Brands enhance lead generation strategies
Brands enhance lead generation strategies
A small number of good leads will always trump a large volume of mediocre or bad leads. Generating reliable, convertible leads is vital to the success of b-to-b, as well as b-to-c marketing and sales teams. Knowing who customers are and how to segment them allows organizations to quickly move potential clients through the sales funnel. While it's indisputably important to generate a large quantity of leads, the information's accuracy and freshness are what ultimately determine how many sales are made.
The value of good leads, however, goes beyond just wins and losses; knowing the difference between leads that have shown slight interest, leads that are on the verge of being closed and leads that joined an email list only for the chance to win a free iPad allows marketers to more efficiently develop and target their campaigns.
The least valuable 20% of customers drain a company's profit by 80%, while the most valuable 20% of customers generate 150% of revenue, according to Larry Selden and Geoffrey Colvin's book, Angel Customers & Demon Customers. Knowing which leads will turn into which customers allows organizations to save time, money and resources when developing their marketing strategy.
“Some people who you consider a lead are no longer in jobs or don't do functions you're trying to sell into,” notes Dave Frankland, VP and principal analyst at Forrester Research. “The next level of bad leads, which I don't think everyone is thinking about, is the right individual with the right contact information. His information may be accurate but does that mean he's good business for you to chase? People overlook this. The cost of someone like that is the amount of money and time wasted chasing [them].”
Marketers employ a broad spectrum of behavioral tracking techniques to differentiate good leads from bad leads, effective campaigns from ineffective campaigns and to establish the best way to respond in either circumstance. Analyzing email click-through, email open rates, time on site and page views are among the many different statistics accessible today to qualify leads.
Lead quality has become so important to today's marketer that it has caused some industry-wide discussion about how to determine which prospects should even be called leads. Leads can be generated by buying address and email lists, by shaking hands at trade shows, by allowing prospects to sign up for information online, among many other examples. None of these methods is infallible but each possesses its own positive attributes. Meeting potential customers at trade shows, for example, is great for conversion because those leads have spent time and money to find your business and are therefore more likely to convert. However, companies who purchase lists composed of 50,000 names are likely to touch more prospects than a few representatives at trade shows.
Peter O'Brian, VP of marketing program management and US customer operations at Xerox Corp., says an enhanced lead generation process has shrunk the number of Xerox's so-called leads from roughly 100,000 to roughly 40,000 per year. When the company began an in-depth lead qualification system two years ago that verified key lead demographic information, desired means of communication, purchasing time frame, budget and product of interest, Xerox realized that 40% of its so-called leads were “garbage,” relates O'Brian.
“There were no qualifications, no nothing,” says O'Brian. “If you're a rep and you get three leads a month and all three are garbage, you would just start to ignore the leads. So we made a commitment to the field to make sure every lead was good.”
Xerox worked with Sigma Marketing Group to determine how far along a lead was in the sales pipeline and which marketing communication method would be most appropriate. Now, leads are verified on the telephone with a telemarketer and cleansing is done upfront through email. “Our objective with email is more as a nurturing mechanism than as a lead mechanism,” adds O'Brian.
When asked what happened to the 60,000 prospects he no longer considers leads, O'Brian says Xerox sends their information out to marketing representatives so the marketers are aware there has been unsuccessful contact. Then the representative can choose whether or not to follow up with the prospects directly by telephone or to send more direct mail or email marketing materials. “The idea is nobody is left hanging,” says O'Brian.
Brian Getchell, national media sales representative for mid-market display at Yahoo, says he uses ZoomInfo to find and develop qualified leads. “We want good information on a few key people that we're trying to reach within marketing departments within larger companies,” he explains. “We usually generate a couple of leads per day. Not a huge amount. Because [for us], it's just about a quality lead.” Getchell later clarified the quote with Direct Marketing News, saying each rep generates “five to 20 leads per day. That's not a huge amount compared to jobs I've had in the past where the focus was on quantity,” he said.
Steve Tafaro, president and founder of Steve Tafaro & Associates, a business advisory firm, explains there are three types of leads. There are leads that immediately go to sales, leads that are not at all a fit and leads that must continue to be “nurtured” or developed.
“Those who need to be nurtured are the most important for marketers,” says Tafaro. “The worst lead you can get is someone who says, ‘I'm ready to make a decision'. For those leads, you're coming in as fodder, as a commodity. A great lead is someone who you can nurture. Then you can affect the sale a lot more and create value.”
Cost of bad leads
For those businesses that choose to prospect using lists, several factors need to be considered before creating a unique marketing and sales approach for each individual customer segment.
“If you go to the US Census, “there are more than 600,000 companies that started a business this year and 600,000 businesses that failed this year,” explains Kathy Sexton, VP of marketing at ZoomInfo, a provider of business profiles. “There's been 33% turnover in jobs and more than 40 million jobs listed. Six thousand people change jobs every hour. The Sales & Marketing Institute found that 70.8% of business cards collected had one or more change within a 12-month period.”