The true value of B2B leads in high cap-ex, complex sectors that convert to new business wins have been commoditised!
Let's shake things up and get rid of misleading lead terminology once and for all!
When market demand may be low (usually due to external market forces), the Marketing Services sector should not be warping client result expectations to confuse the client over the shortfall in demand and still get the client's full campaign business and related fees for a job that is less than complete.
During the Financial Crisis of 2007/8 and following on for several years thereafter, with the slowing down of the Economy, demand was bound to reducing. For Marketing that means that the supply of leads to clients fell off a cliff.
It is at times like this, that an industry re-invents itself in order to survive. And so leads were replaced by the number of Appointments becoming the new primary KPI.
This gave carte blanche to any Marketing Agency to generate as many Appointments as they wanted. The clients had agreed to the KPI - so they went for it.
What clients failed to recognise until many months AFTER campaign end and monies paid to their agency of choice, was that most agencies were booking Appointments that had no projects supporting them.
It was only either the day before an appointment was due to take place - up to 50% of companies cancelled the meeting - or a Salesperson arrived for the exploratory first meeting - when the penny dropped that as high at 90% of appointments (in some cases), had zero substance or foundation, wasting a lot of Sales resource and related Sale travel (and probably accommodation) expenses.
End user clients should be encouraged to look at the £’s Sales Book Value of each lead that their agencies generated and their potential for repeat business, along with the Quality of a lead and its ability to increase new business Sales conversion rates for the client and NOT at all by average cost per lead!
And in all Projects / Services sectors - implementation costs should also be taken into consideration – because if a solution turns out to be a bad fit for the requirement, expect a bumpy ride with the client, the time to go live extend beyond agreed timescales and implementation costs to soar! It is also the responsibility of the Sales team to make sure that no bad business is brought into their own organisation.
So far, all I can see is that these high-charging agencies are utilising marketing automation and/or AI solutions that admittedly do get a lot of the mundane organisational and planning legwork done quickly within a campaign, but semi-automated campaigns can be just as rewarding, for much less campaign spend and are far more accurate in delivering back valuable Data and Insight, for more accurate personalisation of future Content.
No wonder many organisations still have difficulty with lead scoring / measurement being a key challenge!
Lead Quantity KPI’s are open to abuse – especially if there is confusion within the business as to how to qualify a lead and the terminology that is used within a single business (which could be very different to other businesses).
Typical terminology offenders are: -
1. Raw data providers, who call basic target data ‘prospects’ or even ‘customers’,
2. A leading global CRM author calling leads ‘Opportunities’! But surely an Opportunity is an Enquiry that has been QUALIFIED and therefore converted to a LEAD?
3. APPOINTMENTS were abused massively in the ERP marketplace after 2007/8 for maybe 5+ years. Many competing external Marketing Agencies whose lead volumes had plummeted because of very low demand due to the economy falling off a cliff, replaced the hook that was ‘leads’, and changed it for ‘appointments’.
Booking appointments sounds great at first. However, within a day or so of a booked appointment taking place, as many as half of the companies would cancel the appointments and those appointments that did largely go ahead and take place, were just face to face meetings with companies who had no project or budget! A total waste of Sales time and a bad skew on new business conversion rates!
4. Marketing Automation providers call inbound traffic entering the funnel ‘Leads’. It is un-qualified traffic.
5. Account Based-Marketing (ABM) calls preferred target data yet to be contacted ‘Accounts’. I thought an ‘Account’ was already a customer or client – NOT COLD OR RAW DATA!
6. Then there are Marketing Qualified Leads (MQL) and Sales Qualified Leads (SQL), and people are still wondering why the Sales team are rejecting as high as 75% of the leads handed over to them from Marketing, even when using these terms and their associated grading structures!
7. Even with LinkedIn’s own Sales Navigator – After running a search or a filter to identify key contacts – this data is still UNQUALIFIED, but LinkedIn refers to this data as either LEADS or ACCOUNTS. You may have done some data segmentation and profiling to get these contacts, but you have not pitched to or qualified them yet. So, they are still ‘targets’ or ‘key contacts’, until proven otherwise – and that conclusion needs VOICE contact!
The Marketing sector appears to be attempting to re-invent itself yet again, as it did in the financial crisis of 2007/8, when lead volumes were low, certainly most of my competitors jumped on the ‘Appointments’ bandwagon.
