be earlier still, resulting in a need for 6x cover.

    The reality is that they live with the disconnect described above due to the windfall of bluebirds or undeclared opportunities. They work on 3x, close fewer than 33% of their declared opportunities, but enjoy some late-stage wins that were not reported until very late in the piece. In a good market, they balance out; in a tight market (US and Europe presently), Sales can't explain why their ratios aren't holding any more.

  • by Danny Naz - Naz Creative Fri Jan 28, 2011 via web

    When it comes to sales and marketing, i live by two things. Know your market, and identify with your customer. Our best customers are the ones we have personal relationships with. We have things in common, it's not all "business as usual". If you can learn to build a bond with each of your customers, it will go a long way in retaining and building that business.

  • by Tim Redpath Mon Jan 31, 2011 via web

    Thanks for sharing Dan.

    Years ago, I was a new Director of Marketing in a high-tech company and was tasked by my peer in Sales to deliver some leads. Two months later, with a campaign starting to deliver leads, I proudly showed them to the Sales Director, only to be told that everyone in Sales was rather busy right
    now so could I bring them, back in a month or so. With a half-life of days, that was not going to work so I learned my lesson - Sales & Marketing have to work together to achieve success.
    Just a thought.
    Tim

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