Most companies are aware that revenue is of utmost importance to ensure growth and sustenance for the company. This is a 2 part post. Read the second part here
The two vital components of revenue are marketing and sales. Though most firms are well aware that marketing and sales functions are important aspects, very rarely do they look at marketing and sales as a capability not as an end goal for generating revenue. This article does not downplay the importance of sales and marketing goals, but it does show that companies with systems and procedures can sweep up more opportunities than those firms with random or incomplete processes with goals at the end.
Another aspect is that, at times, companies fail to understand the boundaries of marketing and boundaries of sales.This creates an overlap of tasks and activities thereby causing loss in effective revenue management. The separate tasks and activities of revenue management as part of marketing and sales are described next.
Sales and marketing process has a variety of tasks and activities that can be sequenced in a linear fashion. This process is quite generic and can be adopted to a variety of industries and categories of companies. The following sequence shows the overall process of a typical sales cycle:
A typical sales cycle
Target → Lead → Confirmed Information (Contact, Account, etc) → Opportunity Exists → Understanding the pain point → Proposal → Negotiation → Closing → Maintenance or Recycle
What are targets?
Targets are pieces of information about a person or a set of persons from a particular source of marketing activity. For example, if a company has conducted a seminar, then all the attendees of the seminar would be potential targets for future marketing activities. There is no potential impact on the marketing or sales activities if targets change or have incorrect data. Target are quickly changed, deleted or modified depending on the type of information that is obtained about the target. There could be additional activities done on targets such as data cleaning or a call centre based verification. In some cases email subscriptions are requested to ensure targets are real. The most cost effective method is used to ensure targets are cleaned and moved to the next stage of qualification.
A target is just the starting point to a more personalised communication to a person or a company.
The next stage of activity in the sequence is to convert a target to a lead.
What are leads?
Leads are targets that have been qualified based on an email confirmation or a phone call. Since leads have origins in the target list, their conversion depends on the campaign activity.
Each campaign activity may have different types of qualifications and therefore not all targets get converted into leads. Targets which do not get converted, may not be important for the current campaign. In some cases, a marketing campaign starts from existing leads, that were used before or were those that would never converted in previous campaigns.
The stage of leads in the sequence of marketing and sales activities represents the boundary between marketing and sales.
A lead has sufficient information about a person or a company to to have an effective communication. However a lead does not have all the information required to make it a sustainable data point for future interaction. This is because leads can appear as duplicates or may appear across different companies with different names.
Not all leads come from targets. Some are created directly in the system based on the Information that is received by the company. These created leads are sometimes created by the marketing department and in some cases done by the sales department. Usually the volume entries for new leads are done by marketing department and lead corrections and data scrubbing is done by the sales department.
The conversion from targets to leads, exposes a level of efficiency that the marketing campaigns are able to achieve.
Why is this lead necessary?
In most companies the sales department may feel that marketing departments waste a lot of budget with no direct return on investment. A marketing department can use the ratio of targets to leads conversion to show a clear value of the different marketing campaigns that were conducted.
Usually leads have the same data that is in the target and therefore, most sales and marketing tools are not able to distinguish unique leads within their system. In the next stage of activity, the leads are changed to a more static data point and hence duplicates can be identified more easily.
Now, as a company, we are quite sure that the customer exists and the person we are talking to exists. The information about the lead has a significant level of confirmation. The next stage of activity in the sequence is to convert a lead to a contact.