In the IT sector today, even global Tier 1 authors are finding that MQL’s – an internal qualification standard - can be misleading.
Most recently, we now encounter ‘engagements’, when ‘sales-ready lead’ I believe would be better and more clear term to us. Because who really knows what an ‘engagement’ really is? Once again, the goal posts are changing.
Here is my take on a no-nonsense, no fluff, no grey area classifications glossary to help guide you through all the disruptive noise going on from those trying to confuse the hell out of you and/or do not have the skill sets or experience to generate the QUALITY leads that they are selling to you.
Great for people with no Sales & Marketing experience ever, right up to those who know exactly what they are doing, but perhaps are having a struggle changing the culture inside their own businesses and need some external back up from a good demand/lead generation specialist such that makes total sense as has the ‘ring of truth’: -
Data
Raw, cold data – probably sourced from a 3rd party data provider AFTER initial segmentation co-ordinates such as Location, Annual Turnover and NAICS or SIC Code have been deployed.
Segmented-out Data
Data that does not fit a vendor’s primary target market. Quite a lot of legwork done here, including behavioural patterns or trends –
1. Firmographic and
2. Technographic research,
3. Decision made at Corporate HQ based overseas and therefore outside your sales territory,
4. A major competitor or market leader is the incumbent supplier.
a. If the supplier’s offering is very hard to penetrate – then maybe best to avoid wasting effort in targeting them.
b. If the incumbent has known areas of weakness that can be enhanced by a 3rd party offering, then it is well worth compiling a list of as many companies where the competitor is incumbent and run a series of separate tactical campaigns over time, that are personalised to fit the vendor’s strengths (without mentioning the weaknesses of the competitor in question).
5. More astute vendors that I have encountered through my career, go a stage further by analysing how successful implementations have gone in and also how good to poor relationships are, with all of the client base – usually by how much margin is eroded in the initial implementation of the solution (if it is a bumpy ride with the client) plus the types of repeat business through the onboarding process in the first 12 to 18 months after go live – to the extent that if a prospect (explained later in this document) is less than a 60% fit of ‘requirements to solution’ – then all other companies with below a potential 60% fit should be segmented out of any future new business marketing strategy, to focus on the higher percentile instead as the further-refined primary target, as conversion rates would be much stronger and the vendor should have happier business with greater margins.
Altogether there are 12+ levels of potential target segmentation to consider. It could take a few man-weeks of analysis and preparation, but it will save years of targeting the wrong companies continuously and wasting budgets.
Important – because without the additional analysis, you could think you know your target market, BUT between 15% to 50% of your original primary target list could be completely useless to you, leaving Heads of Sales, Marketing and Finance (plus the shareholders), scratching heads and wondering why the business is not performing as well as it should be.
These additional levels are the third dimension to our own methodology that is Advanced, Agile, Account-Based Marketing, or A3BM. For more details, the link is https://www.reflexitmarketing.com/a3bm
Incidentally – this cannot be 100% fulfilled WITHOUT voice contact. If you do little to no cold calling for data verification and just using tools including Marketing Automation (perhaps with data supplied by 3rd party MA providers) and AI – you will NEVER see the full picture and there could be quite a substantial negative skew lying under the surface, that causes big pain throughout the pipeline whenever demand for whatever reason, decreases.
What is the point in gaining leads just from an Intent Data provider if they only provide you with a list of businesses who are visiting websites like yours and that of your competitors, if they cannot tell you who may be up and coming for an evaluation of your solution in the next 2 to 5 years?
It can take this amount of time to build your brand sufficiently amongst bigger future prospects and gain their trust as their type of niche vendor who displays all the signs of empathy to their operations and a leader in your field of expertise.
Refined Data
Not a term that is used that much – but should be! You have done all the leg work cleansing the data and segmenting it correctly – which can only be done by voice-based contact as close to 100% of the original target data as possible.
With some straight-forward analysis, you have a very strong grasp and awareness of your primary target market(s) and future campaigns have a higher probability of pitching correct personalised content to the correct job functions and you are then quickly seen as an authority within your niche, that needs to go straight onto the shortlist, next time any of your target organisations are in the market for your solution(s) or service(s).
Inbound Traffic
Data coming into the Marketing Funnel after various Marketing campaigns/initiatives that generates curiosity, interest and/or demand.
