A related post on his blog claims that “Money cant buy you performance”.

Some questions that he raised in my mind:

• When we try to implement scalable business processes, are we trying to “dumb-down” the work to a “mechanical” level?
• Do performance metrics measure only “mechanical” performance and do we run the risk that incentives based on such metrics could negatively impact creative performance?
• How can we ensure that we empower our employees with autonomy, mastery and purpose – that Dan proposes as the components of the new “business operating system” in a scalable model?

Especially in B2B sales, every sales manager we have interacted with has requested that our sales pipeline metrics be converted into an incentive scheme. We have been making plans to implement an incentive scheme, but based on the Theory of Constraints – which proposes to measure global performance metrics – that relate performance of individuals or roles to the overall throughput.

It would be interesting to see how Dan’s research ties into the theory of constraints methodology.

Related posts:

1. CRM does not improve sales performance Dave Hurlbrink writes how conventional CRM or SFA applications are...
2. Sales performance tracking in solution-driven enterprises Sales cycles of solution-driven enterprises tend to be longer and...
3. Characteristics of Evolving Enterprises Open distributed enterprises commonly exhibit certain key characteristics, which are...

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 requires 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 departments 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 utlized 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 independant, 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 independant, low-cost lead qualification and nurturing process

Lead Qualification and Nurturing Process

By having an independant 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 behaviour 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 paperts 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 independant lead qualification process that utilizes a 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.

Related posts:

1. B2B Marketing – a four-point transformation strategy Laura Ramos – VP, Principal Analyst at Forrester Research focuses...
2. Challenges in scaling up sales Are you facing these challenges in scaling up your sales...
3. Communication Problems are actually Process Design Problems When working in teams, small slip-ups and sometimes big goof-ups...

This could be a good guideline for Reach1to1’s own policies.

[Found via Techcrunch]

Related posts:

1. Employee Engagement – a Towers Perrin study Towers Perrin is a global professional services firm that helps...
2. Leveraging the Web – How to get your web site to work for you! A presentation made to a group of enterpreneurs to highlight...
3. Expense Claims Workflow Companies having a team that is distributed across multiple locations,...

Justin Roff-Marsh, proponent of his highly effective Sales Process Engineering methodology that incorporates the techniques from Theory of Constraints into the sales process – has written an excellent article on his Sales Process Engineering blog, where he explains “Why the term ‘communication problem’ insults your team members and retards the performance of your organization“.

Justin claims that humans are remarkably good communicators as compared to other creatures, and have proven their ability to communicate effectively in complex environments that have very small margins for errors, such as operating theatres or airport traffic control. Hence, justifying errors as communication problems prevents us from investigating and resolving the root cause.

Process design is the real problem

As he says,

In my experience, almost all the issues that are conveniently classified as communication problems are actually process design problems. And, in most cases, the problem is that a hand-off is necessitating the transfer of complex information from one person to another.

He gives the example of a sales process for a built-to-order product or service. Here, a sales person interacts with the customer initially to understand the requirements, and then hands-off the specifications to production. The errors resulting in such a situation is due to the need to transfer complex information between the sales person and production.

The proposed solution

In such cases, it’s important to recognize that complex information (almost by definition) cannot be transferred from one team member to another without information loss. Therefore, it is incumbent upon management to redesign the process so as to ensure that either:

1. These hand-offs are eliminated
2. The requirement to transfer complex information is eliminated

For the first approach, he suggests introducing a third person such as a project manager, who partners with the sales person and later provides the specifications to production, thereby providing continuity in the process and eliminating the hand-off.

For the second approach, he suggests that complex information should be converted in the form of easily quantifiable conditions which need to be satisfied. This implies that one can conver the complex information into a set of measurable parameters which can be evaluated to meet some prescribed conditions.

Milestones and Forms

In the On2Biz workflow model, the sales workflow is modelled as a sequence of milestones, where each milestone is a verifiable intermediate outcome in the process. The following diagram illustrates a sales workflow, with various individual projects at various stages of completion.

Sample Sales Workflow

Each milestone can be assigned to a different person in the team. The following workflow chart illustrates the role assignment and workflow rules:

Sales Workflow Chart

As illustrated above, On2Biz automatically generates alerts wherever there is a hand-off from one person to another. In addition, On2Biz has a provision to attach a customizable form to each milestone. The form can contain parameters that capture any complex information along with validation, ensuring that no important information gets lost during hand-offs.

