the funnelholic

I may have to do a post: “What should we call phone-based lead generation/lead qualification”? I call it “sales development” and that will be the case for this post. In my opinion, it is one of the most tried-and-true best practices for well-oiled revenue machines.  The job of sales development is to identify, connect with, and qualify leads.  Once sales development has determined that a lead is qualified, they “hand-off” the now qualified lead to the closer (sales).

Sales development has been on the forefront of my mind recently. I just wrote a well received post on the TOPO blog on why sales development teams fail.

So I love, support, recommend and help build sales development teams. One vexing question for me has been “who should own it?”. For this post, I have done three things: First, to understand where these teams report today, I borrowed data and information from The Bridge Group Inc.’s Lead Generation report. Secondly, I reached out and asked inside sales influencers and practitioners for their take. Finally, I did a poll with sales, marketing, and inside sales people to gather some of my own data.

The Current Scenario

As I mentioned previously, these charts and data are courtesy of The Bridge Group Inc.

First thing you will notice is that currently the vast majority of sales development (called lead generation in the report) report to sales.

Interestingly, The Bridge Group Inc’s report shows that the activity mix is a major factor in deciding where a sales development group may report.  Sales development teams primarily report to sales when the main process is heavy outbound prospecting but marketing is the more likely owner (it’s close) when the main goal is qualification of inbound leads. From the report:

 

Expert Analysis

I reached out to inside sales influencers to get their take. I asked the question: “Who should own phone-based lead generation/lead qualification (sales development)? Sales, marketing, or it doesn’t matter as long as there is an owner”.  The analysis is interesting:

The “it doesn’t matter as long as there is an owner” camp:

Trish Bertuzzi from the Bridge Group Inc

We don’t care where the team reports. The only criteria is that it report to an organization that has the expertise, passion and bandwidth to pay attention to it.

The “it should be owned by marketing” camp

Jon Miller from Marketo

• Aligned incentives. At the end of the month or quarter, marketing and sales development are concerned with leads and pipeline creation, while sales cares about whether or not deals have closed.  It’s in your best interest to align these incentives up the SDR management chain.
• Streamlined measurement. When sales development reports to marketing, it makes it easier for marketing to be measured – and compensated – for creating sales pipeline. This is because marketing is responsible for everything before pipeline (e.g. they are only one step away from their goal).   When sales development reports to sales, it puts marketing’s key metric (sales pipeline) two steps away from their control.
• One throat to choke. From a management perspective, putting marketing in charge of sales pipeline development can do wonders for eliminating finger-pointing. Put another way, if marketing is responsible for lead follow-up, you can say goodbye to “we sent over X leads; they just didn’t follow-up well.”
• Better closed-loop feedback. Increased synergy between marketing and sales development means increased transparency around lead quality feedback, which is essential for refining the process.
• They play by the same rules. Like B2B marketing, lead qualification is a number and metrics game.  Why place a golf ball on the tennis court when it’s intended for the green?

Matt Heinz, Heinz Marketing

The Pros

• Marketing is closer to revenue responsibility by owning greater portion of sales cycle
• Sales can focus only on qualified opportunities
  *If your inside sales team is focused on qualifying leads, make that a marketing function and allow your sales team to focus on selling.

The Cons

• This is a sales management job and that is a skill marketers typically don’t have
• Sales development management is a full time job and few marketing organizations plan for or expect this time of commitment
• Marketing needs to commit resources (creative, content, training, tools) to the success of the sales development team
• Sales leadership typically don’t like the idea giving up what they view as part of the sales organization

The “it should be owned by sales” camp

Tom Scearce, Sr. Product Marketing Manager

Sales should own it but marketing should fund it. And sales and marketing leaders must co-present regular status updates at the executive level. It’s too important of a function — because getting it right  requires considerable investment and coordination over a sustained period — to be left to one or the other group. Through sharing these budgetary, operational, and readout responsibilities, sales and marketing are strongly encouraged to agree on execution details, expected outcomes, and the metrics that will be shared with their peers.

Chris Snell, Inside Sales Manager, SMB at Care.com

I believe sales development sits right in the middle of marketing and sales.  They filter all of what marketing produces (the MQL), and because they work so closely with sales, they know what does and doesn’t make a prospect an SQL.  Sales should own lead qualification because of the desired result of the lead; a closed deal.  Marketing sends all leads, all potential targets to sales, (who should own training and development of teleprospecting), and the phone team sifts through it all like a ’49er looking for gold.

Gemma Mailhot, Head of Inside Sales at BMC Software

It can work in either area, however two key reasons to have it in sales. One, if you want a top notch sales development team you want them to be more like sales people then marketing people. Two, to attract the best of the best…..they need to have a career path and 90% of the best sales development reps want to be in sales not marketing. There are several other reasons why you might have it under sales but to me those are the key reasons.

Lars Nilsson

IMHO, if the role in question is to use the phone or email to generate “sales” activities, like meetings, appointments…then the role should reside in sales.   If the role to is qualify in or out marketing leads for then another role to do the actual follow-up, then I think the role could end up in marketing.  This (latter) role is more of a data-scrubber, lead flow manager, lead triage’r, than an activities based sales person (Former).

Survey Results

I sent out a survey to inside sales influencers and practitioners to “take a vote”. It seems that sales continues to be the place to be for sales development:

My take

Do you mind if I hedge a bit? My preference is for marketing to own as much of the demand generation process as possible and allow sales to focus on closing qualified leads. For that reason, I lean towards having marketing own the group. However, like Trish, I just want organizations to have a sales development group, and I have seen sales organizations run these types of groups extremely well. So: I prefer marketing and completely support sales ownership. (wimpy, but truly how I feel)

What’s your take? Let me know in the comments field…

Craig Rosenberg is the Funnelholic and a co-founder of Topo. He loves sales, marketing, and things that drive revenue. Follow him on Google+ or Twitter