One of the first signs that a sales organization of a small company is growing and maturing is that they no longer rely on the sales team to generate leads. In the early stages of development, a new company requires that everyone “wear multiple hats”. Consequently, the salesperson usually plays the role of Chief Marketing Officer, Marketing Campaign Manager, and Business Development Specialist. It’s quite simple really—if the salesperson doesn't generate leads, no one will. But as an organization matures, the various Sales and Marketing disciplines should be divided as soon as possible. Not doing so simply makes achieving growth objectives more challenging and makes your life tougher than it needs to be.
Unfortunately, many organizations get stuck in this first stage of organizational development, and they continue to rely on the sales team to generate their own leads. Salespeople should really never stop prospecting. They should always be on the lookout for new business opportunities. But an organization that completely relies on Sales to generate leads are putting their growth objectives at risk. Below are three primary reasons why.
1. Inconsistent Output
Your sales team should be focused on closing new business. That’s why you hire them. That’s what they're good at. That’s what they're rewarded for. And that’s what they enjoy doing. Consequently, any activity that distracts them from this objective becomes a nuisance. It becomes a task that will fall to the bottom of the to-do list whenever possible. Tasks at the bottom of the to-do list—the things we don’t like doing—typically get the least amount of our energy and attention. A salesperson with deals at the bottom of the funnel will be (and should be) consumed with doing whatever they need to do to close the business. This can mean large peaks and valleys in performance. When they're closing business, they’re not prospecting. And when they’re not prospecting, they’re not closing business. Effective lead generation requires consistent disciplined execution. Most salespeople lack the time and focus required.
2. Difficult to Measure Effectiveness
One of the fundamentals of a sound marketing strategy is measurement. We can’t know how effective our marketing efforts are or what the ROI of our marketing investment is unless we measure. Measurement means isolating, monitoring, and tracking various KPIs (Key Performance Indicators) and movement through various stages of the sales pipeline. These stages may include leads, MQL (Marketing Qualified Lead), SAL (Sales Adopted Lead), SQL (Sales Qualified Lead), and opportunity (a deal that can be forecasted). When multiple steps in the sales funnel are managed by the same individual, it can be difficult to measure lead movement and conversion rates. This problem is compounded when salespeople don't track their activities and results of their calls/meetings in a CRM. If activities aren’t tracked in a CRM with discipline, you run the risk of losing visibility into leads altogether.
The most expensive lead generation source for most sales organizations is rarely ever measured or monitored. In fact, it is often ignored completely. If an organization is not measuring the KPIs associated with their sales team’s lead generation activities, then they really have no idea what their true cost-per-lead is. In actuality, their lead costs are significantly higher when the salary and other overhead costs associated with a sales position are factored into the equation. If organizations knew how much the leads generated by Sales truly cost, they would make every effort to minimize the amount of time Sales spent on lead generation activities.
The sales team should always have some role in building their own pipeline. However, relying on Sales as your primary source of leads can be risky and expensive. In order to reduce lead generation costs, Marketing should deploy tactics that can be both executed with consistent discipline and measured closely.
One tactic that accomplishes both isinbound marketing. Inbound marketing is a methodology that attracts the attention of prospects using content creation. The content positions your organization as thought leaders, subject matter experts, and trusted advisors. When publishing this type of content and promoting it to the right audience, prospects will self-identify and “raise their hands”. The end result is qualified leads that are significantly less expensive than those produced by the traditional outbound leads generated by the sales team. In fact, HubSpot’s research estimates that they cost 61% less.
If your organization is growing, dedicating your marketing team to generating leads and your sales team to closing them is smart for all of the reasons above. There will always be overlap, but when Sales and Marketing are working together on their own tasks, you get a lot more for a lot less.
Editor's Note: This post first appeared on the LeadG2 blog.