3 Steps to Generating High-Quality Leads
For the past six years close to 70% of marketers identified “Generating high-quality leads” as their number one challenge. Sadly, most companies are no closer to overcoming that challenge today than they were in 2008.
The problem is that it is a lot more fun to talk about marketing automation, personas and social media while enjoying a Cosmo than it is to talk about lead and market definition.
As I sat down to write this blog, I read an article by Ardath Albee (Marketing Interactions) who had just read the B2B Lead Generation report from Buyer Zone. She wrote:
“…my heart sunk a bit. That nearly 50% [of marketers] are sending inquiries directly to sales as “leads” was disheartening enough. But when asked where they’d spend budget if they had money to burn, the answer from 31% of B2B marketers was to buy more leads. The majority of marketers said that increasing lead quantity was the key to their success… Have we learned nothing? Do marketers walk around with blinders on? Or is it wishful thinking that force feeding our funnels can solve all of our problems?”
Here are three things you can do right now to dramatically improve lead quality (and ROI on marketing and sales investments):
- Don’t send raw, unfiltered leads to sales
- Value non-lead dispositions such as “Pipeline” and “Nurture”
- Don’t measure “cost-per-lead.” Measure “cost-per-sales-ready-lead”
Don’t send raw, unfiltered leads to sales
The whitepaper “Why Your Sales Force Needs Fewer Leads” quotes a Gartner Customer Relationship Summit speaker who stated: “Having fewer, but higher-quality, leads provides more value to sales employees and improves the visibility and accountability of marketing.” Further, SiriusDecisions states: “It’s a bizarre, often co-dependent relationship; working at arm’s length, sales has the latitude to dismiss the leads marketing creates as not qualified or nurtured enough, while marketing can claim they are holding up their end of the bargain when you consider things purely from a volume standpoint.”
The whitepaper provides ten attributes of a well-qualified lead and closes with the following: “By not passing unfiltered, unqualified leads to your sales team–and focusing instead on delivering fewer, yet more qualified prospects–you have the very real potential to significantly impact your organizations ability to generate revenue.”
Value non-lead dispositions such as “Pipeline” and “Nurture”
On average there are 30 – 70 leads for every 1,000 suspects you market to. Most of the time marketing’s analysis of campaign results starts and stops with the number of leads. In addition to leads there will be 30 – 70 Pipeline dispositions (a specific next step in the near future— generating a substantial number of additional leads) and 250 Nurture dispositions that will result in four times the lead rate over the next year assuming that you effectively nurture these prospects. Ignoring the value of these other dispositions increases the cost per lead by up to three times. The opportunity cost is enormous!
Don’t measure “cost-per-lead.” Measure “cost-per-sales-ready-lead”
In “Point C: From Chaos to Kickass” I report on a client company that measures success on a cost-per-lead basis. The result? Marketing states that it delivered 9,000 leads to sales last year and sales reports that they received ZERO leads from marketing. Of the 9,000 non-leads, 6,000 came from content aggregators at a cost of $23.15 per lead. At sales request we audited those leads and found that just 1.28% of them were qualified. So, the cost-per-sales-ready-lead was $2,662.24 (as compared to $1,357.25 per proactive outbound leads that sales prefers). Marketing’s response was that they would just discontinue having us pre-qualify the leads and send them straight to sales. Sales simply ignores them. The wasted cost to this company: $138,900 per year. This, folks, is happening today in a small division of one of the largest software companies in the world. Based on my experience it is happening in most companies—and the bigger the company the bigger the problem.
To sum things up, I quote a really good guy in our industry, Milap Shaw from Nexsales: “In discussing quality versus quantity of leads, sometimes when you throw peanuts, all you get is monkeys.”