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Establish an Agreed-Upon Lead Definition (AULD)

Part 1 in a series on 12-Point Prospect-Experience Transformation

By Dan McDade

If you’ve never seen the interaction between a young Jack Lemmon and younger Alec Baldwin in the 1992 movie classic, Glengarry Glenn Ross, click and watch it (although be forewarned, it’s laced with profanity).

The clip depicts a classic reaction to leads provided by marketing. Lemmon states: “The leads are weak.” Does Jack Lemmon remind you of anyone in your organization? 

Unfortunately, the themes in this dark movie are still common in marketing and sales organizations today. Most of you reading this have witnessed the finger pointing: Marketing complains that “no one follows up on our leads,” while sales replies, “that’s because they’re not any good.”

Why’s this the case? While there are many contributing factors, in my experience this discord between marketing and sales is driven by lack of an agreed-upon definition of a lead, which I call AULD. When marketing has one definition of a lead and sales has another, the groups work against each other, waste time and money—and the competition wins.

Getting agreement as to what constitutes a lead is the first step toward enhancing the prospect experience. Making sure everyone is on the same page is critical to your organization’s ability to convert every lead it should.

The first thing I ask my clients—I call them marketing champions because they’ve realized the importance of optimizing their prospect experience—is to do an informal survey. I suggest they ask a handful of sales folks what constitutes an ideal lead. Then to check in with the marketing team with the same question. And finally to poll the c-suite.

These CMOs are quite often surprised at the range of answers they get. If the industry, decision-maker role, size of company, environment (technical or otherwise) do not match, work needs to be done to get everyone on the same page with an agreed-upon lead definition (AULD).

One CMO’s effort to please sales

Before I go on to … let me tell you a story. A few years ago, I consulted with a team at a large ISP and suggested the CMO offer the CSO options on spending $100,000 to generate leads. The CMO liked the idea because he was so frustrated about the fact that sales did not value any leads generated by marketing.

Here are the options:

  1. 200,000 targeted contacts (name and title) in the right verticals (no email addresses);

  2. 100,000 companies with up to three executive contacts in the right companies (no email addresses);

  3. 20,000 companies with multiple contacts and verified technical environment information in the right companies (no email addresses);

  4. 4,319 contacts who downloaded a white paper who may or may not be in targeted companies or have any need or authority to buy (email addresses, many bogus, no company firmographics and no telephone numbers);

  5. 117 appointments with people in the right companies who may or may not have any need or authority to buy;

  6. 81 highly qualified sales opportunities with the right decision-maker(s) with a need backed by some form of compelling event and complete contact information.

The CMO was trying to make a point with his offer: He was happy to provide sales with whatever they would accept and act on. While he hoped the CSO would recognize the value of option #6, he suspected that even these highly qualified sales opportunities would be treated as if they were random contact names (option #1) and the $100,000 would be wasted.

As it turned out the CSO selected option #3. As predicted by the CMO, even though these “leads” were better than option #1, they weren’t qualified enough to warrant follow up. Sure enough, no one from sales pursued the leads and the CSO was out the door in six months. We’re talking about an entrenched dynamic that’s hard to break.

So what is a lead?

That is the million dollar question. Any one of the six options above, in someone’s mind, could be considered a lead source. Some might think a name on a purchased list is a lead. Others, like the CSO in the real-life example above, consider multiple contacts and verified technical environment information in the right company a lead.

Realistically, a lead is a qualified decision-maker with a need backed by some form of compelling event and complete contact information (option #6).

If you think about it, it’s easy to understand why sales people resent following up on unfiltered, unqualified, raw (so-called) leads. And it’s not such a stretch to see why they’re eventually conditioned to ignore all leads sent by marketing—even when the quality of a particular source of leads is high.

How to break the cycle

To remedy the situation requires sales and marketing to get in agreement on what constitutes a lead. An agreed-upon lead definition (AULD) puts a stop to the finger pointing that costs organizations time, money and market share.

By working on an agreed-upon lead definition, sales and marketing align themselves for the good of the organization.

  • If marketing delivers only leads that meet agreed-upon criteria surrounding target, company and need …

  • … then sales will follow up on them promptly—and report on their progress.

This, of course, won’t happen without rules and intervention.

In my business as a prospect-experience consultant, I work with clients to conduct AULD workshops with key stakeholders, including relevant marketing and sales people and c-level management. It’s critical for c-level management to be involved because if just marketing and sales are involved you’re asking them to find a solution to a problem they’ve never been able to solve before and won’t solve in the future without some outside help.

At the highest level, the agreed-upon lead definition (AULD) must include answers to questions around what I call the 3 Ps and an E:

  • Pain. What specific need (for example, outdated technology that is causing the company to fail to offer capabilities that competitors offer) must the target have to be considered a lead?

  • Priority. What compelling event (for example, a compliance issue such as GDPR or a solution that makes the company more competitive) causes the priority of fixing a pain to be sooner rather than later?

  • Process. Once the pain and priority are established, who will be involved in an evaluation, what roles will they play and how does the company go about establishing a budget for this kind of purchase?

  • Environment. What characteristic of the target’s organization must be present or absent (examples include incumbent technology in place, or bias against outsourcing)?

