The Definitive Guide to Sales Lead Qualification and Sales Development
One of the best pieces of organizational wisdom I’ve ever received is to pay the most attention to “batons” that cross functions. Wherever two or more departments share ownership and responsibility, conditions are ripest for problems.
This is especially true in the handoff between marketing and sales. We’ve written a lot about this topic: even though Sales is from Mars and Marketing is from Venus, companies that leverage the virtuous cycle and practice the three truths behind sales and marketing alignment can bridge the gap and drive outsized revenue growth. Some of these best practices include common definitions for a qualified lead between marketing and sales; lead scoring to identify suspected quality leads; a strong lead management process to manage the handoffs; and the use of marketing automation to power the whole thing.
In addition to those techniques, I believe the secret to a truly high-performance revenue engine is the effective use of a Sales Development team. (Others refer to this group with different titles: Lead Qualification, Lead Generation, Business Development or even Inside Sales, though I don’t prefer that label since it incorrectly implies the group carries a revenue quota.)
Whatever their exact name, these Sales Development Representatives (SDRs) have one exclusive focus: to review, contact and qualify marketing-generated leads and deliver them to Sales Account Execs. Aaron Ross and Craig Rosenberg are two of the biggest advocates of having a separate sales development function. As Craig says, “The most successful lead generation/lead management programs have dedicated phone resources whose sole job in life is to take raw inquiries and qualify them before they are sent to sales.”
Put simply, SDRs pass the baton from marketing to sales.
Seven Ways that Sales Development Reps Drive Revenue
A Sales Development team can enhance revenues in the following ways:
- More consistent and better quality follow-up on leads = better conversion of leads into opportunities.Marketers live and die by whether their leads turn into opportunities. So when you have a qualified lead, you don’t want a sales rep to call once and leave a voicemail. You want someone whose sole job in life is to reach your leads, overcome objections, make sure they are a fit, and get them connected to sales teams. Craig Rosenberg illustrates this point with a story about two of his clients at Focus: Both get the same leads, but one passes the leads directly to sales while the other has an optimized lead qualification group. Can you guess which one converts only 5% of their leads and which converts 40%? (Answer: the client with a Sales Development team converts eight times the number of leads.)
- Faster lead response times = better conversion rates. When a lead submits an inquiry on your website, the faster the response the better. According to a Lead Response Management study, the magic number here is five minutes. A five-minute lead response means you’re four times more likely to qualify that lead than a 10 minute response, and a staggering 21 times more likely to convert than after 30-minute wait. SDRs can focus on this fast response time whereas it will never be a quota-carrying reps top priority to jump on an inbound lead.
- Better economics. You want your expensive salespeople closing business with qualified customers, not educating raw leads, talking to people who don’t want to talk to them, or worse, talking to tirekickers and other unqualified prospects. It makes much more sense to have low-cost SDRs talking to leads and passing just the right ones onto sales. When sales reps can focus on closing business with qualified decision makers, the economic gains are astounding. According to some industry rules-of-thumb: A 5% increase in selling time can yield a 20% increase in revenue, a 1% increase in pipeline value can yield a 25% increase in revenue, and a 15% decrease in the length of the sales cycle can yield a 30% increase in revenue.
- The human touch enhances lead nurturing. Whether or not leads are sales-ready, SDRs can nurture relationships with each interaction. By talking with more leads, you can offer personalized thought leadership and value around a lead’s individual pain points, and cultivate future demand. For best practices here, tune in for Marketo’s Revenue Masters Webinar on May 4.
- Superior data. It’s an all too common complaint that salespeople don’t update information about the leads in their CRM tool – but it’s much easier to have SDRs enter proper information. This means marketing gets better data accuracy and information they can use to optimize future lead generation efforts.
- Improved revenue cycle analytics. By adding a stage between marketing and sales, you’ll be able to track conversion rates and other key metrics in a more granular fashion. This means when problems arise, you can isolate causes and resolve them faster and with better follow-through than if you lump together the responsibilities of qualifying and closing leads.
- Talent development for sales. Your Sales Development reps can play an important role in your sales talent pipeline, effectively serving as your “farm team” for future quota carrying reps. This gives you the opportunity to bring on sales talent that already understands your business, is proven to work in your culture, and knows your processes and cadence on day one. In a world where one in three hires can prove to be misses, an SDR function can greatly reduce your hiring risk.
Develop a strategy that unites marketing and sales with a common goal of driving revenue by downloading theEnterprise Marketing Playbook Series: Sales and Marketing Alignment.
Common Questions about The Sales Development Process
Once you’ve decided to build a lead qualification team, you have to make hundreds of decisions about how to manage the process. Here are some of the best practices I’ve learned over the years.
1. When Should Marketing Pass a Lead to the SDRs?
If Sales Development were an engine, lead scoring would be the oil. It probably does not make sense to call ALL your prospects, so best practice is to use lead scoring to identify the best possible lead for your team.