B2B sales & marketing optimisation: Deliver fewer, but better, leads to sales

19th Oct 2012

Dan McDade unlocks the secrets of the optimisation process in three steps. In part one, he examined aligning market, lead definition and message. In part two, he explored measurement of the progression of leads through the sales process. In this final article, he details a fully optimised state of prospect development.

In the first article in this three-part series on B2B sales and marketing optimisation, we reviewed how achieving alignment on market definition, lead definition and message is the first step in moving from a chaotic to a fully optimised state of prospect development.

In the last article, we took a closer look at the second key step - measure what matters - and explained the importance of valuing lead quality and lead outcomes over lead volume. The series concludes with this discussion of the third step required to fully optimise sales and marketing, as well as your prospect development process.

In the whitepaper, Why Your Sales Force Needs Fewer Leads, I open with: “Contrary to popular belief, sales reps don’t need more leads. They need fewer leads - or more accurately fewer raw, unfiltered, unqualified leads.”

Sales reps need leads that have been carefully qualified, properly and consistently nurtured and appropriately developed, increasing the likelihood of a completed sale. The problem is that there is so much confusion (and snake oil) in the marketplace today that:

  1. Marketing is paid, in fact rewarded for, lead quantity and not quality.
  1. Technology solutions push more, poor quality, leads to sales faster and more efficiently than ever.
  1. Over one-third of sales reps miss quota.

Here is a report from marketing: “We’re on track for a great quarter in lead generation. This month we generated 1278 leads from all sources - that’s a 30% gain over last year! And in spite of higher PPC costs, we continue to keep our leads under $100.”

When sales executives receive these so-called leads from marketing, here is how they respond:

  • Not a senior enough executive? Out!
  • Budget undefined? Goodbye.
  • Next-year decision? No way.

Here is what marketing should be reporting: “This month, marketing added 14 new prospects to our Optimised Prospect Development program. A total of 41 sales opportunities are currently under development by marketing. Last month, sales received 10 fully nurtured sales opportunities representing $3.5 million in potential revenue, i.e. projected sales revenue. Attached are the details.”

SiriusDecisions characterises the mess this way: “It’s a bizarre, often co-dependent relationship; working at arm’s length, sales has the latitude to dismiss the leads marketing creates as not qualified or nurtured enough, while marketing can claim that they are holding up their end of the bargain when you consider things purely from a volume standpoint.”

Here’s a real-life example: We once provided services to a large software company and I got a call from our day-to-day contact one morning about our lead cost - he said we were too expensive. I asked him how much our leads cost and he said $650. I asked him how much the other vendor’s leads cost and he said $350. I asked him what percentage of leads delivered by PointClear were considered high quality and he said 100%. I asked him what percentage of the other company’s leads were high quality and he said about 50%. Then he said, “I know where you are going with this, but can’t you just find some way to reduce the cost per lead - $350 is all we can spend.”

Following that conversation I telephoned 10 of that software company’s largest partners and asked them about lead quality from the other vendor. They said the quality sucked. I asked them why they didn’t do something about it and they said because they were afraid that the big software company would stop sending them leads. That conversation was about eight years ago and we still do business with the big software company (when they are looking for high quality leads). However, most of their spend is going through the equivalent of “sweat shops” and they literally waste millions on low quality, poorly qualified, so-called leads that are never followed up. They have even come up with a way of justifying the spend. They calculate how much the average deal is, assume a 20% close rate and calculate ROMI (return on marketing investment) based on these estimates. Forget that the actual return is in fact almost zero.

What is missing in most companies, from an execution standpoint, is the following:

  1. A process to measure the quality and cost per REAL lead.
  1. A judicial branch (that is, the c-level executive) that provides the checks and balances needed to keep the other branches (sales and marketing) honest by evaluating opportunities that are not worked by sales to see if there is a quality or an effectiveness problem.
  1. A group to nurture leads until they are sales-ready; and to take opportunities back if sales cannot gain traction for one reason or another. Right now these opportunities are disappearing into a black hole.

On your way to Point C

When I share the Optimised Prospect Development matrix with senior executives they almost always place themselves in “Chaos” from an effectiveness standpoint. Moving from Chaos to Kickass begins with an objective evaluation of how your company compares to those that are Optimised. Understanding how your lead generation process functions today will reveal areas that need improvement so you can advance from Point A (chaotic) to Point C (optimised) and drive sales revenue off the charts!


Dan McDade is president & CEO at PointClear. For more information on the topics discussed in this series, download the white paper, Point C: From Chaos to Kickass – 3 Steps to Sales and Marketing Optimization.

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