The Sales and Marketing process- in the dark ages
Sales and marketing is sometimes deemed “Part Art, Part Science”. There seems to be little science - particulalry in the sales and marketing processes, and they have not kept up with processes in other parts of a business.
Imagine a car company - they make cars on a production line, same way each time. Or look at the way a jet engine is made - each step mapped out, checked, validated and measured. These environments have long and mature tool-sets like Six Sigma and Lean to help them monitor and improve processes.
Take a look at the sales and marketing processes of those same companies and you’ll find limited processes, limited measurement, little validation and a new way to do something for each campaign. Why?
Why is marketing’s lead generation, lead development and handover to sales not a better, more repeatable and predicatble process? I think we need to take a look at how we can create a steady stream of leads to sales, that takes advantage of modern automation and the 1:1 relationship skills of sales.
Comments most welcome.
Couldnt agree more…some companies marketing strategies are exactly the same as they were 10 years ago…they have moved on from what they “used” to do and feel comfortable with..
Comment by Sally-Anne Gerull — March 10, 2010 @ 12:59 am
Thanks Sally-Anne - seems many are running with ‘rules of thumb’ like a pipeline of 3 times revenue.
Leighton
Comment by lj — March 10, 2010 @ 1:15 am
Leighton, good points.
I think the answer is measuring direct ROI, in most cases.
When you change a manufacturing process, you can measure your return on/of investment pretty much straight away. Improving the process, making more widgets in a shorter time, using less material, avoiding or minimizing waste - all very easy and relatively cheaply measured factors.
Improving a sales process, or a marketing process, is a lot harder to quantify.
For example:
1. Introducing a CRM package- it can take 3-5 years, with a lot of training, a large investment in the system, sometime hardware, etc. Sure, Sales people can become more effective in time management, managing the sales funnels, etc. Can you see improvement in the sales figures straight away and tie it directly to the new system? No.
2. Re designing a website - Costly, lengthy process for many organizations. Sure, it’s a great marketing tool - builds online credibility, provides value to customers and prospects, and can even raise engagement level (sales inquiries, general inquiries, and even complaints!) with the public. Can you measure the exact level of ROI on the overall revenue? Very difficult.
There is a lot of time, money and trial-and-error involved in sales and marketing processes. Measuring outcome is heavy on resources (additional people and money).
The people in charge of the funds in a business, are traditionally very ROI sensitive. L&D, Marketing and Sales are areas where ROI of certain activities are long term and capital-heavy.
It is difficult to release funds now for future (and not always quantifiable) result.
Comment by Raz Chorev — March 10, 2010 @ 1:29 am
Raz
You are so right - CRM promised so much but seems to have become a data repository rather than an information source. Maybe with the move to SaaS platforms the big bang, big promise method will go away.
I’m thinking that marketing automation suites should not begin to tie the CRM and the Website elements together - so that you can more clearly understand behaviour and intent by tracking individuals. Improving and understanding valuable content tied together with trigger responses to behaviour will pull it together.
Doing this small scale, in a test environment with Saas will be the way forward.
Thanks for your input - Leighton
Comment by lj — March 10, 2010 @ 5:40 am
A Masters degree in Financial Management provided me with the skills to measure the ROI of many sales and marketing activities when I was CSO/CMO of a few high-tech companies. I found that managing the lead generation process is quite difficult. Measuring the closing rates of leads handed over to the sales force is easier, as is measuring the revenues produced by those leads.
Determining the actual marketing cost per sale is next to impossible. Thus, just as in manufacturing where overhead expenses are allocated per unit sold, marketing expenses are typically allocated the same way. That data is of little value for optimizing marketing ops.
One of the most difficult things to measure is the productivity of each step of the sales process. The reason is that very few companies have accurately define the sales processes of their best sales people well enough for their salespeople to use it. It is not that it can not be done. It is because most of the best salespeople can not accurately explain how they sell. The obvious answer is to observe them in action. However, there are very few consultants who are skilled at observational research.
Though it seldom happens, CRM systems can quickly increase ROI. Again, it depends on the business processes that the CRM system is programmed to manage. Most companies have documented and installed sales processes that DO NOT accurately specify the sales practices of their best salespeople. Thus, the age old problem of garbage-in/garbage-out sabotages the implementation of CRM.
Comment by Jacques Werth — March 15, 2010 @ 5:36 am
Leighton
Right on .. But i think the element here is on producing quality “qualified” leads that Sales will accept.
This approach on quality leads with explicit handshakes with the sales teams - which can be turned into an organisational dicipline over time - should then go someway towards creating a virtuous cycle that sales and marketing see as mutually beneficial..
The big challenge here is getting people to lead the whole Sales and marketing operation model - and there lies the greatest challenge (skill, mindset and aptitude wise)
Cheers
Simon
Comment by Simon J — March 15, 2010 @ 8:43 am
Jacques - thanks for your comments.
I think you are correct there seems to be some mystique to how good sales people go about their work and rules of thumb like ‘we need three times budget in the pipeline to meet that budget’ have worked well. But I think that times are changing and we may need to improve some metrics to get some better controls in place.
Simple waterfalls are a good start and as we build IP we will learn more about controlling our revenue stream.
Comment by lj — March 15, 2010 @ 5:43 pm
Simon
I heard about a vendor ’sales handover’ process where it was not a handshake, but a ceremony! The lead came with ribbon and the cost of the lead - and sales then accepted it and treated it as something important and expensive.
Sounds cool - Leighton
Comment by lj — March 15, 2010 @ 5:45 pm