B2B Lead Generation Blog

Podcast: A new role for sales as expert content filters

I just had a great interview with Robin Carey, co-founder of the Customer Collective.

Salespeople have become the second choice for information among buyers who'd rather just go to the Internet. This trend actually creates an opportunity for those who think and act like trusted advisors.

You can listen here

In the interview, I share how I got my start and how the Internet has shifted control away from marketers and salespeople. I also describe how today's sales people can add value to the buying process by becoming expert content filters for prospects. This is the key to lead nurturing with a human touch.

What's The Customer Collective? It's a new business outreach community for sales and marketing executives. It was built in collaboration with established media companies like Business Week, ZDNet and BNET. I see it as a social media site (that doesn't focus on social media) but rather looks at real meat and potatoes sales and marketing. We need more sites like this.

Fear not! Think like a savvy investor with lead generation

This morning I was talking to a marketing leader about his 2008 strategy and he brought up some concerns he had about the economy and its potential impact on him and others. Can you blame him?

In years past, marketing has been favorite target for cuts by CFOs and CEOs as they look to conserve cash and reinforce their balance sheets for tough times.

I’m less concerned about budget cuts and more interested in opportunities for him and other B2B marketers who choose to bring focus to their marketing efforts. We have to remember that regardless of the economy, sales people are still expected to perform. I seldom find sales quotas are lowered to fit the news headlines.

If you want to flourish regardless of the economic conditions, you need to look for ways to help your sales team execute and improve performance.

I’m convinced that one of the best ways to do that is to focus on lead generation. Yesterday, I read a Kate Maddox's article in BtoB Magazine, "IDC: Tougher times for tech marketing," which supports that other B2B marketers are doing just that.

Much like a savvy investor who buys when the market is down, smart marketers can capitalize on this opportunity (and beat competitors), by bringing focus and attention to their lead generation efforts.

Maddox’s article highlights IDC's recent tech marketing barometer research. IDC showed that fewer tech marketers are increasing their budgets this year compared to last year. But I think the bigger story is how those dollars are being allocated. Maddox writes, “According to the [IDC] report. Lead generation is the top marketing priority for tech marketers this year…”

According to studies, the single biggest issue for contemporary business-to-business marketers is effective lead generation.  Conversely, it has been pointed out that 80% of marketing expenditures on lead generation and collateral are wasted because the leads are ignored by sales people.

For this reason, marketers should direct their budgets away from traditional awareness building campaigns that quickly eat up budget and instead expand and optimize lead generation programs that bring measurable results. Finding better tools and processes for managing the leads or inquires that they already have is also a good investment in a turbulent economy.

You will optimize lead generation immediately if you can honestly answer “yes” to all of the following questions:

• Do sales and marketing agree on what the word “lead” means? 
• Are you tracking the conversion rates of leads to sales opportunities?
• Can you/Do you close-the-loop on all leads that are being passed to sales?
• Does your sales team pass back early stage or "cold" leads back for lead nurturing?

You may also want to check out my complementary webinar archive based on the ebook "The One Piece Of Advice You Can't Generate Leads Without" by RainToday titled, “More Is Not Better If You Don't Know How To Nurture”

Why cost-per-lead budgets fail and fewer leads are better

A reader asked me to explain why fewer leads are better and why “cost-per-lead” budgets fail. These are two great questions that have the same fundamental answer: quality first then quantity.

The truth is that sales people care very little about the cost of the leads we generate. What they really care about is how many of those leads will actually become viable sales opportunities.

For this reason, I think cost-per-lead measurements are irrelevant unless we can answer another fundamental question first, “What is our rate of lead acceptance (a.k.a. sales pursuit) into the sales pipeline” and then “What is the cost per opportunity?”

Sadly, I find that a lot of marketers tend focus on cost-per-lead because they really don’t know what happens to their leads after they hand them off to their sales team. This is why closed loop feedback and lead management are so important.

B2B Marketers must start measuring cost-per-opportunity now! Why? It’s the one metric that can help you understand how well your sales team accepts and pursues leads.  Ultimately, it shows if your leads are actually helping our sales team sell and if we’re positively contributing to their pipeline.

Lead acceptance into pipeline is primarily a function of lead quality.  There are other influences such as sales training and refining the lead handoff process, but lead quality stands out as the single largest factor driving the real ROI of our lead generation programs. 

In a cost-per-lead model there is a tendency to drive down the cost of each lead by generating more leads, which is good if the quality does not suffer.  However, this is rarely the case since there are a finite number of high quality sales ready leads in your target market at any given time.

The real question is, “Are these leads helping our sales team sell more and will these leads become profitable customers?” 

In most cases in order to get more leads to sales (as they demand more leads now!), marketing is forced to send early stage leads, often at the inquiry stage in order to meet quota or cost per lead requirements. Of course, the need for more leads does not come with a commensurate budget increase!

Simply sending more leads over the fence to sales will only result in more early stage leads being lost, ignored or discarded.  And if your early stage leads are not being cultivated with lead nurturing and given the attention they need, they will go to waste. Unfortunately in a cost-per-lead scenario this waste will not be measured, rather only your lead production costs.

There is no doubt that a cost focused mindset is a lot different than a value driven mindset.  The cost focused mindset often drives decisions that are arbitrary to the objectives of a lead generation program. The most valuable leads are those that your sales team can convert to viable sales opportunities, not just leads that drive more activity.

Pushing more leads and creating more activity can give marketers a false sense of security in the short term, but in the long term the cycle of failed campaigns will continue as past failures are dismissed, overlooked or as fingers are pointed.  To break the cycle, we must close the loop with sales and start measuring opportunities.

The following are real-world metrics that every marketer should track in their lead generation program:

• # of inquiries? 
• # of leads? (qualified as "sales-ready")
• # of opportunities (leads in moved into sales pipeline)? 
• # of closed deals from marketing leads?

If you know those metrics you can start to track the following key performance indicators:

• Inquiry to lead ratio
• Lead to opportunity
• Lead to proposal ratio
• Lead to sale (win) ratio

A value driven mindset requires leaders and marketers to plan and budget for the long term and to take a more holistic view that goes beyond cost-per-lead budgets. Cost-per-lead budgets are irrelevant unless you can first measure cost-per-opportunity or cost-per-lead-pursued and lead quality is a key driver in insuring that those leads are pursued.

What do you think about cost-per-lead budgets or sending fewer high quality leads to sales people? 

B2B 2.0 marketing expo by MarketingProfs

The gang at MarketingProfs put together conference that's worth checking out. Now here's the best part... no conference travel required. The B2B 2.0 Marketing Expo is March 5, 2008 and you can register here.