Nine Reasons Marketing Should Own Sales Development
J. David Green
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I’ve interviewed hundreds of marketers about lead generation. I’ve?interviewed and surveyed thousands of salespeople about this topic. Lead generation is usually the number one challenge for sales leaders as you can see in this recent research from Gartner .
I wish I had a dollar for every time marketers have complained to me about inadequate sales follow-up on marketing leads. I wish I had another dollar every time the phrase “marketing leads” provoked derisive chuckles from battle-proven salespeople.
I’d be rich.
Why Are Sales and Marketing So Often at War?
The know-how exists to solve this eternal problem. Goal alignment, service level agreements, the Demand Waterfall framework, and a well-run team dedicated to following up on marketing leads on behalf of sales will solve the problem.
These lead-follow-up teams go by many names, including Sales Development, Opportunity Development, Pipeline Development, Business Development, Account Development, Corporate Sales Development, Inbound Reps, and Market Development. I call such teams “sales development.”
Ideally, that team is a bridge between marketing and sales. Too often, it’s a wall.
I think it’s a wall because marketing doesn’t own the sales development reps (SDRs).
Per B2B consulting firm, TOPO, sales owns the SDR team 64 percent of the time, marketing just 25% of the time. More recently, in 2020, The Bridge Group, a sales development and inside sales consultancy, found that outbound reps report to sales 68% of the time . On the other hand, inbound SDRs report to marketing half the time, per that same study.
But Aren’t Sales Development Reps Really, You Know, Salespeople?
People I respect believe with all their hearts that sales development belongs in sales. This is their general rationale:
While there is always a situation that would be an exception, I generally agree with all of these points.
So what?
Marketing can always hire an inside sales leader to run this function. It’s not against the law.
Nor would I limit marketing ownership to the inbound SDRs. You’re removing economies of scale by not bringing all SDRs under one leader.
Let me lay out the reasons sales development should report to marketing.
#1. Uncoordinated Duplication of Effort
When sales development representatives conduct cold outreach to spark interest in having a meeting with sales, that activity overlaps with what marketing tries to do:
Wouldn’t it be more efficient to have one person designing the contact strategy and the messaging strategy for all outreach, including that of the SDRs? Sure, sales should have input, but designing contact strategy and messaging strategy is the core of what marketing does.
Imagine display ads complementing SDR sequences or SDR teams armed with the full array of common marketing calls-to-action (e.g., sweepstakes, gift cards, etc.) to sell meetings. Such integration with SDR sequences is a lot more practical when a campaign strategist is designing the campaign.
#2. Better Marketing Accountability
Have you ever been barreling along at 70 miles per hour and come to a little town where the speed limit is 30 miles per hour? It seems ridiculously slow, at least until you get acclimated.
Well, marketing is driving 70 miles an hour. They need to downshift to get on the same page as sales.
It’s not that going 70 is unequivocally bad. It’s going 70 through a school zone that’s bad, and sales is like a school zone.
The widespread adoption of account-based marketing (ABM) over the last few years is a good example of marketing down-shifting to get on the same page as sales. At some point, someone in marketing understood that some accounts have much greater revenue potential than other accounts and so warrant a different level of investment and more hyper-focused messaging. In other words, ABM was a great downshift for marketing.
That fact is that, too often, marketing confuses the customer motivation for wanting a white paper with the motivation for wanting to talk to sales. Yes, one can lead to the other, but only if marketing thinks through the entire messaging sequence and then tests and measures its hypothesis.
Unfortunately, that continuity between the initial message and the conversation with sales doesn’t always happen. As a result, marketers often assume sales is not doing their job properly. Sometimes that’s true. Sometimes leads from marketing aren’t worth the cost of follow-up because marketers default to counting volumes of leads to show value.
The fact is that, despite all the technology innovation in B2B marketing over the last 20 years, very few visitors convert into leads and very few leads become buyers. If you design a world-class landing page, 85 to 90% of the traffic won’t fill out your leader form. In fact, conversion rates below five percent are common. Even if you follow all the advice of Forrester around the Demand Waterfall , you will probably see less than one percent of your leads become customers.
Sales must live in much higher probabilities. Marketing should, too.
By being responsible for setting up meetings for sales, marketing will necessarily have to pump the breaks. That’s a good thing. The volume of meetings is a fraction of the lead volume so working through disputes about the qualification of meetings is actually possible.
Owning the outcome of driving meetings—and not just increasing web traffic or MQLs—will help marketing increase its overall effectiveness. At the same time, bringing that 70-mile-an-hour perspective to sales development will increase the efficiency of that function.
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#3. Better Alignment with Sales
Conflict between sales and marketing happens because the two teams have completely different goals. Sales wants to surpass quota. That’s how they make money. That goal is not the goal of most marketing teams.
