Eliminate the two Black Holes in your Marketing and Sales Process to Increase the Value of Your Company

by Mark Friedman

There are two Black Holes that lurk in most companies' Marketing and Sales processes that systematically suck sales and profit performance out of them.

How large are these Black Holes?

In a study conducted by Performark, it was estimated that annual Business-to-Business direct marketing program spending is more than $100 Billion! Although the size of these Black Holes varies by company and it is directly proportional to the size of their Marketing budget and the effectiveness of their Sales Lead Management system.

How do we know they exist?

Several recent studies point to the existence of these Black Holes.

• A Harvard Business School study recently indicated that fully 80% of the leads generated by Marketing are never followed up by Sales.
• The Trade Association that supports the Trade Show industry ran a study, which found that 70% of all leads generated at Trade Shows are never followed up by Sales.
• Proprietary research conducted by The Velos Group indicates that the Number 1 issue facing smaller companies in this area is the inability to track the Return On Investment (ROI) for the money they spend on Marketing programs. Very closely related to this issue is their concern about the money they've spent on Sales Force Automation (SFA) or Customer Relationship Management (CRM) software.

What do these Black Holes look like?

Black Hole 1: The President or Owner of the company gives a whole bunch of money to the VP of Marketing at the beginning of the year to generate leads and increase sales. At any point during the year the President asks the VP what's happening with the money and the VP doesn't have the reporting to indicate precisely what leads have been generated and closed by Sales. The President thinks the money he gave the VP has disappeared down a big black hole.

Black Hole 2: We all know that the VP of Marketing actually conducted Direct Mail campaigns, went to Trade Shows, advertised in Magazines and created other programs expressly designed to generate leads for Sales. Once the VP of Marketing received these leads, he or she then sent them, in bulk, to the VP of Sales and proudly stated, "Here, I've done my job, now close some business." The problem in most organizations is that the VP of Marketing never hears back from sales regarding what happened with those leads. The VP feels like the leads disappeared down the big black hole of sales.

What can a company do to eliminate these Black Holes?

The key to eliminating these two Black Holes is to implement a Closed Loop Lead Management system. Here are the important steps to accomplish this:

1. Conduct a thorough assessment of your current Sales Lead Management processes and procedures. Taking a systems approach, evaluate how sales inquiries are received, how they are entered into your database, how they are distributed to sales and how you receive feedback from sales regarding the status of all leads sent to them. The objective of this assessment is to rationalize, standardize, streamline and document the way your company manages this important business function.

2. Get your sales and marketing departments together and agree on several important issues:

a. Define the criteria for the creation of an account profile; what account information is available and important to both sales and marketing in their respective jobs of closing sales and segmenting the marketplace.

b. Define the criteria what that constitutes a qualified sales lead

c. Define the criteria for distributing a qualified sales lead; the faster a lead gets to the ultimate lead owner, the better.

3. Document and utilize a consistent Sales Methodology. Without a clearly defined sales methodology, sales representatives lack a common framework and language for assessing opportunities. For example, sales representatives in one geographic region may have a very different understanding of "qualified opportunity" or "80 percent chance of closing" than the representatives in another region. Additionally, some representatives may have a tendency to be either overly optimistic or pessimistic. As a result, even small differences of opinion or judgment within a sales team can negatively impact the accuracy of the sales forecast.

By implementing a clearly defined sales methodology, organizations can eliminate inconsistencies in the way information is entered into a sales forecast and greatly increase overall forecast accuracy.

4. Eliminate the use of Excel spreadsheets. The use of Excel spreadsheets seriously inhibits the implementation of a closed-loop Sales Lead Management system as it typically is an off-line system that lives on each sales person's C-drive and often breaks the link the inquiry lead source and the current sales status at the account. Once this happens, it is almost impossible to track Marketing program ROI. And we know that many of our respondents do use Excel

5. Define a suite of management reports that:

a. Provide management with the information they need to make better business decisions. Reports should address both sales and marketing performance. For Sales, it is critical to create Sales Activity as well as Pipeline and Forecast reports. For Marketing, it is important to crate reports that track the Return on Investment (ROI) for each marketing activity.

b. DO NOT overburden the sales rep in providing the information to complete the reports; the less information required from sales, the more likely they will be to provide it.

And lastly, be realistic. Remember that creating a fully functional and efficient Closed Loop Lead Management system is an ongoing endeavor and will require the full support of the company. It takes time and hard work to go through the proper planning process as outlined above. However, in the end, done well, your company will realize more sales and have the information necessary to make much better marketing decisions.

Once eliminated, the company experiences the following:

Increased consistency and predictability of sales and profits

Increased company value as processes and systems drive success in support of the energy and passion of the owner.

The ability to track the ROI for each marketing program. The efficient allocation of the scare marketing budget to those programs that are most effective in generating the highest quality leads is a powerful driver of sales and profits.

More timely and accurate sales forecasts as the SFA/CRM software is used effectively. Many companies we surveyed still didn't use a formal process to forecast sales and when they did, many still used a series of excel spreadsheets.

About the Author

Mark Friedman is an experienced, results - oriented executive with over 25 years of proven success in managing Sales, Sales Lead Management, Telemarketing, Marketing and Customer Service. Notably, world-renown consulting giant Accenture and the Distribution Research and Education Foundation have recognized one of his programs as a Wholesale Distribution Industry Sales "Best Practice"; the program overview was published in "Maximum Sales Velocity: How to Build a World-Class Sales Organization" by David P. Woodrow.

Mark possesses the outstanding ability to assess a company's current Sales Chain and make recommendations for dramatically improving sales results and productivity while providing the infrastructure to determine ROI for each Marketing activity. Among his accomplishments was revamping a moribund program generating a mere $175,000 in revenue per year and increasing the "top line" to over $113 Million in 3 years. Additionally, he has increased sales volume by over 50% in call center environments at several companies by integrating Out-Bound Telesales capabilities with the In-Bound Customer Service group. Mark has proven that he is a high-energy achiever and team builder in an often - neglected area.

His articles on Sales Lead Management have appeared in Network World, Sales and Marketing Excellence, Sales and Service Excellence magazines, the PMMI Newsletter and MHEDA Journal.

Mark is co-founder of the national Sales Lead Management Association. He is a Vistage Expert Speaker and has spoken at national events, such as the PMMI (Packaging Machinery Manufacturer's Institute) Marketrends conference, the 50th annual MHEDA (Material Handling Equipment and Distributor's Association) conference and the CGNA (Controls Group North America) conference about Sales Lead Management and the value of Sales Force Automation/Customer Relationship Management software.

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