The following screenshot shows milestones from an actual workflow implemented in On2Biz:

Milestones with customized forms to capture information

As seen above, each milestone has additional information captured in the format specific to that milestone. For example, the first three milestones are completed by Jacob and Sanjay, who are the tele-sales and field sales executives respectively. If converted, they hand-off the project to Misha, the accounts person. At the converted milestone, they fill in the form containing the required information for accounts to carry forward the project seamlessly. Further, Misha hands-off the project to Kavita, the creative team member, but ensures that all payment details are filled in the cheque banked milestone.

This illustrates how, by creating a properly documented workflow, the errors that can creep up due to hand-off of complex information can be avoided as per Justin’s recommendation.

For more information on the On2Biz Workflow Model, visit http://on2.biz

Related posts:

1. Expense Claims Workflow Companies having a team that is distributed across multiple locations,...
2. Sales performance tracking in solution-driven enterprises Sales cycles of solution-driven enterprises tend to be longer and...
3. CRM does not improve sales performance Dave Hurlbrink writes how conventional CRM or SFA applications are...

His presentation titled Web Content Strategy – How to Plan for, Create and Publish Online Content for Maximum ROI on slideshare contains concise and powerful hints on planning your web content strategy.

Some salient points from the presentation:

What is content strategy?

• Content strategy is planning for the creation of useful, usable content.
• Not just WHAT you’re going to publish and WHERE, but WHY.
• Content strategy isn’t just deciding what you’re going to include. It’s deciding what you’re going to leave out.

Website Foundation

• What are my business objectives?
• What are my users’ (customers’) goals?
• Any content that doesn’t meet these needs is just getting in the way.
• Avoid wasting money on designing, creating and maintaining unnecessary content.
• Keep project teams aligned throughout the process.

Website Content Strategy

• What content do we want to create, and why?
• How are we going to create it?
• What will happen to it once it goes up on the site?
• Plan strategically for required content, scope realistically, then scale according to time and budget.

Website Content Strategy: Content Audit

• Possibly the most important thing you can do to avoid scope creep and minimize risk
• Catalog web pages, print materials, all communications
• Conduct a gap analysis
• Don’t commit to content you can’t create or maintain

Content Specifications and Creation

• Get real-world content specifications as early as possible
• Identify who is responsible for providing, reviewing, and approving the content before writing begins
• Train or hire web writers … it’s a very, very different process and medium from print
• Keep the content audit up-to-date to eliminate redundant workflows among various communicators
• Ensure quality and quantity control, informed by clear recommendations and overseen by dedicated resources

Business Impact of a Content Strategy

• QUALITATIVE
  • Engages all stakeholders early in the website project process to ensure alignment, investment, and accountability around content creation and maintenance
  • Provides accessible documentation for all project team members to help judge proposed content effectiveness with regard to business objectives and user goals
  • Results in higher quality content, which improves customer satisfaction, sales leads, online service and support, trust in brand, and so on
  • Creates true content accountability for all project members early in the process
  • Facilitates future state content planning (editorial oversight, expansion, maintenance
• QUANTITATIVE (anecdotal)
  • Projects driven by web content strategies are completed in up to 25% less time than design-centered projects
  • Assuming stakeholders and business requirements remain the same, scope changes during content creation phase happen less than 10% of the time
  • Client satisfaction with final product is close to 100%
  • Measurable project objectives are realized within 3-6 months post-launch (with appropriate supporting communications)

Do not miss the opportunity to download his free eBook titled “Seven Content Strategies to Build Trust with Today’s Savvy Consumers”

Related posts:

1. B2B Marketing – a four-point transformation strategy Laura Ramos – VP, Principal Analyst at Forrester Research focuses...
2. Leveraging the Web – How to get your web site to work for you! A presentation made to a group of enterpreneurs to highlight...
3. Why software projects fail – and how we make them work Software development projects have a high risk of failure. A...

