CEOs don’t care about leads. They care about revenue. Consequently, the relationship between marketing and sales is often nothing short of mayhem.
A couple of weeks ago we published part one of our five-part series entitled: “Five Reasons CEOs should Care about Leads (and databases, content, social media, cost per lead and marketing ROI) and How to Fix What is Broken.” First up was data. Today we’ll discuss:
Reason #2: Measurement – Metrics that Matter
Sales reps in average companies close about one out of every five leads they qualify. Note that, on average, sales reps only qualify about one third of the leads they are provided—so close rates measured against delivered leads are often less than 10% (again, in average companies).
Sales reps in best-in-class companies close nearly one third of the leads they qualify. They also qualify half of the leads they are provided. Subsequently, close rates for optimized companies are 150% of what they are in average companies.
Here’s why average companies under-perform:
In many marketing departments leads are assigned a score based on a prospect’s interaction with inbound marketing efforts. The more content consumed, the higher the score, and the faster the so-called lead gets sent to sales. Then—inevitably, the lead falls into a black hole. Unqualified leads that have not been nurtured to the point where they are ready for sales attention are simply lost in the funnel. To fix this, it is important to measure the percentage of leads that sales qualifies. If the range of “acceptable” qualification rate is 33 – 50%, then anything below that range requires inspection. Either the lead scoring (or other lead generation methods) results in unqualified leads being sent to sales, or the sales reps are ineffective at following up on leads. What you’ll likely find is that both things are happening.
The optimal way to ensure that quality leads are being produced and effectively followed up on by sales is to insert a “judicial branch” between marketing and sales. If a lead is either proactively or passively ignored by sales, then the reason should be determined for each lead (either it was not really qualified, or it was qualified and ineffectively followed up). While tedious, it is the only way to fix a major problem occurring in so many companies.
Read the third reason CEOs should care about leads: “Calibrating Results.”