“The aim of marketing is to make selling superfluous.”
— Peter Drucker, Management: Tasks, Responsibilities, Practice
Although Prof. Drucker was writing about marketing’s requisite knowledge of market needs folded into product development so that the product sells itself (which is another topic in and of itself: how marketing has abdicated this basic responsibility), the quote’s applicable when you consider how far reaching the Marketing function should be within any organization relative to opportunity-delivery into the Sales function. Put it another way: at what point in the marketing and sales funnel should Marketing transfer ownership of a “lead” over to Sales? That point marks the point of Lead Conversion.
Although Lead Conversion is not a new topic, its relevancy has been refreshed due to the growing importance of Lead Nurturing. For the most part, the term Lead Conversion is a part of the CRM vernacular, referring to when a “lead” within the CRM database is converted to an “opportunity”, and with it, an assigned dollar value and a timeline-to-close; for the most part, it is the Sales function’s responsibility to convert the lead into the opportunity, i.e., the Sales Team triggers the Lead Conversion. Marketing’s role is to fill the CRM database with leads for pursuit by Sales. To this end, much has been written about the need for a common understanding between Marketing and Sales as to what is a lead so that the proper leads are delivered into the Sales team. With a common understanding established, the Marketer can then create the appropriate programs to deliver and possibly nurture leads. Sounds good, but let’s take this a step further…
Think of the marketing and sales pipeline going left to right, where everything to the left of the point of Lead Conversion is owned by Marketing, and everything to the right is owned by Sales. With a common understanding of when a lead converts to an opportunity, and the party responsible for converting the lead to an opportunity, the marketer can then define the extent of Lead Nurturing. Take a look at two ends of the spectrum:
- If every lead coming in auto-converts to an opportunity, then there is no lead nurturing. The point of Lead Conversion is the point where a form is submitted (or a call recorded, etc.). Marketing’s role is to only fill the front end of the funnel.
- On the other end of the spectrum, if every lead coming in is only converted to an opportunity at the point when the prospect is ready to sign a term sheet or contract, then the lead nurturing process is incredibly extensive. Marketing owns the complete funnel, and for that matter, any required selling.
For most organizations, the answer lies in-between and drives the structure of your Lead Nurturing process. But where should that point of Lead Conversion exist? And why is this important?
When you consider the total marketing spend across all companies, marketing’s function really should extend right up to the point of sale so that the ROI is completely measurable and justified without any data fudging or debate. And that point of demarc is Lead Conversion: it completely impacts the extent of a company’s Lead Nurturing program which, in turn, impacts Marketing’s ROI. So the deeper that marketing’s control extends into the marketing/sales cycle, the more extensive the Lead Nurturing program, and the greater the control over the ROI measurement.
Look at it another way: the marketer receives a boatload of dollars to drive leads which in turn drives sales. Marketing’s value is its ability to maximize its investment so that the greatest numbers of sales opportunities are served up to Sales. So it is in Marketing’s best interest to take deep control over the Lead Nurturing process so that the function can continually and unequivocally prove its value to the organization. Conversely, why would the Marketer risk his/her future by relying on another function to convert leads into opportunities? Especially in today’s environment, it’s a risk not worth taking.
As a marketer, I want to control every aspect of my spending so that I can turn to management and say without any quibbling that I have positively and without-a-doubt contributed to growing revenue. I want to control the process so that my future is in my hands. As a result, I want to establish the Lead Conversion point deep into the marketing/sales cycle, and I want to be the one to pull the trigger on converting a lead to an opportunity, and I want to build a rock-solid Lead Nurturing program where I can deliver deals into the company, not leads! Do I really want my destiny in the hands of another function when I have the budget and resources to control my destiny?
So when I get together with Sales to discuss the definition of a lead and the party responsible for converting the lead to an opportunity, I’m going to state my case for going deep into the funnel, because I want as much control over the output of my spending as possible. Part of my argument will be around how I want the Sales team focused on closing deals and not chasing anything less than that, as that’s the true measure of a solid marketing program. I want to reduce sales opportunity costs, where the opportunity cost is the cost of the sales team pursuing all those leads at the expense of pursuing true opportunities: do I really want the sales team pursuing leads, or do I want them closing deals?
So what are the benefits of having a deep-into-the-funnel Lead Conversion point?
- I’ll now have the true measure of the efficacy of a marketing program, and control over my destiny
- I can build my Lead Nurturing Program around prospect interaction/communication
- And my budget will have a more believable ROI associated with it
Lead Conversion should be the domain of the Marketing function, as its future depends on it.
Two helpful articles:
http://www.e-myth.com/cs/user/print/post/lead-conversion-scouting-out-a-more-effective-system:
http://www.dmnews.com/Maximizing-lead-conversion-to-win-more-deals/article/109339/
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