Lead Management Software Channel Feature

PointClear President Sheds Light on Lead Management Strategies

By Juliana Kenny
TMCnet Web Editor

In the ongoing debate surrounding how best to manage lead generation, there remain questions about the relationship between sales and marketing, and what the optimal method is to focus both departments’ efforts.

In his book, The Truth About Leads, Dan McDade, president at PointClear,addresses these issues related to business-to-business sales, marketing, and lead generation. According to Ken Murray (News - Alert), president and CEO of VanillaSoft, a leading provider of lead management software, Dan’s book “sheds light on the little-known secrets that help focus B2B lead-generation efforts, align sales and marketing organizations and drive revenue.”

To get more insight into how companies can best take advantage of their sales and marketing departments, and to understand better the newer trends in lead management, TMC (News - Alert) interviewed McDade. Read on to see the secrets he revealed concerning the most profitable sales strategies, and how fewer leads might be the key.

JK: Why is there a gap between sales and marketing and what can companies do about it?

DM: With marketing focused on lead generation and sales geared toward closing business, these functionally divergent groups are often out of alignment. Marketing doesn’t understand why more leads are not followed-up by sales, while sales has been conditioned to discard all but the most obvious and short-term opportunities. So what happens? Leads end up languishing in what SiriusDecisions calls “lead purgatory”—a wasteland of effort, money and time.

The result of this seemingly endless gap—if it isn’t bridged in part through prospect development—is that a large number of opportunities are overlooked. They lie buried among dozens of relatively insignificant leads delivered by direct marketing campaigns, tradeshows, whitepaper downloads and webinars, and they are lost…simply because no one takes the time to separate the real deals from the hand-raisers, and prioritize everything in between.

A separate, dedicated group inside or outside the company needs to take control of the prospect development function to conduct the lead qualification and lead nurturing activity required to deliver a lead that warrants rep engagement.

JK: I have heard you say that a sales force actually needs fewer leads, not more leads…how can that be?

DM: Conventional wisdom has it that more leads are more likely to deliver more opportunities and therefore more deals.

But a sales paradox is at work here. Reps actually need fewer sales leads or, more accurately, fewer unqualified, unfiltered marketing leads. Drowning reps in more leads—especially those of poor quality—can actually make things worse.

With standard lead generation’s high-volume focus, the pipeline is flooded with far too many low-value leads that can’t and won’t deliver sales and marketing ROI. It’s no surprise that many recent surveys of sales executives and sales reps report an overwhelming majority of marketing-generated leads are not being followed up because quality is perceived to be poor.

Sales reps do need leads that have been carefully qualified, consistently nurtured, and appropriately developed until they are ready to be delivered as high-value, sales-ready opportunities. Reps can then focus their time more effectively on the most likely buyers.

JK: What are the two strategic changes you recommend companies make first?

DM: As simple and obvious as it sounds, first agree on the definition of a lead, and include a best-practice lead progression framework. SiriusDecisions uses its demand waterfall to define lead stages:

Marketing Qualified Lead (MQL) – Qualified and delivered by marketing

Sales Accepted Lead (SAL) – Reviewed and accepted by sales

Sales Qualified Lead (SQL) – Contacted and further qualified by sales

We do not recommend dependence on “BANT” or “budget, authority, need, and timeframe”. Authority and need, however, are critical qualifiers. Appropriately qualified buyers and need infer timeframe. Need should be supported by a compelling event linked to finding the solution to a problem within a specific timeframe. Budget is also driven by need, and it is more important to identify the process and players involved instead of pressing for a budget.

Another critical success factor is market definition. If either sales or marketing thinks the market is larger than it really is, resources are wasted on low-value prospects. If either thinks the market is smaller than it really is, high-value opportunities are not engaged and lost. Identify the largest, most targeted market possible.

JK: What else do you recommend?

Driven by a focus on short-term quarterly results, many companies fail to effectively nurture longer-term leads.  

Companies that are qualified—but not short-term—are mostly ignored by sales. It’s possible to as much as double program revenue with a relatively small incremental investment focused on optimizing long-term lead value.

Let’s say you started with 1,000 prospects and found 40 short-term qualified leads that resulted in eight deals along with 40 long-term opportunities. You could either start over to get another eight deals or nurture the 40 long-term opportunities to get eight deals at a fraction of the cost.     

We also recommend market segmentation and testing. Why? While qualifying 1,000 companies may generate a 5 percent lead rate, a review typically identifies segments with higher and lower lead rates. There may be five segments of 200 companies each with lead rates of 9 percent, 7 percent, 5 percent, 3 percent and 1 percent that—in total—average an overall 5 percent lead rate. Work the best segments.