How effective is your sales process?

February 28, 2007 – 11:41 am

Managing your sales process is expensive. And if you are in the information technology or related industry, you are not alone. Carl Rahn Griffith, founder of egoboss, a highly respected consulting and advisory firm in the information technology industry comments on his blog:

Across the tech vendor community, approximately 50% of marketing investment is allocated to demand generation and about one-third of that investment is ear-marked to directly support the sales force. New research from IDC shows that, for most vendors, this complex and expensive intersection of marketing and sales remains very much a “work in process.”

What are the main bottlenecks in managing this escalating cost of sales?
What are the best practices being followed? What systems and processes need to be put in place?

As the IDC’s CMO Advisory Practice points out and which resonates with our experience from the On2Biz community:

  1. A consistent, global definition of a lead - We have seen with each business that begins to use On2Biz, that sales teams are often clueless on what a lead is. Some sales persons tend to consider every visiting card they collect as leads. While other more skeptical sales persons only register a lead when they are confident that the order will come through. This inconsistency in definition of what a lead is can only be corrected by a globally communicated definition of a lead, established as a standard company policy.
  2. Lead Capture, Lead Qualification and Assignment to Sales - Leads could be captured from multiple sources. There needs to be a well defined qualification process, where certain minimum requirements for qualification are verified by the lead capturing team. Only qualified leads should be forwarded to the sales team. Bad quality leads wastes costly sales resources. And qualification done centrally keeps the leads qualification process under control.
  3. Sales Performance Measurement - As we have discussed previously in various posts under “Sales Pipeline Management“, performance management is really the first step towards managing sales costs. In On2Biz implementations, we insist that our first users are managers and not sales persons. Unless managers are able to measure sales performance by using a clearly defined set of key performance indicators, sales effectiveness will never improve.

Carl quotes the recommendations offered in this study:

  • CMOs must dedicate a lead management individual or team to develop and govern a marketing lead management process across the organization, ideally in collaboration with a similarly tasked sales lead manager. Senior management buy-in and support is required at process development, roll-out, and governance.
  • Providing quality leads and establishing the ability to track leads will only be possible once marketers and other system users understand the need for a lead management process and its impact on the success of the marketing function. Many leading sales organizations tie use of their CRM system with compensation; it’s time for marketing to follow suit.
  • Performance measurement in the lead generation process will enable marketing to quantify its true impact on the sales pipeline (e.g., marketing-generated and marketing-enhanced leads and deals) and lead velocity. This will also enable marketing to establish a direct feedback loop to improve its campaign effectiveness along the entire customer development lifecycle – from awareness through advocacy.

If you are wondering how to manage all this, may be its time to Get On To Business to On2Biz way! - Could not resist the plug :-)

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