In a Mature World…

Top 3 Reasons Why Sales Development Still Reports to Sales

Guest Blog by Sally Duby, Phone Works GM

Sally, a veteran of technology inside sales, is a leader in Sales 2.0. Before joining Phone Works, she produced millions in new revenue and dramatically increased the quantity and quality of leads at software giant, Oracle Corporation, going on to replicate those kinds of results for other employers.  Today, Sally focuses on helping companies, from venture-funded start-ups to Fortune 500 companies, create top-performing, cost-effective lead generation and inside sales teams. She has led Phone Works projects for more than 350 client companies.

I recently got my hands on a copy of Marketo’s new e-book (also posted here as a blog) “The Definitive Guide to Sales Lead Qualification and Sales Development.”If you haven’t read it yet, I highly recommend you do, and not just because they quote from our most recent Inside Sales Compensation Study.  Marketo knows their subject and they practice what they preach. 

In the section about “How to Design and Build a High Performance Sales Development Function,” Jon Miller, Marketo Co-Founder & Chief Strategist, asks the question, “Should Sales Development Report to Marketing or Sales?” He quotes our report, saying, “According to Phone Works, Sales Development teams report to Sales about twice as often as to Marketing.” But he counters with, “I think that reporting to marketing is a best practice.”  I’d like to jump in and talk about why Sales Development still reports more commonly to Sales.

The Top 3 Reasons Why Sales Development Still Reports to Sales

Reason #1: You have to manage what you’re accountable for

In almost all the 350+ companies we’ve worked with, Sales is still responsible for the pipeline.  Why?  Because they’re accountable for revenue.  As long as their feet – and their feet only – are held to the fire over revenue quotas, they need control over the pipeline and the pipeline is built by Sales Development. 

Reason #2:  MQL?  SQL?  Will the real lead please stand up?

We’ve all heard the whining, “It’s not our fault we didn’t make quota, Marketing didn’t give us enough qualified leads.”  Maybe the issue is not with the number of qualified leads, but in how each department defines “qualified.”  For most of our clients, a Marketing Qualified Lead (MQL) is a lead that needs to be further qualified by Sales Development, while a Sales Qualified Lead (SQL) is ready to become an opportunity. Perhaps if Marketing was responsible for turning over SQLs rather than MQLs, Marketo’s model would make sense for more companies.  I might add that very few Marketing departments today have adequate demand-generation budgets to develop and nurture the quantity and quality of leads Sales needs for a robust pipeline.  Which leads us to reason #3.

Reason #3: We’re not all as mature as Marketo

Seriously!  Maybe in the next two to four years, as the Sales 2.0 world matures, we will see more Sales Development teams reporting to Marketing, as Marketo describes.    

In a mature Sales 2.0 world, Sales and Marketing will share responsibility for revenue and, therefore, the pipeline. In that world, Sales Development can report to either team equally well.  Sales will communicate openly and strategize with their trusted Marketing partner about the type of leads needed and how best to reach them.  That’s Sales and Marketing alignment, something Phone Works helps clients work towards.  But it’s not today’s world for most companies…yet.  It is what Marketo is describing, and where they live today.  My hat is off to you.  Thank you for the opportunity to generate some discussion about the state of Sales and Marketing alignment today.

Let’s get some dialogue going.  Where does Sales Development report in your company?  Who is responsible for the pipeline?  Is Sales and Marketing alignment a pipe dream or reality for your organization?

Tags: defining a lead, lead qualification, marketing and sales alignment, Marketing Qualified Lead, MQL, pipeline accountability, pipeline development, responsibility for the pipeline, revenue accountability, Sales 2.0, sales and marketing alignment, sales development, sales lead qualification, sales pipeline, Sales Qualified Lead, SQL