Sales Inquiries are Not Sales Leads The Case for Qualifying

Sales Inquiries are Not Sales Leads: The Case for Qualifying Sales Inquiries By Mark Friedman, Partner, Cerius Consulting Group In a recent Harvard Business School study, it was reported that over 80% of the sales inquiries generated by the Marketing department are never followed up by Sales. Place that statistic next to the fact that in a recent study, American companies spent over $100 Billion in Business-to-Business Direct response advertising in one year! Think about that for a moment; that’s a lot of wasted money! What are the implications for your company? How many sales people have experienced the disappointment of receiving a fresh batch of “leads” from Marketing, only to find out that they had been to a trade show and really wanted the great little give-away the company was handing out in exchange for their information. Or that the person they called was a really college student looking for information to write a paper? The simple fact is many sales professionals have no confidence that the “leads” from Marketing are any good. If they don’t believe the ”leads” forwarded to them are any good, they won’t call and follow-up. Confidence can be earned by ensuring that all sales inquiries are qualified (based on sales’ input) before they are sent to sales. One of the primary goals of a professional Sales Lead Management program should be to maximize the time a sales rep spends selling to qualified prospects. In keeping with this goal, we always recommend that a separate group of people be responsible for qualifying inquiries and then the sales reps be responsible for engaging and closing these leads. A company increases sales productivity if the people who qualify the inquiries also set either phone or physical appointments for the sales people. Many business owners I have worked with originally said to me, “But that’s what I pay my sales people to do; why should I pay someone else to qualify leads?” In order to start to answer this question, we believe it is best to define a couple of terms that will put us all on the same page: Sales Inquiry: An Account who has expressed an interest in the company’s product or service. Sales Lead: An Account that has been contacted, profiled, has an identified project, AND is interested/ready to buy the company’s product or service What isn’t a Sales Lead? * Trade Show Inquiry * Web Response * D&B mailing list * Magazine Subscription list So, one of the contributing factors to the Sales organization not following up on the Marketing “leads” is that they really aren’t leads to start with; they’re inquiries that need to be qualified. What Marketing perceives as leads, Sales perceives as inquiries. (and often call them even worse things!) To continue to answer the original question, we must start to evaluate the relative productivity of the sales organization versus the amount of money paid to qualify the leads. Let’s take a look at a couple of fundamentals that impact of this analysis: 1. What are sales reps paid to do? In a recent book, Heavy Hitter Selling – Sand Hill Publishing, the author, Steve Martin lists the following primary tasks of a sales rep: a. Build customer relationships b. Know what customers honestly think c. Predict which sales will actually close d. Persuade customers and prospects to change their opinions and beliefs 2. Conversely, what are some non-productive activities sales reps that keep the sales rep from not being as productive as possible? a. Qualifying Trade Show, Advertising and Web Inquiries b. Answering blanket, ad hoc requests for lead status c. Many, Many other things…… 3. Sales reps are usually paid a lot of money (It’s not unusual for a sales rep to cost $100,000 - $150,000 per year including Base salary, commissions, bonuses, benefits and expenses) and expected to close lots of business. In fact, that’s the highest and best use for a sales rep; that’s what they do best and enjoy doing the most. 4. And, if you believe the reports referred to above, the typical sales rep is NOT actually following up and qualifying the vast majority of the sales “leads” sent to them anyway. Although we have no studies from the Harvard Business School, most of us would agree that most sales reps would rather have a root canal that spend time qualifying sales inquiries from trade shows and the other marketing activities. 5. Qualifying sales inquiries typically can be handled quite well by lower-paid telemarketers or Inside Sales reps (It’s not unusual for a Business to Business telemarketer to earn $30,000 to $40,000+ per year). It stands to reason then, if a Telemarketer can qualify the inquiries and only forward qualified leads to sales, then the sales reps can spend more time selling to qualified accounts. The more time in front of qualified prospects, all things being equal, the sales reps will make more sales. Each company then can evaluate the remaining Return on Investment (ROI) by plugging in the number of incremental sales a rep can make by only selling to qualified prospects, the average revenue per sale and the average Gross Profit per sale. For our clients, this analysis typically leads to the establishment of an Inquiry Qualification function; some of them residing in the Marketing department, some in the Sales organization and some of them outsourcing this to a telemarketing agency. Apart from the previously mentioned benefits, our clients also experience the following benefits: • Shorter sell cycles • Increased win rates • Shorter startup for new sales reps • Higher % of sales reps achieving quota • Integrating marketing and sales efforts • Reduced cost of sales So, in conclusion, qualify sales leads before they are sent to sales and watch your sales dramatically increase. All things being equal, if your sales people are spending most of their time in front of qualified prospects, they will sell more and they’ll be much happier as well.