When I was starting my career as a technology analyst twenty years ago, our firm had a list of
500 industry executives we believed to be potential clients. Our primary marketing vehicle was
a monthly mailing, consisting of a hand-signed letter along with two thought leadership pieces.
Every envelope was hand-stuffed, and we often wrote personal notes before sealing the end
flap. Because each mailing was so labor intensive, we thought long and hard about who made
it on the list. Only individuals who we thought had a high chance of becoming a customer made
it. Our careful use of resources paid off – we never had a month where less than 5% of the list
converted to customers. The leads qualified through this simple mailing effort were of high value
to our sales efforts.
Today, mass emails through marketing automation engines have become the norm. But ask
yourself this question – if we have increased the quantity of outbound marketing touches by
tenfold or more, shouldn’t the number of closed sales from high-octane efforts also increase by
the same factor? If not, why? The typical answer is: “Yes, we may have had a slight drop off in
closure rates, but this is more than made up by an increase in volume.” However, some studies
suggest that up to 80% of leads generated by marketing are not acted upon by sales teams. A
marketing team that adopts a nonchalant attitude towards closure rates is blinded regarding a
more sinister truth.
Overall lead quality from marketing’s efforts has dropped alarmingly and in many cases these
rates have dropped below the Sales Attention Threshold– the minimum expected closure
rate required for sales to aggressively pursue leads passed over from the marketing group.
This phenomenon can be seen in the divergence between the blue line (Quantity of Outbound
Marketing Activity) and the red line, which depicts the expected closure rate (i.e. Quality) of
leads generated by marketing activities.
When lead quality breaches this threshold, sales professionals rapidly lose interest in pursuing
these leads. It is simply not worth their time. Unfortunately, many marketing groups seem to be
unaware of this phenomenon. This results in a disconnect between marketing’s expectations
and what really happens with the sales force, seen below. (For reference, I have left the lead
quality and quantity lines in dashed form.)
The green line represents the revenue directly attributed to leads passed from marketing to
sales. Marketing expects that any drop off in lead quality will be more than offset by a vast
increase in lead quantity, leading to an upward sloping and accelerating revenue curve. This
ignores a simple math fact that we all learned by the third grade: Zero multiplied by a million is
still zero. If sales refuses to even consider leads passed on from marketing – which is exactly
what happens when the Sales Attention Threshold is crossed – the resulting revenue quickly
decays.
The result, marketing professionals often pursue a strategy based on the philosophy that
more is better, blissfully unaware that they have dropped off the sales force’s radar screen.
In addition to losing the attention of sales teams, “spray and pray” outreach turns off many
potential future buyers.
It is time to face this dirty little secret high-volume marketing and work towards a solution.
Homework for Marketing
I have an assignment for those in marketing: It’s time to walk across the hall and strike up a
conversation with a living, breathing sales person. Marketers must understand what makes a
sales person tick. No marketing automation dashboard can tell you this. What you will find is
that a true sales person wakes up with only one thing on his or her mind – “Where can I get my
next order?” During this conversation, find out the minimum closure rate that sales requires to
pay attention to the leads you generate. Knowing this basic fact will start you back on the path
to being relevant to sales.