Warning – if the original target data for these campaigns did not utilise fully refined target data – this traffic will be the key factor for ‘sticky leads’ remaining in the funnel and hindering the progress of any BDR’s trying to move leads up the grading chart and forwards to correct and timely handover AND CORRECT ACCEPTANCE by Sales!
Many Marketing Automation providers love to give stats on greater percentage increase in traffic to website! Great! Well done you! And that can be the primary KPI that they have agreed to get paid on!
But that does not mean that the inbound traffic is any good. And it certainly needs to be qualified properly by someone who knows how to qualify correctly and be disciplined in that role!
Qualified Traffic
A term brought to market and trademarked in the last 18 months by a large Marketing Automation business, aligning themselves as a strategic partner of LinkedIn.
This traffic is being supplied by an EXTERNAL VENDOR and is only as good (once again) as the refined data being used. Also in my view, how can you say inbound traffic is qualified WITHOUT any experienced voice contact by knowledgeable Sales or Marketing personnel within your business?
The company in question is just using AI and Algorithms, therefore worsening the B2B Marketers challenges of Data, Insight and Content!
CAUTION – Those companies using AI and / or Marketing Automation using the term ‘Qualified Traffic’ in my view is UNQUALIFIED AUTOMATED TRAFFIC and yet to be QUALIFIED BY VOICE (QBV).
Opportunity
Misleading. A leading global CRM vendor introduced this term into their solutions to replace the term ‘LEAD’– which for many new users, would have thrown historic lead qualification structures into at least short-term turmoil.
The claim that ‘Opportunity’ is a qualified lead or even prospect, I would see as an ENQUIRY or a 3rd party just expressing some form of interest, who has not yet been qualified by the Sales or Marketing team.
Enquiry
Some external communication, received by someone in the business – expressing an interest and probably requiring more information and usually not yet qualified by Sales or Marketing.
Lead
Intelligence that initially ticks all the boxes, especially if the refinement of primary target data has followed all the above co-ordinates correctly.
I use within my business, an enhanced BANT methodology that we call BANT+SR.
BUDGET, AUTHORITY, NEED, TIMESCALE + SALES READY! If all of these have been qualified correctly, the lead is ready to pass across to the Sales team, with an acceptance rate of 98+%!
But be careful, companies who focus too hard on QUANTITY KPI’s can force leads through to Sales when they are not fully ready for Sales to engage, therefore in some known instances where Sales REJECTION rates can be 75%+!
Now all that is required is to allocate a grade to the lead that indicates how far it is in the journey through the funnel!
MQL – Marketing Qualified Lead
If used on its own, it will be very misleading if there is no incremental scoring as to the progress through the funnel. Make sure that there are definitions against M1, M2, M3, etc. to indicate where each lead is in the journey. Some companies use MQL’s either 1 through 5 or 1 through 7, depending on how accurate they want to be through the funnel.
In my view, look at past leads and the history of their progression through the funnel. Retain the points that make most sense to you and discard others that feel too grey and can mislead others in your business.
Appointment
There are different schools of thought as to who makes the Appointment. Some companies have a policy that Sales makes the Appointments. But as businesses evolve, the division of labour comes into play on responsibility can be given to Marketing or even a 3rd party Marketing partner in charge of demand and/or lead generation.
After the financial crisis of 2007/8, I saw many of my direct competitors move from a ‘lead’ generation service delivery model, across to ‘appointment setting’ model.
This was because with the Economy falling off a cliff, market demand followed a similar course, leaving vendors with little to no new business sales pipeline.
Appointment setting was a re-invent for the Marketing sector, like Y2K turned out to be a re-invent for the IT sector. Marketing service providers were offering a delivery model of ‘appointments by volume’ and meeting targets with that set criteria. However, the vendor clients were largely receiving appointments WITHOUT PROJECTS!
Appointment cancellation rates were as high as 50% prior to the day before the appointment was due to take place! And largely the appointments that went ahead were for the new business Salespeople turned out just to be a glorified cup of coffee, with as low as just 10% of first appointments being companies with active (or soon to be active) projects!
SQL – Sales Qualified Lead
Once a lead has been passed across from Marketing and ACCEPTED BY SALES, the grade of the lead changes from MQL to SQL and a number – usually from 1 to 7 is added to the lead grade, indicating how far the lead is progressing through the Sales cycle.
