ViewPoint | The Truth About Lead Generation

Without question marketing has to know the numbers and quota placed upon the sales organization. More importantly, one group and in a perfect world, both marketing and sales working together has to examine the marketplace and see what the potential is, the cost to acquire, and budget accordingly.  
 
 
 
Far too often I see marketing and sales at odds with one another. It is the age old argument of who is letting whom down. The funny thing is that often, neither group has looked to the marketplace to understand size, opportunity, cost to produce a lead, closing percentages, ROI, attrition and all of the pieces and parts that make a campaign successful or a dismal failure. 
 
 
 
In summary, you bet! We know the quota of sales because marketing works hand in hand with them to see what the marketplace will give up, the budget needed to aggressively position messaging to drive opportunity and the cost to close them as they arrive.  
 
 
 
Great post and question, 
 
 
 
Ken 
 

Great point, Jim. It's great advice not only for the sales and marketing team, but for CEOs. If you and your team don't have a target firmly in sight, how can you possibly hit the bull's eye?

And speaking of hitting the bull's eye... recent stats from our ebook "Sales Speaks" show that only 31% of all leads generated fit the sweet spot for most organizations. Yikes!  
 
So, even if you know the quota and do the math backwards (great job with that in this post btw) you still need to focus on where your high probability buyers live.

James, great article. This seems so obvious yet we all know that many marketers operate without quota information, which is often framed in a revenue number. What's also just as important is for marketing and sales to have clarity around how many customer deals this number represents, whether these are net new deals or new deals from existing customers, which segments are most likely to yield these net new customers. In this way, marketing can truly contribute and help build the pipeline with qualified opportunities.

James, as someone who deals with the sales side of the equation, it is often frustrating that sales people and managers don't always know their conversion rates from lead to engaged prospect, prospects to proposal, and some can't tell you their proposal to close rate. 
 
 
 
What's funny is that in creating the type of communication and interaction your article highlights, many of these conversion rates can be proactively improved, leading to further upside in ROI. 
 

Jim - I realized after reading this that you're right on with the 25% who know the numbers. When I talk to prospects about designing marketing communications/pr plans, about 25% (often less)can provide this information so I can extrapolate and tie in PR strategies and lead generation. When they can, the job is always much easier and more satisfying for everyone involved! The challenge continues.

Great post James. It is surprising how many don't know the quotas. We often talk about how Marketing does not do an adequate job communicating with Sales. I believe this is one of those instances where Sales does not do an adequate job of communicating to Marketing. It has also been my experience that Sales undergoes restructuring and re-staffing very frequently, but the Marketing impact is seldom taken into consideration. 
 
Re-structuring: Let your marketing team know at least 1 quarter in advance of any sales restructuring - for instance if you are shifting from a Geographic to a Vertical alignment or adding new territory it will reduce ramp time for the reps. 
 
Transparency: Marketers do care what your sales challenges are. We do want to know where the company expects to get its revenue. We do want to align our programs with the sales strategy. But we need to see that our efforts are leading to real opportunities or not. Include marketing managers in Sales pipeline meetings - at least once in a while. 
 
Content: It's a challenge to create content for multiple verticals or product lines. Sales and Marketing need to work together to prioritize. 
 
Data: Most marketers struggle with segmenting their databases in alignment with sales territories. Simply hiring a rep to handle a territory or vertical does not mean marketing has the ability to properly target that segment. This takes both time and money - which may be allocated elsewhere. 
 
Events: Events are planned and booked 6 months or more in advance. Sales and Marketing should look at the schedule and address any mis-alignment. 
 
If Sales can communicate where they are focused, Marketing can plan... ahead of changes. Then it's up to Marketing to segment the database and build the programs to fill the funnels of the various sales teams. 

