According to an old expression, even a man lost in the woods knows where he wants to go. You may not be lost in the woods, but you know you must fix the problems between Marketing and Sales that are undermining their battle for success.
What's preventing your success? Let's review what doesn't work in lead management and why. Here are four critical areas that deserve attention and corrective action.
1. Measuring Success Based on Cost-per-Lead Kills Companies
One of the biggest problems with the management of sales leads today is that more and more companies are basing lead-generation buying decisions entirely on cost-per-lead.
Salespeople complain about the quality of leads produced, and they likely ignore most of the leads they get anyway. Without feedback from Sales on lead quality, forecast status, and close rates, management defaults to measuring Marketing by quantity rather than quality.
Let's assume, however, that you work at a company that has been forced to evaluate and reward Marketing on the basis of cost-per-lead, and that the company mandates that cost-per-lead must be $350. You can achieve that by doing the following:
- Reduce the base salary of the employee producing the leads
- Increase the number of leads required per person, per week
- Increase the number of touches per day
- Decrease the number of touches per contact
- Decrease the number of line-of-business contacts per company
Many executives would agree, based on productivity metrics and best-practice requirements, that those are unlikely options. Is it possible to create high-quality leads to support a field sales force selling a $100k+ solution for $350 per lead? Frankly, no.
Over the past 20 years, the average cost-per-lead for a relatively complex sale (e.g., hospital revenue management solution, ERP, and BPO consulting) has ranged from $750 to $1,500—and those programs' ROI was excellent.
So, how much should a lead cost? A lead should cost more than you think, but probably a lot less than you are paying, especially when process inefficiencies and opportunities lost to the competition are taken into account. The reality is that leads cost what they cost.
2. The Fallacy of Appointment Setting
One tactic that some organizations have used to get lead traction is appointment setting. However, "appointment" is a misnomer in this case. Firms that practice appointment setting are really scheduling "appearances" and creating the illusion that those appearances are with qualified prospects.
The companies typically sell complex, relatively expensive B2B solutions that require the involvement of multiple decision-makers and multiple levels of evaluation. Considering those requirements, could an appearance with one person and without advanced discovery be the best first step with a new prospect? The answer is no; an appearance would not be an effective use of resources at that stage in the process.
The reason? The sales force treats very expensive appointments just like it treats any other lead source. Salespeople follow up with the first few appointments they receive from any new source, gain little or no activity from the few calls they place, and then stop calling on any new "appointments" and stop making "appearances."
If you are deploying your sales force by appearance only, you'd better look closely at what is going on and what is closing, before the money runs out.
3. The Downside of Market Blueprinting
Low-level blueprinting is another popular so-called solution that reflects Sales's lack of regard for marketing leads. Reps will say, "Just get me the names of the executives at target companies, and I will get in to see them. I just need some names."
Here's how low-level blueprinting works (and I use that term loosely). Low-level blueprinting companies provide specific contact names to the sales force, and Sales follows up. As long as Sales has a name to cold-call, it can get the rest of the job done, right? Wrong! It just does not work.
Blueprinting does work if the objective is to scour the market for key contacts, collect email addresses and other contact information, and use that information for multi-touch, multi-media, and multi-cycle contact programs.
4. Telemarketing Cannot Stand Alone
The phone is one of the strongest tools in your business-prospecting arsenal, but it should not be used as a stand-alone medium. One-call cold-calling is part of what caused Sales to give up on leads generated by Marketing in the first place.
To create valuable leads, you need a high-caliber staff trained in sophisticated selling methodologies and knowledgeable about mixing multiple media (phone calls, direct mail, email, personalized Web pages, and other electronic media) to deliver your message effectively.
Smart, integrated marketing does work. Multi-touch, multi-media, and multi-cycle campaigns will multiply your marketing results.
Reviewing your current lead-management processes and taking corrective action in the four areas noted in this article will increase your marketing and sales productivity by driving more closed deals and increasing revenue.
(Image courtesy of Bigstock, Fortune Cookie.)
