This is the final article on our blog series related to marketing automation obstacles. The last obstacle has to do with challenges inside an organization. Unfortunately, dealing with corporate politics is something we all have to go through. Politics are not as “thick” with small companies vs. large companies; however, it still persists to a certain degree. When it comes to having a hyper-efficient sales and marketing process, one political barrier that must be removed is communication between head of sales and head of marketing. It’s important to remove politics for marketing automation success.
Sales and marketing alignment is a vital component of a successful business. Although creating alignment is priority number one, maintaining alignment is equally important. Sales must work with marketing on demand creation activities to help create, qualify and nurture leads. After all, sales is good at selling, but they can’t sell if they have no one to sell too. That’s where marketing steps in. Marketing creates leads and sales closes them. Marketing must be equipped with the right marketing content, lead management technology and lead nurturing solutions to meet the demands of any sales organization. At Lead Liaison, we take sales and marketing alignment seriously; so serious that we’ve created a contract between our sales and marketing teams. The contract, or Service Level Agreement (SLA), gets our teams on common ground – providing them with a framework for common definitions, metrics and responsibilities. Let us know if you’d like a copy of it. As mentioned above, alignment is the first step and maintaining alignment is the second step. Make sure you have periodic meetings to review progress against your desired goals. Also, have a set of common/shared goals that benefit both teams and leverage the core competencies of each respectively. Matt Smith, Executive VP and Co-Founder of 3forward, noted there are four shared metrics for sales and marketing to follow to align their efforts.
1. Mutually define a sales-ready lead 2. Decide how many sales-ready leads must be created each month 3. Set a shared target % for how many sales-ready leads convert to qualified pipeline opportunities 4. Agree on the target % for how many qualified opportunities become new wins
What are the political barriers you face between your sales and marketing teams? How have you been able to remove politics for marketing automation success?
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We posted a few articles over the past week on lead scoring, prioritizing leads and lead scoring criteria. Today, we’ll put this information to use and explain 5 simple steps to building a lead scoring model.
1. Hold an alignment meeting between sales and marketing
2. Categorize lead scoring events into 3 buckets
3. Define a lead scoring threshold
4. Assign a weight to lead scores
5. Assign a point value and test
Building a lead scoring model in 5 steps
Step 1: Meet
First, begin building a lead scoring model by getting key sales and marketing folks into a meeting. As much as marketing may desire complete ownership of the lead scoring model, it’s vital to involve sales. As Mac McConnell points out:
“Sales is the client of a lead scoring model.” Mac McConnell, bluebirdstrat.com
By bringing sales into the process early on you’ll garner their buy-in. Mac further explains, once they buy-in, they’ll know the meaning behind a lead score and how marketing qualified the lead. More importantly, they know what a truly “qualified” lead is and can offer valuable input on Step 2.
Step 2: Categorize
As discussed in our article on lead scoring criteria, use 3 buckets when building a lead scoring model – demographics, behavior and qualification. Write down relevant criteria that contributes to your company’s definition of a “lead” within each category. For example, under demographics you might list vice president of engineering as an important title to assign a lead score to if your company recognizes this role as a key persona in the B2B buying process.
Step 3: Define
Select a lead scoring threshold. The lead scoring threshold is somewhat arbitrary; however, it’s important as it objectively defines when the lead is ready to be handed to sales, or becomes a marketing qualified lead (MQL). For example, pick 75, 100 or 1000. The actual number is immaterial. Use a scale that is easy to remember and to track while building a lead scoring model. See our write-up on sales pipeline stages for further clarity on MQL and other phases of the funnel.
Step 4: Weight
Use stars or symbols to assign a weight to each lead scoring criteria instead of using point values. Using symbols is important at this stage for sales and marketing to avoid contention. It’s easier to agree on assigning 4 stars or 5 stars to something rather than assign arbitrary numeric values. In Mac’s video below he doesn’t use a precise way to derive the lead score from the weight, we’ll address this in Step 5.