A direct hit Jim. Funny thing is I've consulted with companies where the word 'team' is an oxymoron. Marketing knows what it's objectives are but doesn't want to discuss with sales. Sales stays in its silo and protects its turf. Come on guys, can't we all just be friends and work together

Jim: 
This is a very valuable piece that marketers should print out and hang on a prominent place on their wall (or embed into their iPhone). As you point out, marketers not knowing quotas is a form on insanity on the part of companies who don't require their marketing managers to know the numbers. Fortunately, your piece provides b2b companies with a template and some solid tips on how to bring the marketing folks onto the numbers side and how they can, with some stick-to-itiveness and support from the C-level, help to drive quality leads and create new revenue streams. 

How? Because marketing has NEVER been held accountable. Ever. Marketing has survived on advertising concepts and this mystical "process" called "branding." You know, that established practice that NOBODY can define. And that produces results based 95% on faith.  
 
Bottom line: CEOs accept this nonsense as par. Because they always have. 
 
Enter, digital. What has the CMO's response been? More of the same: advertising. Somehow marketers don't see it as an opportunity -- that's right, Jim. Why? Because they don't have to. They just need to use words like "engagement", "buzz" and "conversation" and "social graph" to prove their worth. Because most CEOs accept this behavior. In fact, they rush out to read some Malcom Gladwell or Don Tapscott and get on board themselves!  
 
((Yawn)) Marketing remains a tactical expense, not a strategic investment. 
 
But the truth is, a few smart businesses are applying direct response marketing practices -- with a high degree of accountability... within the digital realm. So CEO's are expecting some marketers to align with sales quotas. And digital direct response marketing is a path forward... a way to align. 
 
For instance, I recently interviewed Logan Services www.logan-inc.com), an HVAC company successfully generating local leads using Facebook and blogging. The long-gun marketing manager here isn't advertising, she's creating demand. She knows what quota is. And that's what drives her spending. 
 
Example: Logan agreed to give-away a free Trane furnace on one condition: It needed 200 verifiable leads first. Once the designated number of contest participants was reached it was “game on!” All participants need do is tell a compelling, personal story – explaining why they need the furnace.  
 
In two weeks, Logan walked away with nearly 400 email addresses from local prospects – most of whom will soon be needing a replacement furnace.  
 
Spot on, Jim.

Jim- A possible solution to this problem is the creation of the job of Chief Revenue Officer. My friend Alex Shootman (@shootman) is the CRO over at Eloqua. Everyone in that organization, marketing and sales, has a clear line of sight on what the goals are.  
 
 
 
 
 
In my experience, organizations that look at the entire revenue cycle as one process vs. sales/marketing as two procesess, outperform those that don't.

Expenses get cut, investment gets nurtured. For as long as marketing cannot quantify its impact on revenue, it will continue to struggle.  
 
I spoke yesterday at a SFDC Marketing event in Boston. 1 person out of 240 was able to define the Sirius Decisions waterfall methodology and its impact on pipeline, but 70% of the room said they were using marketing automation. 
 
How can you invest in technology but not understand the core processes behind it that drive the engine? 
 
Marketing needs to be measured and paid on revenue contribution - that is how you gain alignment. CRO's like Alex Shootman are becoming more commonplace. A quick search on LinkedIn for the term shows 31,000 plus in the United States. Hopefully that is a strong sign that organizations are putting sales and marketing in one organization, gaining true alignment and focused on a singular goal - producing revenue.

Great post James. This is similar to a thread - 'should marketing carry a quota' that has been talked about for awhile. 
 
Marketing has dodged this bullet (question) by saying that they don't control the sales process and therefore don't have control over the numbers.  
 
This appears to be a cop-out, but think for a second if marketing did. I've seen marketing in some companies refuse to commit to their 'numbers', without having control over parts of the company, including product development. This proved disastrous as the CMO did not have the experience to make it work. 
 
In this case, marketing needs only to know the numbers, not achieve them. This is an easier sell and much less risky. This should be almost mandatory in marketing for the 21st century. Thanks for bringing that to light. 
 
BTW, how different is CRO from what used to be (and still is), the VP Sales & Marketing?

This is not only a great point, but the first time I've seen real data on how bad the problem is. 75%! Yipes! Jim, please pose the question sometime next year, and let's hope your wisdom has taken hold among marketing departments.

