Let’s talk about leads, Baby

(Let’s generate cash money)

Stop trying to get your sales closers to generate leads for your business. We’re not very good at it. And it really doesn’t work in the long run. 

It’s a given that every business wants to increase their revenue and grow faster, and one of the most commonly quoted reasons why this isn’t happening, is the lack of good quality leads. In fact, in some stats published by Marketo, we see that companies with a mature lead generation strategy outperform their less mature competitors by up to 174%. And yet many companies focus on bringing in salespeople with a contact list vs building sustainable lead gen operations. 

The truth is, so many businesses I talk to still rely on their sales people to do outbound prospecting, and then get frustrated when they don’t see predictable results. Worse still, are the job ads I constantly see on LinkedIn looking to hire salespeople specifically for their network of contacts, which is incredibly short-sighted. Ignoring the fact that this person’s network may already be tired of this person constantly trying to sell them stuff from all the previous companies they have worked at, these “leads” may not align with your good fit criteria. At best, you’re hiring someone with a finite list of leads that will run out within a quarter or two in the job, and at worst you won’t even get that. 

A better approach would be to set up a scalable and repeatable process that ensures your sales teams have everything they need to deliver on their value creation targets. This isn’t a new or original idea by the way. One of the most popular books on the topic is ‘Predictable Revenue’ by Aaron Ross, it's well worth a read! One of the core concepts of the book is that building a high performing modern sales organization requires specialization. Lead gen specialists probably don’t have the experience to negotiate and close deals, and closers are typically not very effective at lead gen. Ross even suggests that as soon as you have two salespeople in your company, you should be thinking about specializing their roles. Hiring an expensive, experienced salesperson who can negotiate and close complex deals and then using them for cold calling is not a sustainable way to scale your business, or the best use of your cash. 

Predictable Value Creation

I talked previously about how we need to start thinking of sales as value creation, not just revenue generation. So how do we apply a consistent process to this, similar to the ‘Predictable Revenue’ model in Ross’ book? Well, no surprises here, it starts with the customer fit criteria. 

Step 1 

Let’s say you have a team of three sales people. One for lead gen (commonly referred to as a Sales Development Representative or SDR), one closer (Business Development Manager or BDM), and one for managing and growing your existing clients (Customer Success). You want this team focused on acquiring and growing high value clients as defined by your customer fit criteria. So, the first thing to make sure of, is that they all have a clear understanding of this criteria and can apply it to the customer conversations they have. 

Step 2

Next up, is to make sure that your incentive scheme for the sales team encourages them to focus on the high value customers. I won’t go into a lot of detail on this here, as I plan to cover this in a dedicated post around incentive plans. Suffice it to say that this should take a holistic view of the customer lifecycle, all the way from initial targeting, through to acquisition and ongoing customer success. It should also align with the incentive plans in place for the rest of your business as well. Like I said, there is a lot to unpack here so we can get into the topic more in a future article. 

Step 3

In my last post, I talked about how to define your customers in terms of a value metric. Now that we have this, we can start applying it in useful ways in our sales process. The particulars in how you do this will vary depending on your business, but an example would be moving customers through a funnel based on a weighted value metric, rather than a weighted revenue metric. I.e. when a prospect hits a certain weighted value metric, marketing hands the lead to the SDR for further qualification. After they reach another defined value metric, the SDR hands it to the BDM and so on. If you get this right, you will find that it's not always the biggest revenue deals that gets the most attention. It should be the most valuable customers that get the highest focus. Don’t worry though, the big dollar value deals will still get the right level of attention, as long as they also meet your other value criteria. 

This is just a quick example of how we can take the value creation concept and apply it to a sales process such as lead managemet. The specifics of how you do this will depend on your business and sales process, such as the complexity of your solution and the customer engagement required to sell it. However, one factor that is consistent across almost all businesses, is that you need to make it easy for your customers to buy from you. I’m going to be taking a look at this in my next post around creating a frictionless sales funnel, so make sure to subscribe below if you haven’t already! Or if you’d like to discuss how any of this would apply to your specific business, please get in touch right here.