Step 5: Score (and Test)
Assign points to your weights and test your model. We suggest using a consistent method when assigning scores. For example, if the lead scoring threshold were 70 it makes sense to say each star is worth 10 points. If the total lead score meets or exceeds 70 points (7 stars) the lead is ready for sales (a MQL). After building a lead scoring model, test your model by running through a handful of theoretical scenarios. Take recent leads and/or opportunities and apply them to your lead scoring model. How did the score turn out? If your model were live would the lead score be realistic and accurate? Would sales agree to this lead scoring model? Remember, building a lead scoring model is not a “set it and forget it” kind of thing. Review your lead scoring model frequently (every 3 months at a minimum) and tune it as needed.
Finally, input your lead scoring rules into revenue generation software, such as that from Lead Liaison. For a free consultation on building a lead scoring model using Lead Liaison’s software contact us.
For more information watch Mac McConnell’s presentation below on building a lead scoring model.
We welcome your feedback, comments and suggestions. How are you building a lead scoring model?
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Marketers spend a lot of time on inbound marketing activities to drive traffic to their site; investing in SEO, thought leadership, trade shows, blogs, social media, and advertising are a few examples of inbound marketing. As awareness builds and new contacts enter the sales funnel it is important businesses define the right sales pipeline stages to manage, nurture, and distribute leads. Sales pipeline stages tend to vary across companies; however, we’ve established 6 sales pipeline stages appropriate for most businesses. Here at Lead Liaison, we use these exact stages to manage our business. Let’s explore how we’ve defined the 6 stages in the sales pipeline.
The 6 sales pipeline stages are
1. Just a Name
2. Engaged
3. Prospect
4. Marketing Qualified Lead
5. Sales Qualified Lead
6. Opportunity
Prior to adding a lead to your sales pipeline we suggest tracking the lead source. Marketing automation technology can help you identify whether the lead source is from a paid search, SEO, trade show, facebook, general website visit or other source. Lead tracking will help you report on marketing ROI down the road. Let’s briefly explain each of the sales pipeline stages.
Just a Name
As the name implies, these records are just a name. If you have the person’s name or email and no other insight they are simply a record, or a person, in your database. Often times marketing and sales have conflicting definitions of a lead. Separating these people from your marketing defined leads and sales defined leads helps avoid confusion over what is a lead and what is not a lead.
Engaged
When a person finally responds to an inbound marketing program they are moved to the sales pipeline stage, Engaged. For example, the person could click a link in an email campaign or fill out a web form to become engaged. Please note that just because someone is in the engaged status does not mean they are a lead as there’s a good chance they’re not yet ready to speak with sales. We suggest using marketing automation technology to automatically respond to the person with a personalized message a few hours after they respond.
Prospect
If the person meets the ideal profile of a buyer they become a prospect. Ideal profiles could be determined by demographics (location, job title) or firmographics (industry, company size, revenue). Again, we suggest using a marketing automation system to help qualify if someone should become a prospect. Lead scoring, a feature of most marketing automation systems, provides a mechanism to automatically qualify leads using an incremental scoring system. For example, add 10 points if their companies revenue is more than $50M and/or add 20 points if they are a Vice President. Conversely, scores can be decremented. For example, subtract 50 points if the person is a student.
Once the person becomes a prospect start lead nurturing. Lead nurturing is the process of creating meaningful dialogue with the prospect at each stage of the buying process. See the post under lead nurturing programs for 5 examples of this dialogue. The beauty of lead nurturing is that different lead nurturing “tracks” can kick in according to the prospects online activity and/or interaction with other marketing assets.
Marketing Qualified Lead (MQL)
We suggest using the score generated from your lead scoring programs to determine if a prospect makes it to the sales pipeline stage as a marketing qualified lead. Sales pipeline stages leading up to this point do not require human interaction; interaction has been personalized using lead nurturing technology. In our lead management model, we use a scoring threshold of 65 or higher. When the prospects lead score crosses that threshold we change the lead status to a marketing qualified lead.
