Hey B2B Marketers; Sales Doesn’t Care About Conversion Rates

By on May 14

I was recently at a lunch forum with over 20 sales and marketing executives from a variety of industries and the topic of connecting marketing and sales came up. So did the interest level.

The lunch event was over-capacity and included a great cross section of Fortune 1000 and emerging high growth companies across a variety of industries including Technology, Tele-communications, Financial Services, Business Services, etc.

The conference attracts a real mix of executives who lead marketing or sales teams. This particular topic attracted more marketers with a small handful of sales execs distributed through the room. The discussion opened with each executive commenting on how “connected” marketing and sales were in their organizations.

The overarching themes of that discussion included the following:

  1. Most of the marketers who attended shared that their CEOs continue to push them to get to answers and show ROI around how to connect the organizations more effectively.
  2. The general consensus was that while significant investments have been made in technologies which promise better connectivity for sales and marketing, no company in the room felt confident that they had it right. Most felt that they lacked the people, process, and strategic alignment they needed to truly connect the two functions.
  3. Most executives were confident that they were filling the top of the funnel. Getting potential customers to put their hands up and show initial interest was something that everyone felt they did well.
  4. The real challenge seemed to center around how (and who) nurtures top of funnel opportunity through the funnel and to a place where the target was ready to buy.
  5. There was wide variance in how each firm defined a sales ready lead.
    • Many were pushing leads direct from the website form immediately to a sales rep.
    • Others were doing manual nurturing with call centers and demand gen hubs prior to sharing leads with sales.
    • A few were using digital nurturing tactics, content marketing, scoring models, and analytics to understand which leads were more likely to buy (and thus more ready for sales to engage). A lot of notes were being taken during this parts of the discussion by most leaders in the room. Everyone saw this as a best practice but few were doing it today.

After we made it around the room and each executive had shared their perspective, one of the marketers posed a question to the group.

“How do each of you ensure that sales follows up with your leads and drives conversion rate?”

Immediately a flurry of conversations began.

Spiffs and incentives are the answer – it seemed that everyone believes that sales is coin operated.

“If they don’t follow up, we shouldn’t pay them” one marketer shouted, inciting uncomfortable laughter across most of the group.

While this took place, one of the few sales executives in the room sat patiently in the corner, finishing his main course. When the discussion died down, he put down his fork and said…

“Sales doesn’t care about conversion rates. Sales cares about achieving their quota.”

It was a simple but profound statement highlighting one of the key challenges for organizations who are trying to connect marketing with sales.

Most organizations lack clarity on the KPIs for sales and marketing which will align their efforts. If marketing is rewarded for lead volume and conversion rates while sales is rewarded for total revenue delivered, there may be misalignment. Sales will focus on deals which will more quickly retire quota, which may not be the same type of opportunity where marketing is best able to drive lead volume.

We have identified many root causes for the challenge organizations face as they work to connect marketing and sales in the new buying environment. These include challenges associated with technology, internal capability, processes, infrastructure, and a host of other issues which must be addressed as well.

However, the first step is to look at your strategy and ask the question “do we have strategic alignment between sales and marketing on how we need to work together”?

The initial operational step is focusing on ensuring that sales and marketing start speaking the same language. This centers around “the handoff” where leads are passed to sales from marketing. Both marketing and sales need to agree to the definition of a marketing qualified lead (MQL) and trust that the other side will honor their commitment to the handoff process.  For marketers, they need to deliver consistent quality.  For sales, they need to follow up consistently.  Then both teams need to talk about revenue conversion rates.

Very few organizations have taken the time and spent the calories on building alignment across their sales and marketing teams. Those who get it right see outsized returns. How is your organization doing? You can get a sense by trying this ROI Calculator.

Comments

  • Grant Grigorian

    May 16, 2014

    As a practical suggestion, I find that in addition to tracking the conversion rate, the marketing managers have to also keep an eye on the completeness of the hand off. For example, if marketing generates 100 MQLs, and sales converts 10, the additional question to ask is what happened to the other 90? Have they all been removed from MQL (either by re-directing back to Nurture or being Disqualified out right)? The worst thing that can happen here is nothing at all. In other words, how many of those MQLs continue to just sit in your system as MQLs for an extended period of time? That's where defining SLAs come in: Sales must follow up with all MQLs within 2 weeks, as an example. So what if after 2 weeks, there are still 50 MQLs - or 50% of total created, from our example, in the system - that seemingly no one touched? That's a very acute symptom of a misalignment between sales and marketing: * Either those are leads that are not demographically correctly qualified (sales disqualified by looking) * You don't have enough sales people to manage an influx of 100 MQLs * Etc. At the very least, marketing and sales need to sit down and review the 50 leads that didn't meet the SLA and either re-define the SLA, or redefine the definition of MQL.

    • Jason Robinson

      May 16, 2014

      Thank you for your comments Grant. Very insightful and always appreciated. The SLAs which marketing and sales set with one another are a critical step in getting better alignment and driving improved outcomes for opportunities created and passed. However, the reality for many leads (the 90% you reference) is that they are not yet ready to buy and/or not ready to engage with sales. The "recycling" of these leads into automated nurture programs or other campaigns is critical to unlocking the value trapped in the middle of the funnel (and to getting real ROI on the investments made at the top of the funnel to identify the leads in the first place). We see dramatic improvement in conversion rates (and ultimate sales quota retired) by realizing more value out of the 90%+ of leads which are not yet ready to buy. Thanks again for your insights.

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