Nov 03 2012
Neil Rackham delivered the keynote address at this year’s national US Business Marketing Association meeting and is quoted in “BtoB Magazine” as follows: “Sales and marketing are two functions with an identical mission, so how can they be like ships passing in the night?”
In this post I am going to talk about solutions to this problem including:
BANT vs. real lead definition
3 Steps to Align Sales and Marketing
Why most sales processes are broken
BANT vs. real lead definition
In a recent survey, I asked sales people to define a qualified lead. Here are the results:
55% – BANT (Budget, Authority, Need, Timeframe)
32% – Buyer in target market, willing to talk
9% – Authority and Need (backed by trigger event)
3% – Contract in hand, press hard
While I was not entirely surprised by these results, I was a little disappointed. I am not a BANTaholic. Far from it! My argument against using BANT as criteria to qualify leads is that for most major purchases waiting until the “Budget” and “Timeframe” boxes are checked puts you in the position of entering a deal too late—or more likely not at all. Best case you will go through hoops to present column fodder to a decision-maker already aligned with another vendor. I had hoped that more of the market had caught up with me and my view on this but I guess not. Just sayin’.
Research that substantiates my position on BANT is from DemandGen Report: “73% of major purchases to be made in the following twelve months are not budgeted at the beginning of the period”. I think this fact is a major reason why senior executives do the Linda Blair head spin (from the 1973 horror film, “The Exorcist” for those too young to have seen it). On one hand they read that 70% or more of the sales process is done before a sales rep even gets involved. On the other hand they read that if you are not in a deal early enough to establish your position you are going to lose. If it is not already evident, I strongly agree with the side that suggests that you better get in early!
Why do sales people think they want BANT qualified leads? Mostly it is because they have been conditioned to expect poor quality leads—often working 100 leads to find 3 – 7 real opportunities (the chances of good sales people doing this is between slim and none). While BANT may sound like a great way to qualify leads, the reality is that if you wait until 70% of the buying process is completed before you engage a prospect—you’re toast.
As my industry friend Carlos Hidalgo (Annuitas Group) noted in a recent blog: “In a recent study, only 29% of B2B buyers said they “always” supply accurate information on custom questions on a web form. This means that 7 in 10 are lying about that information and that includes BANT. By requiring BANT in the early stages of the qualification process, you are inducing false-positives and leaving the buyers no choice but to provide information that is inaccurate. It is no wonder why Tony Jaros of SiriusDecisions stated, “BANT contains the four most dangerous letters in B2B marketing.”
I recommend that you use Authority and Need (with the need being backed by some form of compelling event) to qualify a lead. Here is the complete list (and not each criterion is necessary for every company):
- Industry (SIC or NAICS)
- Firmographics (such as revenue, number of employees, number of locations)
- Authority (can be decision influencer or coach)
- Engagement of Authority (not the receptionist in most cases)
- Pain or need identified AND validated
- Decision making PROCESS identified (not specific to timeframe)
- PROCESS for budgeting uncovered (not a budgeted amount)
- Competitive landscape documented
- Sense of urgency or a compelling event exists
“Point C: From Chaos to Kickass – 3 Steps to Align Sales and Marketing”
In a white paper called Point C: From Chaos to Kickass – 3 Steps to Sales and Marketing Optimization I provide detailed solutions including (feel free to download the free white paper):
- Define the market, lead definition and message
- Measure what matters
- Provide your sales force with fewer, but better leads
Doing a better job of execution on just these three steps would fix about 75% of the alignment problems between marketing and sales. For example:
Ask three marketers and three sales executives in the same company to define a qualified lead and you will likely hear six different answers. Market definition and on-target messages are just as flawed. If companies measured and then managed to minimize the fall-off in leads between marketing qualification (to the extent there is any) to sales accepted and then again from sales accepted to sales qualified (forecast), “lead purgatory” problems would disappear. Lastly, sales’ does not really need more leads. They need fewer, more qualified (and in many cases effectively nurtured) leads. In fact the white paper Why Your Sales Force Needs Fewer Leads goes into more detail than the “Chaos” article if you are interested. It is also free.
Why most sales processes are broken
There is one more element of the marketing and sales process that needs fixing; and while my approach to this may seem overly simplistic, I swear it works. Marketing and sales need to accomplish the following to make a sale (and in most cases when they don’t take a prospect through these steps they are not going to win business):
- Find a pain or need.
- Get agreement that there is a pain or need.
- Get agreement to do something about the pain or need.
- Get agreement on a generic solution.
- Get agreement on a customized, specific solution.
The problem is that marketers think their job starts and ends with #1, while sales executives start at #5. I don’t think the solution to this is as easy as telling marketing that they have to take care of steps 1 – 3 and then tell sales they are responsible for steps 4 – 5 (though that would produce better outcomes than what happens now).
The solution is the hybrid function many leading companies have put in place (either internally or by outsourcing it)—inside sales support. One client’s marketing department used to dump thousands of leads on its sales force each year when less than 2% of those leads were even remotely qualified. What a waste: Spending tens of thousands of dollars to generate leads that get sent to sales and go into a black hole. The bias toward inbound leads in this particular case is a story for another day. However, to summarize, a company that drives inbound leads should expect results that are greater than so-called cold, outbound leads, right? In reality, many companies are paying a premium for inbound leads only to find that they qualify at a lower rate than smart, targeted, proactive outbound lead generation, qualification and nurturing. My point here is at least measure the cost of leads that hit the forecast—don’t just keep pouring leads into the sales force that have no chance of closing.
For sales reps to have time to work through an effective sales process, they need to have the time to do so. If you are asking your team to spend the majority of their time qualifying raw, unfiltered leads, your results are not going to be very good.
- Don’t use BANT!
- Get everyone in agreement about the definition of a lead. Establish a “legislative branch” to evaluate the effectiveness of lead follow-up AND to police why leads are being passed back as not qualified.
- Measure how leads are moving from marketing to sales accepted to sales qualified to close. Right now, there is a good chance you don’t know these metrics and they are critical.
- Provide your sales force with fewer, more qualified leads.
- Install a sales process that works. No more marketing starts and stops at #1 and sales starts and stops at #5.
I invite your comments.
Dan McDade is a recognized thought leader in lead generation, qualification and nurturing. As president and CEO of PointClear, the author of the book The Truth About Leads, a contributor to numerous publications, and a frequent speaker and blogger, he’s spent the past 20+ years helping B2B companies optimize sales and marketing processes. Check out his award-winning blog-ViewPoint.
Dan is also a finalist (again) in this year’s “50 Most Influential People in Sales Lead Management” contest and would really appreciate your vote HERE