I’ve been thinking about my last post – “You have 600 leads? Really?” (see it here) – and a recent LinkedIn discussion- “What constitutes a lead?” – started by Alan Rohrer (see it here). In both cases valuable points were made, but on reflection I think the discussions were too narrowly focused. I thought I’d lay out my view of the entire lead-to-order process to try to clarify how I think it works in most companies, and how I think it could be better.
A caveat – the process I’m describing fits B2B direct sales, which is what I know about – it may not be as accurate for other kinds of sales models.
Let’s start with how it works in most places. In most organizations, a “lead” is captured by Marketing from any number of sources. After some level of qualification or scoring the “lead” is turned over to sales for action. Sales does another level of qualification and either drops the “lead” or decides they have a potential deal – a “prospect” and engages with this “prospect”. At some point sales decides this “prospect” is a real potential and turns it into an “opportunity” and enters a formal sales cycle and process. As the deal moves through the sales cycle, for some deals there will be points where progress toward a deal stops and sales abandons the effort. Other deals move through the cycle until they become either “closed won” or “closed lost.”
I think there are three major changes that need to be made in this process, and they all derive from lack of communication between Marketing and Sales.
First, the initial lead scoring and qualification is often done by Marketing without input from Sales. It’s much more productive to have agreement between Marketing and Sales as to what qualification criteria need to be met before it’s reasonable for Sales to invest resources in follow-up, and also agreement about how Marketing is going to meet those criteria. Sales needs to agree that if Marketing forwards a lead that meet the criteria, Sales will follow it up.
Second, once the lead is turned over to Sales, Sales often abandons leads that they either don’t want to follow up or that they aren’t able to further qualify. This approach can leave potential deals in limbo where nobody has responsibility for them. It’s much better to have agreement between Sales and Marketing about what happens to those abandoned leads. The best process is to return them to Marketing for further nurturing. To make this effective, Marketing needs to understand that nurturing these abandoned leads is a different process than their initial lead gathering and qualifying and build programs that target bringing these leads to a higher level of qualification before they are turned over to Sales a second time.
Third, as Sales moves the leads into prospect and opportunity status, there will be at each stage of the sales cycle some that are abandoned and not moved forward. These still may represent potential future business, so it’s essential to build a mechanism for returning these leads to Marketing for further nurturing. To make this effort effective, Marketing must realize that these leads must be nurtured differently than initial leads or those that were abandoned by Sales earlier in the process. On the other side of the equation, Sales needs to have timeframes that mandate return of these leads to Marketing if specific sales cycle timings for progress from stage to stage in the sales cycle are not met. Leads that don’t end up as “closed won” or “closed lost” should only be completely abandoned when both Sales and Marketing agree there is no reason to invest further in them.
Making these changes helps deal with the classic conflicts between sales and marketing, significantly reduces the chance that good potential customers don’t get abandoned because they are not ready to buy at this time, and generally streamlines the lead to contract process.