How To Predict Conversion Rates From Lead to Close With an ‘Exit Criteria’

by contributor on May 22, 2013 in Lead Quality

Editor’s Note: Today’s blog comes courtesy of Jeff Hoffman, the author of Your Sales MBA™, “Why You? Why You Now?™”, and The Seven Basho Strategies™ sales training programs.

The Founder of Basho and M.J. Hoffman and Associates, Jeff has leveraged his 20+ years experience inspiring sales executives at companies like Google and Akamai Technologies into an internationally recognized approach that promotes immediate results among even the most seasoned sales teams. Some of Jeff’s recent corporate engagements include Bank of America, British Telecomm, and Dow Jones.

This dynamic has always been the same: Marketing is frustrated by Sales not following up on their hard-won marketing qualified leads (MQLs), while sales complains that there aren’t enough “good” leads worthy of their attention. Sound familiar? Even the most sophisticated internal systems will often spur this debate.

So where is the problem?  Who is right?  And more importantly, how do we fix it?

The solution may lie in creating a more defining language for both Sales and Marketing.  I am not suggestion yet another re-definition of your company’s sales stages, but a different approach — one that asks a new question.  Not, “What characteristics define a potential buyer?”  But, “What activities may indicate an engaged buyer?

The truth is that the measurement linking lead to closed deal is precarious at best.  Far too many steps occur between those two moments to offer clarity and insight into our company’s “a typical deal.”  One look at the standard deviation between the average days in the sales cycle reveals this point.  Furthermore, the specific person that appears at the lead stage is rarely the person of influence, and almost never the actual signer of the contract.

Traditional lead scoring and buyer profiling is valuable to marketing, and sales stage definition is equally useful to sales.  The missing link between the two?  Something I call, “Exit Criteria.”  Specific, measurable actions by the prospect that indicate that they may be willing to “cross the chasm” from lead to sales opportunity.

Once a lead is scored (title, industry, customer history, lead source, etc.), we then attempt to measure the “health” of that lead dependent on their specific level of engagement.  Activity, like webinar registration and attendance, is captured. Participation in the same seminar (i.e. Q&A; polling) is a higher level of engagement, and advances the lead even more. And each of these activities becomes the requirement to “exit” the previous lead stage.

By making the prospect’s specific engagement the predominate determination for lead health, marketing can then create new types of campaigns that inspire the behavior that yield better leads.

Now sales takes over. The rep pounces on highly qualified deals that have momentum, and can use these same tactics marketing just used when reaching out to the prospect.  Knowing that action is the most important qualification for deal advancement, the rep continues to close for more activity. Will the prospect share an org chart? Or offer an executive- level referral?  If so, the prospect then “exits” the current stage, and enters the next one that is assigned a higher likelihood of closing.

The use of exit criteria can accomplish many goals. Marketing can focus on the close as part of their campaigns, and they can quickly measure the success of their lead generation efforts. Sales can leverage that activity to continue the closing process, and take the subjective nature out of their pipleline.  Both sides can enjoy a common language, and can collaborate on activities that appear to have the best results.  The secret is not in defining a shared scale for both sales and marketing to use, it is about creating a bridge that links our unique objective and mission.  And what better bridge than the customer.

“Happy Selling!”

 

 

 

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