From my perspective, working at a mid-sized b-to-b agency, it is actually surprising that this question is still being posed when we have fully entered an era that demands marketing efforts be measured and deliver demonstrated ROI. 
 
Yes, b-to-b marketing managers must be aware of sales quotas. They simply can’t do their job properly if they do not. 
 
To create measurable b-to-b marketing, the marketer should be using sales pipeline goals and quotas, along with a shared lead definition, to build their marketing funnels that is perfectly aligned with the sales funnel – showing the movement of the prospect all the way through the sales cycle. 
 
When both sales and marketing share the same lead definitions for prospects as well as agreed upon milestones for each stage of the combined funnel, it becomes possible to measure how both groups are doing moving prospects through their assigned stages against benchmarks and where optimization is needed. 
 
In fact, the only way to build a marketing funnel in the first place that includes an allowable CPA and CPL is by backing out from the sales funnel so you have to be aware of the required size of the pipeline in each stage of the sales funnel in order to have enough leads in the marketing funnel to meet those demands. You can’t build a marketing funnel without understanding the sales funnel and the quotas that are contained within. 
 
As a side note from a guy who has, in his career, managed sales teams on the client side as well as worked as a marketer within both agency and corporate environments, I’ve observed that when marketing and sales attempt to align in this way and get on the same page of lead definitions and pipelines, there is often way more pushback from SALES, specifically SALES MANAGEMENT, then from the marketing side. 
 
In principle, sales loves the idea of marketing being held accountable.  
 
But two things happen when you go through this process that makes more than a few sales executives uncomfortable. 
 
First, once a lead is defined in a granular way, underperforming sales reps lose a huge excuse. They can no longer chuck out truly qualified leads that they are unable to close by merely telling their bosses “they are garbage.”  
 
Simply put, if these prospects meet the definition of a lead everyone has agreed to, that sales rep no longer has any excuses if he or she can’t close. This ruffles feathers. 
 
Second, sales management teams often love to mindlessly create “stretch goals” where individual reps are assigned % increase quotas with no real consideration of actual market potential/market penetration and cost-per-acquisition. 
 
With a combined funnel, it is abundantly clear that a much more careful approach to quota planning is required that starts with the marketplace and not a mere percentage increase. This makes sales management a much more strategic undertaking and far too few sales managers are strategic – they were likely promoted because they were great salespeople and great salespeople typically hate complicated, research-driven processes as a rule. 
 
On the marketing side, moving to this kind of pipeline alignment requires marketers who have direct response skills and are not just marcom professionals. But there are a LOT of those folks out there to hire if you let go of demanding industry experience. If your marketers are uncomfortable with working with sales teams to meet quotas, find better marketers.

Great point Jim, except in my experience blame usually falls further up the line in Marketing. It's up to the VP of Marketing/CMO to align at a high level with the Sales team - including being aligned on goals. 
 
If that alignment is in place, the rest of it generally flows. But too often, it's not. 
 
As they say, sh*t rolls downhill so it is often the poor Marketing Manager who takes the fall, but blame more often than not belongs with the person who is hiring his/her replacement.

Absolutely marketing needs to know the sales quota to plan accordingly. To add, it also works well when both sales and marketing agree on an ideal customer profile which should deliver higher quality leads.

Hi Ken from VanillaSoft: While you agree marketing should know the quotas, I have seldom found a sales manager who has the interest in ROI, Closing ratios, etc. sometimes market share. If you have a secret sauce for getting sales management to sit down and discuss it I sure everyone would like to know it. Thanks for your comment.

Hi Trish: How can everybody get a copy of your ebook, Sales Speaks? Can we get a copy for the resource center of the Sales Lead Management Assn?

Hi Laura Patterson : How do you recommend marketers do the analysis for the source of the sales? Yep, CRM will do it but we hear so often it is not used.

You’re right Chris (Selland) most of the issues between sales and marketing are created or solved by the leadership of both teams. I agree it mostly lands at the feet of the marketing VP as he or she is more aware of what can be done. If the marketing VP gets it, they can service sales whether they initially agree or not.