Most of the so-called experts in lead generation today are riding the inbound bandwagon. It’s hard to read a marketing article or blog without a blaring headline claiming inbound is king and outbound is dead. I get it. Inbound leads are in some cases great. You use SEO, blogs, marketing automation—every tool in the kit—and wait for prospects to come to you. But inbound leads drive smaller deals that often involve relatively lower level decision makers. Why? Most senior executives aren’t willing to jump through all the hoops to get your attention. You can’t afford to wait around for them because more aggressive competitors are sure to move on the opportunity. Unless you are selling a relatively low priced good, service or commodity, it is highly unlikely you will drive enough inbound activity to sustain, much less grow, revenue. The result is a debilitating condition I call “inbounditis.” The main symptom of inbounditis is an overreliance on inbound marketing to generate leads. Left untreated, inbounditis progresses into a full-blown disease that spreads from marketing to sales and eventually attacks the revenue backbone of a company.
R – I = big GAP (aka Inbounditis)
Despite its trending popularity, marketing automation is not equipped to filter and/or prequalify leads. Thanks to automation, marketing can now send more poor quality leads to sales faster than ever before. Sales reps get bombarded with more leads than they can handle. What competent sales rep would be (or should be) willing to expend precious time and resources to cull through a hundred leads to find five good ones?
Furthermore, inbound leads are not less expensive than outbound leads. In a free whitepaper, “Point C: From Chaos to Kickass,” I evaluated real data from a client and found their $23.15 content aggregator leads actually resulted in a $2,662.24 cost per qualified lead, while proactive outbound leads cost $1,357.25 per qualified lead.
A sales executive recently told me he would “rather have 10% of the lead flow he is getting now with 80% of the leads being high quality, than the current state of affairs where only 5% of leads are qualified, at best.” In average companies, sales executives are required to find 60% or more of the leads they need to make their number. While some best in class organizations have reduced the percentage to 38%, this number is still too high in my opinion.
R – I – N = a little smaller GAP
I’d like to propose that the most underutilized marketing activity is nurturing.
Consider the following:
On average, for every 100 dispositions (completed conversations with contacts or companies) … .
- 5% result in highly qualified sales leads = 5 leads
- 5% will be what I call “pipeline” dispositions. (These are dispositions that require another step within a month or six weeks prior to potentially qualifying as leads.) Such “pipeline” dispositions can increase marketing results by 40% if properly nurtured.
- 40% of 5 “pipeline” dispositions = 2 leads in addition to the existing 5 leads.
- Another 27% will be what I call “nurture” dispositions. (These dispositions are qualified contacts in qualified companies with circumstances—technical or other—that make them a good fit over the next two sales cycles.) When properly nurtured, the lead rate on these “nurture” dispositions is approximately 7%.
- 7% of 27 “nurture” dispositions = 2 leads in addition to the 7 leads already generated.
5 leads + 2 leads from “pipeline” dispositions + 2 leads from “nurture” dispositions = 9 leads
9 leads (as opposed to 5) per 100 dispositions is whopping 80% total increase!
When you add it all up, most companies do not drive enough revenue from inbound marketing AND nurturing to meet their revenue goal. They have to mind the GAP. Minding the GAP begins with a careful evaluation of your target market. Most companies market too broadly, meaning they spread scarce dollars over larger than necessary markets, only to generate very few qualified leads. I know a client who started at his company with no pipeline and grew it to over $200 million within a 2 year period. When I asked how he did it, he revealed his secret: relentless focus on the 1,200 companies he knew his company should be doing business with—or should be doing more business with.
Ignore the Experts
Back to the lead generation experts. While some have started to talk about the value of nurturing, for the most part their perspectives are based on theory, not experience. You don’t hear many experts today sounding the alarm about inbounditis and the importance of minding the GAP with proactive outbound tactics.
Former “chief evangelist” of Apple, Guy Kawaski, worked with a man by the name of Steve Jobs. You may have heard him. Read what Kawaski has to say about the number one (out of twelve) lessons he learned from Jobs:
“Experts—journalists, analysts, consultants, bankers, and gurus can’t ‘do’ so they ‘advise.’ They can tell you what is wrong with your product, but they cannot make a great one. They can tell you how to sell something, but they cannot sell it themselves. They can tell you how to create great teams, but they only manage a secretary. For example, the experts told us that the two biggest shortcomings of Macintosh in the mid-1980s was the lack of a daisy-wheel printer driver and Lotus 1-2-3; another advice gem from the experts was to buy Compaq. Hear what experts say, but don’t always listen to them.”
My advice? Listen to Guy. Ignore the experts. Mind the GAP.
Originally published on the Revegy blog, May 16, 2014. View the original article