Transcript:

1. Leveraging the Web A presentation by Reach1to1 Technologies (P) Ltd.
2. Web Site Strategy Target Audience ● Business Objectives ● Design Requirements ● Content Management ● Site Promotion ● Performance Measurement ● Site Examples ● Questions & Answers ●
3. Target Audience General public ● Visitors with service-able requirements ● Visitors with current requirements ● Current customers ● Share holders and investors ● Current Employees ● Prospective Employees ● Competitors ●
4. Business Objectives General Public ● Establish corporate identity – Position the company and its services –
5. Business Objectives Visitors with service-able requirements ● Establish corporate identity – Position the company and its services – Identify possible services – Establish credibility to deliver solutions –
6. Business Objectives Visitors with current requirements ● Establish corporate identity – Position the company and its services – Identify possible services – Establish credibility to deliver solutions – Identify specific requirements – Establish specific solution –
7. Business Objectives Current Customers ● Establish corporate identity – Position the company and its services – Identify possible services – Establish credibility to deliver solutions – Identify new requirements – Establish new solutions – Online services (order tracking, support) –
8. Business Objectives Share-holders and investors ● Establish corporate identity – Position the company and its services – Establish financial stability and performance – Project business growth potential –
9. Business Objectives Current Employees ● Establish corporate identity – Position the company and its services – Establish financial stability and performance – Project business growth potential – Update about news and events – Educate about products and services –
10. Business Objectives Prospective Employees ● Establish corporate identity – Position the company and its services – Establish financial stability and performance – Project business growth potential – Show career opportunities – Provide mechanism to apply online –
11. Business Objectives Competitors ● Establish corporate identity – Position the company and its services – Attract skilled personnel from competitors – Establish position of leadership in chosen – areas Role model to follow for best practices –
12. General Design Requirements Simple, elegant design ● Fast loading pages ● Easy navigation structure ● Direct search facility ● Layered information ● Continuously updated ●
13. Content Management Web site is not a one-time project ● Update regularly to maintain position of ● leadership Updates should be done by internal staff, ● without requiring web design skills Let everyone contribute, moderated by an ● editorial team Create an internal process for content ● management as an extension of current responsibilities
14. Site Promotion Where do we get visitors from? ● Search Engines – Online Marketing – Corporate communications (emails, letters) – Events – Press coverage –
15. Site Promotion Search Engine Ranking ● Depends on content – Frequency and relevancy of content – Specific reference to terms that visitors are – looking for Site uses search-engine friendly hyper-text – tags RSS Compatible – provides pre-indexed site – and page-wise information
16. Site Promotion Online Marketing ● Email newsletter – Cross links with other web sites – Online advertising – Articles on other sites –
17. Site Promotion Corporate Communications ● Every employee, customer, supplier and – partner is a referral point They need to know about your web site – Email signature to contain link to web site – Letter heads and visiting cards – Company brochures –
18. Site Promotion Events ● Exhibitions and forums – Web site kiosks – Sponsorships – Technical and Industry Seminars –
19. Site Promotion Press Coverage ● Online press releases – Interviews – News articles – Magazine features – Advertisements –
20. Performance Measurement Site objectives to be measured by ● performance metrics Number of visitors – Number of subscribers – Number of leads generated – Number of updates – Page-wise statistics – Navigation path statistics – Search engine keywords – Reference site from which links received –
21. Example – Products APW President Systems Ltd ● Manufacturer of Technology Products – Market Leader in Enclosure systems – Initial content and design by Reach1to1 – Web site managed by in-house team with – assistance from Reach1to1 High level of employee participation – Regular updates –
22. Example – Services Epitome Global Services Ltd. ● KPO Services for Asset Management Industry – Established by reputed businessmen – Web site used as primary sales tool – Initial design provided by Reach1to1 – Web site managed by in-house team with – assistance from Reach1to1 High level of employee participation – Regular updates –
23. Questions to Answer Whom do we want to target? ● What do we want to achieve? ● What information is currently available? ● Who can participate in the project? ● What is the time line? ● What is the budget? ● What do we do next? ●
24. More information at http://www.reach1to1.com

Related posts:

1. Why software projects fail – and how we make them work Software development projects have a high risk of failure. A...
2. Making LIMS Work LIMS - Laboratory Information Management Systems - specialized applications for...
3. Web Content Strategy – How to Plan for, Create and Publish Online Content for Maximum ROI Joe Pulizzi, a thought leader, speaker, writer and evangelist for...