At this stage in the sales pipeline, marketing will pass the lead over to sales. In some businesses marketing may have a sales development team or inside sales team manually qualify the lead further via a phone call or some other type of screening. At Lead Liaison, we do not change the status of the lead until sales accepts the lead and determines it’s qualified. A lead may also be put into the “Disqualified” status if there’s no match whatsoever.
Sales Qualified Lead (SQL)
Once sales accepts a lead and deems it qualified the lead becomes a sales qualified lead. Leads at this stage typically require high-touch, personalized interaction. Sales will call the lead to further qualify them. At this point, sales can move the lead to one of three statuses: Deferred, Recycled, or Opportunity. If the lead is not quite ready to buy sales should recycle the lead. Recycling puts the lead back into a lead nurturing program managed by marketing until the lead is sales-ready. Alternatively, sales can move the lead to a Deferred status if no additional lead nurturing is warranted and there doesn’t appear to be an opportunity. If marketing, and the marketing automation system, has done its job the lead should be moved to the Opportunity status. When the lead becomes an opportunity it will have its own opportunity sales cycle.
This is the most important stage of all sales pipeline stages since quick response to hot leads must occur. We strongly recommend using an alert system to make sure marketing and the rest of the organization holds sales accountable for follow up. A marketing automation system will help you setup a closed-loop accountability process similar to the one below:
1. Send an alert via email to the responsible sales person.
2. If within 24 hours the lead status has not been changed send an alert reminder to the sales person.
3. If another 24 hours pass, send another alert reminder to sales and copy the sales person’s manager.
4. If another 24 hours pass, send the same alert to sales and the sales persons manager but this time copy a C-level executive.
This closed-loop process ensures no lead falls through the cracks while holding sales accountable for follow up and providing marketing peace of mind as the person seamlessly transitions from marketing responsibility to sales responsibility.
Opportunity
The Opportunity status is important for marketing to measure cost per conversion, cost per lead, and effectiveness of various lead sources. Today’s marketer is being measured on results, not activity (email opens, web visits). ROI analysis on a person’s path through the sales pipeline stages from Just a Name through to Opportunity then Customer is vital to keep a pulse on revenue generation.
Graveyard and Contact
At any of the sales pipeline stages a person can be moved to the Graveyard or Contact status. Graveyard status is a person record with a bad email or incorrect contact information. Usually, this occurs if the person has changed jobs. Contact status is when a person is converted out of the sales pipeline stages into a contact management database and is not a lead. This typically occurs when the person is a partner, reseller, or just a contact in your system that you never plan to sell to.
Contact Lead Liaison to see how our revenue generation software can help you setup your lead management process to distribute, qualify, and nurture leads through your sales pipeline stages.
We welcome your feedback, comments and suggestions. What sales pipeline stages to you employ? How do you manage your stages?
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Facts support a widening gap between sales and marketing teams. Read our article on sales and marketing alignment to see what we mean. Businesses must focus sales and marketing teams on common criteria; in particular, revenue generation. The first step in brokering alignment of sales and marketing teams is to establish an agreement, a set of rules, defining how sales and marketing will interact with each other. Many businesses are creating a Service Level Agreement (SLA) between sales and marketing to serve this purpose.
“Sales and Marketing must collaborate on defining leads and marketing objectives. You can make a huge impact by focusing first, on creating an Ideal Customer Profile (company-wide, for each product, service or solution). Then, create the Universal Lead Definition of a ‘sales-ready lead.’ Finally, connect the marketing/sales process to customer’s buying process.” Read more here. – Brian Carroll” company, http://blog.startwithalead.com
What should a Service Level Agreement contain?