Engagement
Today is 6th July, 2021. I came across ‘Engagement’ in a competitor’s proposal roughly 2 months ago and realised somebody is trying to muddy the waters yet again in the world of the B2B Marketing industry and re-invent the number of leads that they can generate in a fixed amount of campaign time and to a certain campaign budget they were vying for.
I believe, based on experiences over my 30+ year career in Enterprise Software Field Sales and Marketing, from competitor activity, that the competitor’s version of Engagement will be a lead of varying quality/grade. But they may be selling the grade (and therefore their whole campaign), to be ‘Appointment with Budget’, backed up by satisfying all elements within the BANT qualification methodology.
If anyone has a different take on this, I would be delighted to hear from you.
Suspect
Rarely used these days, but in my view covers the higher grade leads in the Marketing funnel, where the person qualifying the lead, can see from the questions they have asked the company involved, that the lead has very good potential of progressing into a solid handover with the Sales team and has got legs on to go all the way to at least the short list stage because of the high level of percentage fit in terms of their solution to the list of requirements.
Once a high-grade lead / suspect (or perhaps M6 or M7) has had the first appointment by Sales, then Sales can upgrade from Suspect to…
Prospect
A lead handed over from Marketing and accepted by Sales, first appointment has taken place, qualified correctly by Sales and is now in the Sales cycle and has great potential to stay the course all the way through to conversion into new business (these last elements heavily reliant upon the performance of Sales and pre-Sales personnel, plus functional fit to resolve the challenges of the company in question).
Account/Customer
Once you have got all the above sorted out, you can initiate a grading structure for the different ‘levels’ of leads – grading them according to where they are on the journey through the Marketing funnel. I have a glossary that can help you out with this. Just message me and I would be happy to send it to you, gratis.
WARNING – Companies with ABM strategies DO refer the simplest target data as being ‘key target accounts’ or just ‘Accounts’. Strictly speaking this is wrong – because Accounts are companies who have already become customers. So, in the world of ABM, please be careful with the terminology, Accounts means ‘target data inside the current ABM strategy’.
Dedicated Campaigns vs. Pay per Lead
1. Some Pay Per Lead (PPL) services have their limitations and there is higher risk that over time, consistency is unsustainable. PPL vendors usually have an arrangement to provide a set number of qualified leads each calendar month.
When demand drops due to external factors, be careful that PPL vendors will give you the usual Quantity of leads as per your agreement, but upon further qualification, as high as 50% of the leads are duds – because the supplier will compromise Lead Quality in favour of their monthly fees. Not every PPL service provider does this, but these drops in service are commonplace.
You may be able to all the provider out on such malpractice, but it is also costing you time in wasted Sales or Marketing re-qualification activities, to discover the dud leads in the first place and this should be a black mark against the provider for failing to be transparent with you.
2. After a successful pilot, do not award a 12-month campaign (or if you do, make sure that acceptable KPI’s take market fluctuations into consideration that will impact on lead Quantities at some point). Better to break the campaigns into Quarterly initiatives – just to give you more control over certain market and process variants that may flex or alter from time to time and to keep two-way communications between you and your supplier on an even footing.
3. Very few Marketing Agencies will give back the target data they have worked on your behalf – even in hardcopy. This is because they want to tie you in to continue to use them – without giving you the insight that you deserve to receive from all your campaigns that you pay them to undertake.
This has been standard practice by most agencies serving the UK IT Sector for decades. Data and Insight are more important than ever before, especially with Marketing Automation on the rise in popularity.
4. If an agency struggles to hit any Lead Quantity KPI, then they are more likely to be trusted to focus on Quality of Sales leads first, will not compromise their ethics and therefore have your interests closer to heart and wish to have a successful long-term strategic partnership with you.
5. You are more likely to retain higher levels of lead exclusivity in a dedicated campaign than if you follow the PPL model. Some PPL providers do not cap the number of times a single lead may be sold to other clients. Such practice distorts the market and can anger the lead source / end user organisation conducting the evaluation.
Summing Up
1. Without Voice contact - Data, Insight and Content will always be a challenge! Whoever said that ‘cold calling is dead’ is so very wrong!
Executed in a polite and professional manner – key decision makers do not mind business professionals introducing themselves and being accurate in their communications, with minimal time used. So, get your introductory pitches on point!
2. I have encountered many Sales Directors in the past that have said ‘just one deal from a campaign proves the campaign was a success!’
