Rewarding Bad Behavior

10/23/2013

Rewarding Bad Behavior

Preface: In just over two weeks, here at Godfrey, we are hosting the FWD:B2B Conference, highlighting the growing intersection of marketing and technology. The five speaker sessions will look at trends in B2B marketing while tackling timely topics ranging from social media to content marketing to online reputation management. It promises to be an informative, invigorating day!

In anticipation of the event, we wanted to highlight the speakers through a series of blogs leading up to November 7th. First up is a guest blog from B2B Social Media Expert Paul Gillin:

Rewarding Bad Behavior: Why Sales and Marketing Can't Get Along

Every couple months I get a call from a sales rep at a very large technology company. The rep asks about my IT budget and who’s responsible for making my company’s buying decisions. I politely explain that I'm self-employed, have no IT department and probably spend about $2,000 each year on computers and software. I also ask to be taken off the call list, since continued outreach is wasting everyone's time.

Yet the calls keep coming, which illustrates one of the frustrating disconnects that plagues B2B marketing and sales organizations.

The reason I get these calls is because I occasionally sign up for research or webcasts given by this company. The information I provide about myself at that time (fewer than 10 employees, less than $1 million in revenue) should automatically shunt me onto the "bad lead" list. But even at one of America's most respected technology companies, the fact that I have a phone number and a pulse is good enough.

Tension on the Front Lines

Marketing and sales organizations at most of the B2B companies I've worked with have a relationship that can be politely described as strained. Marketing's job is to generate leads and sales’ job is to follow them up. Sales complains that marketing gives them lousy leads while marketers argue that sales wouldn’t know a good lead is it bit them on the nose.

Both sides are correct. That's because many organizations reward their sales and marketing people for the wrong things.

Marketers are typically rewarded for lead quantity rather than lead quality. Campaigns are measured based upon the number of leads they generate and cost-per-lead (CPL) is a closely watched metric. These forces combine to encourage marketers to shovel names over the wall. Many companies don't even have a clear definition of lead quality that everyone can agree upon. Even if they did, quality is a lot harder to judge than quantity, so it’s easier to fall back on pointless metrics like CPL.

Salespeople are measured on revenue and call volume. This encourages dialing for dollars in search of warm prospects and discourages the kind of research that can identify more valuable long-term prospects. But salespeople aren't paid to do research. If they aren't on the phone, they clearly aren’t doing their job. Better to call a bad lead than to spend time researching a good one.

Break the Cycle

In his excellent book, The Truth about Leads, Dan McDade estimates that marketers spend about 90% of their time generating leads and about 10% qualifying them. He believes the ratio should be reversed. "Fewer than 7% of leads passed to sales by marketing should be," he writes.

McDade is equally critical of sales organizations, which he believes are too focused on chasing short-term opportunities at the expense of cultivating long-term relationships. It may take a dozen or more calls and e-mails to get the attention of a single prospect, he writes, but the leads that take the longest to close are likely to be the best long-term clients.

Technology now exists that can bring an end to this perennial squabble.  Today's CRM systems are so plugged into the social web that they can feed back all kinds of useful information about prospects and the companies they work for. However, the biggest complaint I hear about CRM systems is that nobody uses them.

That needs to change. We’ve all been hearing about how data-driven the marketing function is becoming. That trend needs to extend through the sales cycle so that everyone who touches customers knows as much as possible about them. Social media, Big Data and sophisticated CRM systems now make it possible for every sales call to have a personal touch, and for pointless calls to be avoided altogether. Customers are soon going to come to expect that kind of attention.

To read more from Paul, visit his blog at http://gillin.com/blog/.

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