Lead Qualification - Resolving The Conflict Between Sales and Marketing

Lead Qualification – Resolving the conflict between sales and marketing www.reach1to1.
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Lead Qualification –
Resolving the conflict between sales
and marketing
August 24, 2009
Author
Mr. Ashutosh Bijoor
Reach1to1 Technologies Pvt. Ltd.
bijoor@reach1to1.com
Copyrights: Reach1to1 Technologies Pvt. Ltd.

Lead Qualification – Resolving the conflict between sales and marketing www.reach1to1.com
Lead Qualification – Resolving the

conflict between sales and marketing
Biggest Sales Challenge – Generating high-quality leads
According to a recent report by MarketingSherpa, the biggest challenge for sales people
is to generate high-quality leads.
To try and understand why it is such a big challenge, we must first answer the question
– what exactly are “high quality” leads?
Universal Lead Definition
Lead generation guru, Brian Carrol says that most companies lack a clear definition of a
sales lead – that is, their sales and marketing departments do not agree on a universal
lead definition. He responds to the above survey results on his blog and advises sales
and marketing teams to work together to create a Universal Lead Definition (ULD). If
leads generated by marketing are transferred to sales without qualification, sales
persons will assign a very low priority to following them up. By having a common
definition, marketing can presumably ensure that leads passed on to sales are qualified
as “high quality”, so as to address their concern.

But can sales and marketing really agree on a common definition of a qualified lead? To
answer this question, we need to understand how we measure the performance of both
these functions, and see if having a common definition is consistent with their individual
objectives.
The Marketing Perspective on Leads
Marketing perspective on leads
From a marketing perspective, the ROI of marketing initiatives – campaigns, events etc.
– are measured by the number of leads generated. Hence, they tend to keep minimal
qualification criteria so as to get the maximum number of leads possible for the given
marketing budget. For example, in case of a direct mailer, every response is considered
as a lead. Or in case of a promotional event or exhibition, every person who drops a
visiting card is considered as a lead. And rightly so, for however small the chance of
success and however long the sales cycle, a lead is still a prospective sale!
Marketing ROI ~ Number of leads generated / Marketing Spend
To maximize the ROI of marketing initiatives, marketing requires lax lead qualification
criteria, if any.

The Sales Perspective on Leads
Sales perspective on leads
From a sales team’s perspective, sales performance is measured by their ability to meet
targets for a pre-defined period, such as a quarter. Follow-up of every lead requires
sufficient time – more so when the buying process is complex and involves several
decision variables. Available sales time is limited primarily by the size of the sales team.
If each lead is to be given the necessary time and attention, there is a limit to how many
leads the sales team can follow up.
The primary sales performance indicators are:
Conversion Ratio ~ Orders Won / Leads or opportunities
Value Converted ~ Sales Order Value / Sales Targets
Sales persons usually prefer to maintain conversion ratio at a healthy level depending
on the market average. A higher than normal conversion ratio could imply inadequate
number of leads or opportunities in the pipeline, while a lower conversion ratio could
indicate lack of adequate closing skill.
Hence the main determinant of performance is the ability to achieve assigned targets.
For this, sales persons will choose to follow-up on those leads or opportunities that:
• have the best chance of closing within the current evaluation period (e.g. current
quarter) and
• have a high enough estimated sale value to cover the deficit in their assigned
target.
As such, opportunities that are already in the pipeline will serve these objectives better
than leads that have dubious value and unknown sales cycle. Hence leads are usually
given a lower priority, or postponed indefinitely, unless they have a proven quality.
To maximize sales performance, sales require strict lead qualification criteria.

The Sales and Marketing Process Disconnect
The Marketing and Sales processes are usually disconnected from each other. Philip
Kotler, Neil Rackham and Suj Krishnaswamy write in an HBR article:
Sales departments tend to believe that marketers are out of touch with what’s really
going on in the marketplace. Marketing people, in turn, believe the sales force is
myopic–too focused on individual customer experiences, insufficiently aware of the
larger market, and blind to the future. In short, each group undervalues the other’s
contributions. Both stumble (and organizational performance suffers) when they are out
of sync. Yet, few firms seem to make serious overtures toward analyzing and enhancing
the relationship between these two critical functions.
They conclude that:

The strains between Sales and Marketing fall into two main categories: economic (a
single budget is typically divided between Sales and Marketing, and not always evenly)
and cultural (the two functions attract very different types of people who achieve
success by spending their time in very different ways)
Further, the marketing and sales processes are also disconnected. The marketing
funnel works with the target market and attempts to generate leads. The sales funnel
starts with opportunities and attempts to generate sales orders.
Marketing and Sales Process Disconnect
A forced connection between these two processes will require a resolution of the
conflicting definitions of a lead that both departments will have.
In case we try and implement the marketing perspective of a lead and have lax lead
qualification criteria, every lead captured by marketing will need to be followed up by the
sales team.

Forced implementation of marketing perspective - lax lead qualification criteria
This will result in overloading the sales team, resulting in lowering the conversion ratio
and the sales value converted. On the other hand, forcing the implementation of the
sales perspective of strict lead qualification criteria will result in reduction in the
marketing ROI, and very likely lead to lost business.
Forced implementation of sales perspective - strict lead qualification criteria
As we can see, there is a conflict on hand. It seems impossible to arrive at a universal

lead definition as suggested by Brian Carrol, and even if we manage to agree on a
common definition, implementing it will result in either departments individual objectives
to be compromised.
We shall use the Evaporating Cloud methodology to try and break this conflict.

The Sales and Marketing Evaporating Cloud of Conflict
The Sales and Marketing Evaporating Cloud of Conflict
1. Both departments are working towards a common objective – of ensuring high

sales volume
2. The marketing department tries to achieve this objective by maximizing the
number of leads generated from marketing initiatives.
3. The prerequisite for this is that the lead qualification criteria should be as lax as
possible
4. The sales department tries to achieve high sales volume by maintaining their
conversion ratio and maximizing the sales value generated
5. To prerequisite for this is that they have a strict lead qualification criteria that
ensures that the sparse sales resources are utilized well
To evaporate this cloud of conflict, one must examine the underlying assumptions
behind each argument that lead us to the conflict.
The following are the two assumptions that lead us to the conflict:
1. Leads have to be qualified either by sales or by marketing

2. Leads that are not qualified are dropped out of the funnel
Both these assumptions are invalid, for:
1. Lead qualification can be done by an independent, low cost resource – such as a

tele-marketing team or by using an online self-qualification system.
2. Leads that do not qualify can be nurtured in a low cost CRM initiative that helps
develop the lead into a qualified lead

An independent, low-cost lead qualification and nurturing process
Lead Qualification and Nurturing Process
By having an independent lead qualification team that uses a low-cost telephonic or

online qualification process, leads generated by marketing initiatives can be divided into
two groups:
• Leads that satisfy the universal lead definition

• Leads that do not satisfy the universal lead definition
Lead Qualification Process
The leads that qualify the ULD can be immediately transferred to the sales team to
follow-up and close. The leads that do not qualify can be put into a nurturing program

that maintains the dialog with the lead till it converts into an opportunity that is worth
following up by the sales team.
The objectives of the nurturing process are to:
• Maintain a continuing dialog with the lead by using nurture marketing initiatives,
till it satisfies the universal lead definition
• Capture and track all responses and behavior of the lead
• Develop an intelligent buyer profile that can assist the sales process to close the
resulting opportunity
Lead Nurturing Process
There can be various types of low-cost nurturing initiatives, including email campaigns,
online and offline events and webinars, articles and white papers on the web site, blogs,
etc. Each of these initiatives will result in some responses. All such responses can be
tracked and recorded in the lead nurturing process. Every response, be it a click on a
link in an email campaign, downloading a white paper, comments on a blog, etc. add to
a valuable buyer profile that is useful when the lead converts into an opportunity for the
sales team to follow up.
Conclusion
It is possible to resolve the conflict between sales and marketing by introducing an

independent lead qualification process that utilizes universal lead definition criteria for
evaluating every lead generated by marketing initiatives and categorizes them into
qualified and un-qualified leads. This strategy not only breaks the conflict, it can
enhance the individual performance metrics of both departments.

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Lead Qualification – Resolving the conflict between sales and marketing www.reach1to1.

August 24, 2009

Copyrights: Reach1to1 Technologies Pvt. Ltd.