So why does ‘Quantity KPI’ appear to take precedence above other KPI’s? Surely 5 x great leads with 100% Acceptance by Sales, all become prospects and at least 2 convert to new business sales deals - are far better than a mixed back of 20 x leads that turn into 3 x prospects and the rest are a waste of Sales time (including some duff first appointments), rejected because they are not properly Sales-Ready?
Running ‘Quantity KPI’ risks Marketing struggling to reach target when a consistent lead flow is not sustainable. And if ‘Quantity’ has a high emphasis within an organisation, it is too tempting for lower grade leads to be passed across to Sales to pacify the Stakeholder focused on Quantity first.
3. Quality ALWAYS wins over Quantity. No vendor should rely on any 3rd party using limited voice contact in their demand/lead generation campaigns - but are heavy users of Marketing Automation and/or AI to get the results requested by their clients – because it will NEVER give full and proper insight of what is going on through 100% of any vendor’s primary target market. Ignore this at your peril!
The negative skew could be between 15% to 50% depending on vertical sector and market share of leading competitors!
4. Never compromise on Quality! After qualifying a lead and you maybe unsure what grade to give to the lead, ALWAYS grade down 1 level!
5. If you must have a Quantity KPI in place but sometimes targets are not reached, it may be that there are external forces at play outside your control. Do not shoot the messenger due to under performance that may not be their fault!
A good compromise is to move from a monthly Quantity target to a Quarterly target, that absorbs school holidays, the odd bad month generally created by outside influences, any time off for illness or a run of poor target data that needed to be cleansed, verified and qualified. Sometimes a KPI of 90 leads per quarter are easier (and less stressful) to achieve, than 30 leads per month!
A few (hopefully useful) tips!
1. Educate EVERYONE in your business – from Junior Secretary and Admin Staff right up to the Managing Director. You never know WHEN your business may receive an incoming call that is a great Lead in the making! All they need to remember is the ‘BANT’ Methodology when answering any inbound call. This gives you the potential to add significant value to your entire workforce.
2. Incentivise recipients of such inbound intelligence to QUALIFY the potential Lead correctly. There is nothing more frustrating than someone saying they think they got a lead when upon further investigation by Marketing it was just a basic request for information. But it could also be an existing client ready to place some more business and they want to speak with an Account Manager as soon as possible.
Offering a token £100 here or there to an employee’s base salary could just be the beginning of developing a little star in your business and you will be amazed at how much faster they could flourish and add further value to your business – even perhaps a junior Marketer in the making – without the need to recruit from outside. And if the lead progresses into a new business win, then a little extra bonus ‘Thank you’ for their contribution will significantly boost job satisfaction.
3. Appreciate the contribution that employee has made to your business. Recognise their achievement by making the whole company aware, so that their self-worth within the business can grow and maybe just encourages others in non-Sales and Marketing roles to also give focus to similar circumstances they may experience in the future.
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For those interested in receiving my no-strings, no-nonsense, one-page Sales Lead Glossary, do please get in contact with me directly, here on LinkedIn.
Take it from someone with 35 years combined Field Sales and Marketing experience in the UK IT Industry, having represented most of the world’s leading authors of ERP and Supply Chain solutions including many VARs of SAP, ORACLE and Microsoft with lead generation services. I am certain much of the above resonates warmly with readers of this document.
I also have a one-page spreadsheet that for Sales, quickly calculates what percentage chance one has of winning the business and highlights those areas of weakness that need to be filled to increase greatest chance of success!
These succinct and to the point documents can save companies weeks, months, if not years of wasted and confusing Marketing activity as well as boosting the ability to increase overall Sales & Marketing performance quite dramatically.
They also enable smaller organisations with limited resources to gain valuable ‘inside track’ knowledge in the Black Art of Marketing, enabling them to get on with growth and without the need of sometimes misleading external Sales & Marketing consultants who come in as interim Managers, charge the earth for their services and end up not delivering any new business or process advancement at all.
Once you have a well tried and tested sales lead grading structure in place, it is very straight-forward to add the correct measurements for accurate lead scoring that supports future business planning.
If a piece of lead terminology may be missing from this document, please add a comment or message me directly and I will happily advise as to where new ‘terms’ sit in my opinion and experiences to date and can confirm whether the term is useful or misleading (and why).