Getting people to come to your website or fill out a lead form doesn’t necessarily correlate to revenue or profit. Is there a relationship? Sure. But it’s not hard to create false positives. Junk traffic to your website can bounce. Low-cost leads don’t convert.
The goal of marketing should not be to generate a certain number of leads per month. It shouldn’t be to generate leads at a particular cost-per-lead, either. Neither of those things necessarily helps salespeople. In fact, a high volume of low-cost leads could easily waste time for salespeople, lower sales production, and waste a lot of sales and marketing resources.
More sophisticated marketers measure the percent of the pipeline created from marketing leads. That’s closer, but here is the problem. With that approach, marketing is competing for pipeline creation credit.
Better goal alignment would be for marketing to help sales increase production. Can marketing drive more revenue through the sales headcount?
If marketing has to manage the sales development function, marketing will have to eat its own dog food: they’ll see for themselves just how qualified their leads really are.
#4. Right-Sized SDR Teams
In its most recent benchmark study of sales development, The Bridge Group found that the bigger the company, the more Account Executives there were per SDR . Of course, big companies often have large channel partner communities, which prospect on behalf of the company. But undersized SDR teams often mean that sales is doing too much prospecting and not enough closing. That misallocation of sales resources results in less revenue from the sales budget.
A big part of the problem is that sales leaders make a false choice between sales headcount of SDR headcount. That’s looking through the wrong end of the telescope. SDRs increase revenue production and offer a better ROI than just adding more sales headcount. Better ROI means more sales headcount in time.
Marketing should have the job of sizing the capacity sales has for taking meetings and then working with sales leadership to calibrate the right meeting volume each quarter. In the process, both sides should optimize the revenue production of sales. That’s a team sport worth playing.
#5. Messaging Expertise
If marketing has one definitive skill, it’s messaging. SDRs should take advantage of that messaging strength. Instead, too many SDRs are amateur copywriters. Very amateur. Sure, selling a meeting is different than selling a white paper, but it’s not that different. Marketing already understands personas and the need to adapt messaging to channels. Plus, marketing runs A/B tests all the time so optimizing open rates, click-through rates, and reply rates is in their blood. Testing should not be left to each individual SDR.
This is an example of infusing some of that 70-mile-an-hour mindset into the sales development process.
#6. Automation to Scale SDR Outreach
Marketing teams have been working on lead nurturing campaigns for ten to fifteen years or more. Those skills have enormous relevance to crafting the multi-channel sequence of messages that are the lifeblood of inbound and outbound sales development.
SDRs spend a huge amount of time on LinkedIn trying to find some tidbit of relevancy that might get the moment of attention from a prospect. Generating meetings is actually pretty formulaic:
Lots of those messages can be automated. Tools like Outreach and SalesLoft are ideal for this activity.
This is another example of using the 70-mile-an-hour mindset of marketing to scale SDR outreach. Sure, if the SDR is reaching out to senior execs in large accounts, a more researched message is justifiable. One-off activities should be the exception, not the rule.
#7. Higher Conversion of Inbound Marketing Leads
Many marketers complain about the lack of rapid, diligent follow-up on marketing leads. I’ve personally watched SDRs close leads without so much as sending an email. That doesn’t work.
Best practices for lead follow-up:
Too many sales development teams don’t make that kind of effort, and as a result, they don’t get the conversion rates that are reasonably possible.
#8.?Improvement of Upstream Demand Generation Effectiveness
Not only does sales development convert leads, but it can also elicit precise feedback on each one so marketing can better tune media, messaging, and tactics to improve the upstream investment yields. Can sales do this? Yes. But again, marketing has a much greater vested interest in making sure upstream campaigns work well.
The introduction of conversational AI into the workflow of the SDR team can especially help marketing refine campaigns with a wealth of voice-of-the-customer insights.
#9.?Higher Perceived Value of Marketing
If marketing owns sales development for both sales hunters and sales farmers, the revenue contribution from marketing will be much higher than 25 to 30% of revenue typical for enterprise companies. Moreover, if marketing sizes the SDR function properly, marketing may account for most of the new customer revenue and a great deal of the revenue from existing customers.
More importantly, if marketing works with sales every quarter to increase sales productivity through a cost-effective flow of initial sales meetings, the perceived value of marketing will increase accordingly in the C-Suite.
Executive Summary
There you have it. Nine reasons for marketing to own sales development:
I'd love to hear your thoughts about which department should own sales development. If you have questions or if your company would benefit from this change, I may be able to help you. Let’s have a conversation.
Senior Conversion Marketer - Data driven, performance focused
3 年You are right on target David. I like the Chief Revenue Officer role with oversight of sales, marketing and front end development. This puts responsibility squarely in one executives portfolio, with accountability for both wins and losses. No confusion... No passing the buck... Finger pointing with separate work groups is too often the reality...