All Leads Are Not Created Equal

By Lisa Cramer, President, LeadLife Solutions; Published in Inside CRM

Not long ago, marketers could determine the success of online marketing activities fairly easily. The process went something like this: run a banner ad or send out a promotional email, then count the resulting hits on the company Web site to evaluate program results.

Today, the process is more complicated. Leads flow to marketing from a variety of online sources — email campaigns; downloads of materials from Web sites, Google searches and AdWords; Webinars; online ads; and blog responses. Add these to traditional vehicles like print ads, direct mail and trade shows, and evaluating the sheer volume of leads can be overwhelming.

Additionally, the Internet has brought changes in the way customers buy. Due to the vast amount of information online, most prospects now spend a lot of time conducting research and educating themselves. In other words, a hit on your company Web site is very likely someone who is nowhere near ready to make a purchase. Passing them to sales too early in the process can be irritating to the prospect and a waste of your company’s expensive sales resources.

It’s becoming harder to determine the real source of leads, the success (or failure) of individual marketing programs and the value of one lead over another. To this end, how does a marketing team prioritize the leads it receives and determine which ones to send immediately to sales, move to telemarketing for qualification or continue to nurture with marketing activities?

DETERMINING WHERE A LEAD IS IN THE BUYING PROCESS
One thing known with certainty is that all leads are not created equal. This makes lead scoring crucial for marketers so they can determine prospect readiness and take appropriate action at the right time. Increasingly, automation is key, since spreadsheets and calculators can no longer handle the volume of leads and their varying sources, interactions and demographics. Marketers don’t have time to track leads and crunch complex numbers while also crafting innovative product campaigns.

Similarly, metrics used to track and evaluate marketing programs must change. Today, a simple hit on a Web site might mean far less than a combination of hits or other actions by the same prospect over time.

This isn’t to say that metrics regarding hits on Web sites are unimportant, or that you shouldn’t track email clicks. However, they're no longer the endpoint; instead they're just the beginning of real marketing analytics, which determine where each lead is in the buying process, and how to respond.

Marketers must change how to track and score prospect behavior to determine when a lead is truly ready to be passed to sales. As part of this, marketers must also identify ways to nurture early leads into “sales ready” buyers. What this means is that marketing needs to recognize which leads are ripe and which still need time on the vine — then grow those leads accordingly. Lead scoring helps make an accurate determination of how ripe each lead really is.

MAXIMIZING VALUE OF LEAD GENERATION DOLLARS
Pressure is mounting on companies to maximize marketing ROI (return on investment). In other words, the money spent on lead generation should show a strong return related to sales revenue. This money should be evaluated so it is continually applied to the highest yielding program(s). To do this, marketers must gain visibility into individual programs to determine the number and quality of leads they generate and how many ultimately transform into closed sales.

But the issue doesn’t stop there. Increasing the value of lead generation dollars also means ensuring the leads being handed to costly sales resources are indeed sales ready. According to CSO Insights’ 2008 Sales Performance Optimization Study, salespeople are generating 50 percent of their own leads. That’s an expensive proposition and raises the question: What is marketing doing?

It’s clear marketers must find ways to track and manage leads through the lead life cycle. This requires the ability to evaluate leads, determine when leads are sales ready and understand when they are not.

Additionally, marketers must take responsibility to nurture the leads that aren’t sales ready to maximize the value of what they’ve spent on lead generation dollars.

Industry benchmarks suggest that leads must be continuously “touched” before they close. About 80 percent of leads close after five contacts and sometimes it’s closer to nine to 11 touches. If you’re assuming the value of lead generation dollars comes from one email blast or a month of AdWords, you’re not on the right track to understanding how to increase value. Nurturing leads as part of lead generation programs will increase the return of dollars.

IMPLEMENTING CHANGE
So, how do you enable your organization to increase this value (money spent on lead generation), start tracking marketing analytics you haven’t before and know which leads are sales ready? Marketers need to incorporate systems and processes to help them.

Implementing a lead management system enables marketing to evaluate and score every lead’s interaction with your company. Based on this behavior, the system automatically prioritizes the lead to determine the appropriate next step to move the lead through the buying cycle. In this manner, it becomes easier for marketing to determine lead value and the success of marketing programs, as well as make the right decisions on how to proceed.

Today, all leads are not created equal, and marketing departments need assistance in making the right call. Automation is a step toward more efficient, accurate processes.

About the Author
Lisa Cramer is president and co-founder of LeadLife Solutions, a provider of on-demand lead management software that generates, scores, and nurtures leads for B2B marketers. For more information on lead management visit www.leadlife.com or call 1-800-680-6292.

Tags: Marketing Automation, Lead Management, Lead Generation, Lead Nurturing, Lead Scoring, Lead Tracking