While 3 Ps and an E are broad objectives in qualifying a prospect, there are additional elements that should go into defining a lead:

  1. Vertical(s) (SIC or NAICS code)

  2. Firmographics (revenue, number of employees, number of locations, etc.)

  3. Decision makers/influencers and respective roles in the decision-making process

  4. Environment (related to each solution, such as "technical environment")

  5. Decision maker level of engagement (engaged, referral but in the loop, etc.)

  6. Business issues/pains uncovered and validated

  7. Decision making process documented

  8. Budget allocated or process for establishing a budget documented

  9. Competitive landscape documented

  10. Sense of urgency or compelling event

These elements will help you home in on highly qualified opportunities and allow you to focus on positioning your product or services early in buying process so that you can beat the competition and, hopefully, define the evaluation rather than simply responding to it.

Without an AULD (agreed upon lead definition), you end up with:

  • Forecasts that are thin and inaccurate.

  • No closed loop to measure the effectiveness of marketing programs.

  • No consensus regarding marketing and sales strategy, including the market, media and offer (M2O).

Since no company can survive with a weak forecast, lack of accountability and consensus, senior executives in any size company have to fix the problem:

  1. Establish an AULD (agreed to by marketing, sales and c-level management) and not based on BANT (budget, authority, need, time frame) or ANUM (authority, need, urgency, money). Why this caveat? These alphabet-soup formulas for lead definition oversimplify the qualification process for a complex sale and lead to disqualification of prospects for the wrong reasons. Disqualifying prospects due to the lack of budget and time frame or urgency and money is a mistake: Waiting for these criteria cause you to show up too late for an evaluation that has more than likely already been won by a more agile competitor.

  2. Establish an unbiased review team to examine every lead that is not proactively accepted or is proactively rejected by sales and fix what is broken. This is what I call the judicial branch.

Implementing a judicial branch

Once a company has ground rules (an AULD), it needs to identify an objective committee to keep marketing and sales honest. Here’s where an authority I call the judicial branch comes into play.

The judicial branch is comprised of senior-level sales and marketing executives. The CEO (or at least one c-level manager, even the CFO) should be a member as well.

This body reviews every lead that sales ignores or proactively rejects (i.e. sends back to marketing) to determine whether the rejection was valid. They make an objective call on whether or not the lead fit the agreed-upon definition.

Using this system promotes accountability within both organizations. If your salespeople know they’ll need to justify their decision to reject a lead, they’re far less likely to throw in the towel because of laziness, gut reaction, or because the prospect wasn’t immediately ready to buy. And if your marketers know the quality of their leads will be inspected, they’re probably not going to fill the pipeline with low-quality leads simply to meet their quota.

It’s important to point out the judicial branch doesn’t exist to assign blame. This branch exists to figure out where the problem is, so you can take the appropriate measures to improve the process (including ongoing evaluation and re-evaluation of the agreed-upon definition of a lead).

Common lead generation challenges

Let’s say most of the time the judicial branch decides sales was right to reject the lead. That suggests marketing isn’t doing its job, or that your lead criteria excludes too many potential prospects. Continue to tweak the model until you feel you have optimized at least the following KPIs:

  • Marketing leads accepted by sales should be over 80%.

  • Marketing leads that become sales qualified leads should be over 50%.

  • Sales qualified leads closed by sales, depending on the product or service, should be 20% to 30%.

If your sales team uses a formula like BANT (budget, authority, need, time frame), for example, they are over-qualifying leads, or more accurately disqualifying what could be some of your best opportunities. Suppose a salesperson is talking to a decision maker who has an addressable problem—but no budget or time frame. The salesperson could be technically justified in rejecting this lead. However, the decision maker knows that solving the problem is a priority and they have defined the process for creating a budget and your solution is a good fit for their environment. Waiting until there is a budget and a specific time frame will allow a more agile competitor to get a foothold into the account and win the business. If you yield this opportunity to a competitor, the best you can hope for is to be column fodder when the evaluation actually takes place—and you will have lost the business before you even started competing for it.

Mike Weinberg, author of "New Sales. Simplified.: The Essential Handbook for Prospecting and New Business Development," says one of the most common reasons leads go to waste is because the sales team didn’t perform proper follow-up. It’s extremely rare to hear back from prospects after a single touch. Salespeople must earn the right to a callback or email response. The judicial branch should analyze how persistent the rep was, in other words, how many times she tried to follow up. The group should also evaluate the quality of her efforts, i.e. her ability to vary her outreach methods and provide value at every touch.

Logistics

Reaching agreement on AULD and putting together the judicial branch requires a significant amount of time and energy from your senior executives—time and energy which, frankly, they might not have.

If that’s the case, modify the approach. You cannot operate without an AULD, but rather than having the judicial branch review every lead that’s been sent back or passed over, have them look at a random selection of rejected leads every month.

This same group also needs to review funnel movement so that leads sent to sales don’t end up in the black hole called CRM. Gauge the effectiveness of the judicial branch by tracking the percentage of leads sales accepts. If the branch is doing its job, that number will climb and climb.

As Alec Baldwin says in Glengarry Glen Ross, “Coffee is for closers.”

So get to work and earn a cup. It starts with the agreed-up definition of a lead.

Prospect-Experience is an advisory firm created to guide you through the process of improving your prospect experience and drive more revenue. This is part one in a 12-part series about the 12-Point Prospect-Experience Transformation.

Nancy JoyceComment