As Brian Carroll highlights, companies should agree to definitions of leads, ideal customers, and adapt to customer’s new buying habits. These are just a few examples of items that should be included in a Service Level Agreement. In addition, businesses should include:
Purpose of the Agreement
General definitions
Lead scoring model
Lead response process and timeline
Lead nurturing program
Metrics / goals
Sales and marketing responsibilities
Review period
Term
Acceptance
Complementary Service Level Agreement for sales and marketing
Lead Liaison’s revenue generation software provides the technology to deliver many of the components of a Service Level Agreement; however, it’s a best practice to first develop a guideline for your lead management in the form of an Agreement. We understand every business is different. Small business, large businesses, different products, different markets, etc; but, we can agree most businesses are similar in a few regards. They lack efficient lead management processes and have misaligned sales and marketing teams. As a result, the “framework” of any Service Level Agreement is similar.
We took an opportunity to create a Service Level Agreement template to get you started. We will be posting the template shortly. The template will be accessible via this post. Please check back shortly.
We welcome your feedback, comments and suggestions. What else should be included in a Service Level Agreement between sales and marketing?
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The CMO Council sited 38% of Chief Marketing Officers (CMOs) say sales and marketing alignment and integration is a top priority. However, only 30% have a clear process or program to do something about it. With only 38% of CMOs making alignment a top priority, we can assume approximately 1 out of every 3 organizations recognize the issue but few take action. How about the other 2 out of 3? Are they not aware of the problems between sales and marketing? This article highlights common problems prohibiting sales and marketing collaboration, summarizes reasons one group thinks the other is the antagonist, and suggests solutions to narrow the divide between sales and marketing.
Unfortunately, inadequate solutions and uninformed executives have only perpetuated the problem. Sales and marketers have developed a terrible misconception of one another culminating in an environment filled with friction and dissonance. Brian Carroll, CEO of InTouch, attests that “communication breakdown affects nine out of ten companies”. Here’s another one of our favorite quotes from Brian:
“The unrealized potential [of sales and marketing alignment] can be likened to the batteries in a flashlight. If the batteries aren’t inserted in the right direction, or are otherwise out of proper contact, their power is unusable”. – Brian Carroll, http://blog.startwithalead.com
Do any of these examples typify your sales and marketing groups?
marketing complains sales never follows up on their leads
sales complains marketing never provides any leads, just contacts
marketing thinks they are the only people who are strategic thinkers
sales thinks they’re the only people worried about the quarter
sales wonders why they always have to generate all their own leads
marketing complains sales criticizes or ignores everything they generate
marketing thinks salespeople will say anything to get a deal
marketing wonders why sales isn’t cranking out deals from all their leads
Problems with sales and marketing alignment
C-level executives must recognize problems standing in the way of sales and marketing alignment. We took an opportunity to pull together five major problems impeding sales and marketing collaboration. Each problem is backed by data from industry experts.
80% of leads are typically lost, ignored or discarded (*1)
73% of companies have no process for revisiting leads (*2)
80% of marketers send unqualified leads on to sales (*3)
90% of marketing deliverables are not used by sales (*4)
90% of website visitors don’t identify themselves (*5)
30% of sales reps turnover each year, 7 months to ramp up (*6)
Solutions to sales and marketing alignment
There’s no single recipe for aligning sales and marketing; however, the first step is recognizing they’re not aligned (you already have a 38% chance). Here are some suggestions to align sales and marketing teams which will address the five major problems identified above.
1. Transform your sales cycle into an integrated revenue cycle. Create a new model (definition) for your sales pipeline to include sales, marketing, services and support. We discussed how businesses can split their sales pipeline into a marketing and sales pipeline respectively in this article. Once the sale is made, even more collaboration should occur between sales and marketing while pulling in support and services. We discuss extending your pipeline past the point of “customer” in this article. Working on a revenue cycle vs. a sales cycle allows sales and marketing teams to work together on a common goal; creating revenue, faster.
2. Define a Service Level Agreement (SLA) between marketing and sales. Include things like definitions/terminology, what makes a qualified lead, priority of lead sources, how leads are “recycled” into nurturing programs, where marketing collateral is stored and details of nurturing programs in your SLA.
3. Establish a closed loop reporting process for leads. Once marketing provides a lead to sales it’s crucial follow up is measured and tracked. Marketing automation uses lead distribution technology to disseminate leads based on pre-defined criteria. Automatic lead distribution reduces turnaround time and make sales happier when marketing responds quickly. Additionally, marketing automation technology can automatically schedule follow up actions. For example, scheduling tasks such as a phone call or email in a CRM system such as Salesforce.com. Advanced marketing automation schemes include the ability to ensure tasks are changed or closed; if not, the system will send an email to the marketer or management notifying them of the delay.
4. Foster a culture of respect and trust. To overcome common misconceptions, as highlighted above, foster an environment of collaboration, open communication, and mutual interest to develop respect and trust between marketing and sales.
5. Implement lead scoring. Lead scoring measures a lead’s interaction with marketing activities. It’s an automatic way for marketing to qualify leads for sales. When a lead is qualified by hitting or exceeding a certain scoring threshold, marketing can hand the lead off to sales. The hand-off occurs automatically and unobtrusively. Check out our lead scoring solutions guide for more information.
6. Implement lead tracking. For the 90%+ website visitors who don’t fill out a form, lead tracking captures the visitor’s information as well as their click pattern (digital behavior) as they traverse your site. This is invaluable information for sales. It helps sales better understand what their prospect is interested in. When sales communicates with the prospect they’ll know what they’re looking for resulting in a more efficient discussion. If lead tracking is not implemented sales loses out on more leads and marketing doesn’t get the proper return on their marketing investments.
7. Implement closed-loop email marketing. Typically, marketing will collect a bunch of leads from a trade show, send out an email blast, then hope for someone to call back. With closed-loop email marketing, any response to an email message is automatically signaled to sales or scored appropriately. The marketing system will “raise its hand” when prospects are interested. Closed-loop email marketing is built into most marketing automation solutions.
8. Implement lead nurturing. Don’t let 90% of your marketing collateral (major marketing investments) go to waste. Lead nurturing leverages closed-loop email marketing and enables marketers to setup customized nurturing schedules of 1, 3, 6, 9, 12, or any number of months to automate and personalize the process of staying in touch with your leads. With marketing collateral in hand, a nurturing program, and closed-loop email marketing you can automate periodic follow up. The nurturing system will automatically send email messages with attached collateral matching your prospects interest. Nurturing matures the prospects interest until they’re ready to buy. Lead nurturing also makes sure that the 80% of ignored leads are not ignored since marketers can drop them into a lead nurturing cycle right away. For the 73% of marketers that don’t plan to revisit/re-qualify leads, work with sales to establish a process wherein leads are “recycled” or added back into the nurturing program if the purchase period is farther out than the sales person is ready for.
9. Overlap payment metrics between sales and marketing. Sales people make most of their money off of bookings or revenue. Measure part of marketing’s success on similar sales metrics.
10. Bring in revenue generation software. Get your organization on a common tool set that provides lead generation, marketing automation and sales prospecting capabilities tied into your CRM system. Using a platform solution, not a single product, provides cost savings across the org while uniting your teams.
What happens when sales and marketing are aligned?
As evidenced by the data below, once sales and marketing are aligned the business will recognize considerable monetary as well as cultural gains. Your organization will begin to think as a team, as a single unit, instead of operating in individual silos with disparate agendas. Industry experts report the following benefits of aligning sales and marketing:
Businesses have a better chance of retaining customers
We welcome your feedback, comments and suggestions. What do you feel the problems are between sales and marketing? What solutions do you have to achieve sales and marketing alignment?
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(*4, *6) “The New Rules of Sales Enablement” by Jeff Ernst.
(*5) Marketing Sherpa.
(*7) Hugh Macfarlane, founder and CEO of MathMarketing, conducted an alignment benchmarking study by surveying 1,400 professionals in 84 countries around the world.
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