The Lead Management Game - Winning Or Losing?
Jun 05, 2018
The Lead Management Game – Are You Winning or Losing?
Lead Management - It's a game that all businesses need to be good at, but the question is, "Are you winning or losing?" If you're satisfied with your lead generation efforts but less than satisfied with your lead conversion, then you aren't winning. What do you need to do to improve your conversion percentages and put your business on the road to winning?
It's a good question for most businesses. And, you'll get a different answer depending on who you ask.
Marketing...We're winning, just look at all the leads we're generating.
Sales...We're losing, just look at all the crap leads you're sending our way.
Management...We're confused, who are we supposed to believe?
The problem with lead conversion is lead generation
If you ask most marketing and management people, they will say that the problem isn't with lead generation, it's with lead conversion. In fact, survey after survey says that most businesses are satisfied with their lead gen efforts, but not with lead conversion.
Wrong! The problem with lead conversion is not lead conversion but lead generation. There, I said it. And, doing so is not going to make me popular. Because every CRM and MA marketing solutions firm out there is promising you better lead conversion with their systems.
And, many businesses have swallowed this fairy tale hook line and sinker. And, they're going to attack the problem by concentrating on putting the right CRM and MA systems in place. Great, but a true waste of money if the underlying assumptions are patently false. The major assumption being that what you've put into your system and are calling a lead is a "lead." All CRM and MA systems have one thing in common, they ignore the fact that what is being put in most pipelines are anything but leads. The real problem is what they are calling leads.
If all I have is an email address and maybe a name, Bubba that ain't a lead.
What's a lead?
According to HubSpot, this is a lead for our business --
Excuse me. A student. I appreciate that fact that she's interested in our content. But, lead? Not in your dreams.
As I said at the beginning, it's what you're putting in your pipeline that is the problem and what you are calling a "lead." According to this lead management solution and every other one on the market, anyone who signs up for your content or fills out a form is a lead. No wonder you're having problems converting them.
In survey after survey, marketing executives overwhelming stated that they are more than satisfied with their lead generation, but the same proportion or greater say they are not satisfied with the conversion of these leads. Since there seems to be some difference of opinion between marketing and sales as to what is or is not a lead, that tells me that marketing is creating promotions that get people to raise their hands and respond, but the formula breaks down because the who that is responding isn't the potential sales who.
Inbound Marketing, helping or hurting???
And the whole idea of inbound marketing, post it and they will find you has made the lead generation/lead conversion situation worse. Many businesses now spend as much on inbound marketing, creating content that attracts as they do on outbound marketing. So, I ask. Have you taken a real look at what is coming through the door and ending up in your system because of these efforts? I gave one example above and we have plenty more of them and there is no doubt in my mind that if someone sits down and takes a look at what's coming through the door from your efforts, you will find the same thing. But, left to the AI managing the system, these "leads?" go right into the automated campaign flow.
Hello, do you have to get run over by a truck to figure out that there is something wrong in here?
Right now, I suggest that you stop using all the so-called lead management solutions on the market, Marketo, HubSpot, all of them and go back to basics where a living human being is involved at the beginning of the process to evaluate if what comes through the door is, in fact, a lead that should be put into the lead flow pipeline. A radical approach I know and I really don't expect you to do it. But, let's face it, unless you're marketing to consumers, most of you don't have a big enough audience for your products that an individual or two can't do the due diligence at the beginning of the process and stop depending on tech to do it for you.
We've made the process so human independent and we're depending on AI to do our thinking for us and guess what, it doesn't work. Why? Because these systems are designed for everyone, not you or your business or business model, but everyone and as such, they can't put in the decision making criteria that determine if what you're putting in your pipeline is, in fact, a real lead. Notice I said real lead. I haven't even gotten to qualified.
So I contend, if you're satisfied w/ the number of leads you're getting, but not the conversion rates, then it's what you're putting into the pipeline that is the problem. And that's the crux of the problem and always has been. And it's exacerbated by all the so-called marketing automation, customer relationship management tools out there, that have people filling up databases and pretending to follow some sort of planned process to qualify and then convert leads.
Let's face it, we've gotten to the point thanks to the tech industry that anything that comes through the door is considered a lead. That wasn't the case before tech and automation took over. And, it wasn't the case before the tech industry starting defining marketing terms for us, including "lead."
For example, look at the HubSpot dashboard; they tag every visitor to your website as a lead. It's ridiculous and many businesses have fallen for it hook, line and sinker.
I've been down this road before and have tried to explain to management and marketing personnel alike that just because someone visits your website, downloads your content, or clicks a few pages that it does not make them a lead. I will go so far as to call them an inquiry which we do call them in our lead management system. Whether it's an automatic download or a request, it's an inquiry, someone inquiring about something you're offering and nothing more. Do they have a reason or business-related reason for inquiring? Maybe, but it's just as likely to be idle curiosity. And, until proven otherwise, you shouldn't be treating it as a lead.
And, if you think the Walt Disney and Mickey Mouse filling out your lead forms is a lead you're really smoking crack. I just love getting automated email campaigns personalized for Walt Disney.
Now, you have to make a decision, do you want volume so you can say you're generating leads or do you want quality and by quality I mean, a real "lead."
Let's define what a real lead is.
It's someone/some business that has a need and is looking for a solution to fill that need. So, the first thing you have to determine is, does that person/business have a need that what you're selling can fill? Notice, I didn't say "qualified lead," because the first step is to get a real lead then qualify them as to whether or not they really need and can afford the solution you're offering.
Right off the bat, you eliminate the idly curious, the accidental visitors, the information collectors, students (if they're not your target audience) and competitors.
What's left should be a real "lead." And, if you are doing it right, you should know whether or not the lead is a fit for your solution before you even go to the next steps. You know what you're selling and you also know that it's not a solution that every person/business needs or can afford to buy.
You know what types of consumers or businesses buy your products. You know their demographics, psychographics, firmographics, lifestyles, etc. You hopefully know all of this about your customers and target prospects, so if the prospect doesn't fit the profile, you know you are wasting your time even considering them a lead.
Now that you've defined what a lead is, the next step...qualification
The next step is to qualify that lead. Does the type of product/solution you're offering fill that need? It may be from you or from your competitors, but they are looking for a solution to a problem that what you are offering provides the solution. For example, they might be looking for an accounting package which you sell as part of your ERP solution, but the prospect really only needs Quickbooks. They are a lead because they are looking for an accounting package. But, they are not a qualified lead because they only need QuickBooks and not your ERP solution.
An inquiry has been generated from a marketing activity, outbound or inbound. If you're using targeted outbound marketing activities and generating respondents, the chances are that the respondent will, in fact, be a real lead. The same can't be said for inbound marketing activities which generate respondents from wherever. Remember, an inquiry is someone who may have an interest in your type of product who responded to either an outbound or inbound marketing activity. Depending on the source, you may need an entirely different qualification process.
The fundamental lead qualification process
Step 1 - The first step is determining that the inquiry is, in fact, a lead, notice I didn't say qualified lead. That's the next step. So the first question is do they have a need? If they do have a need for your type of product/solution, then you can consider them a lead.
Step 2 - Determine if they are a qualified lead. A qualified lead is someone who has a need for your type of product/solution and fits your target customer profile.
Step 3 - Determine if the qualified lead is an opportunity. An opportunity is someone who fits your target customer profile has a need for your type of product and potentially can afford your product and is involved in the decision making to purchase your product/solution.
Step 4 - Determine if the opportunity is a qualified opportunity. A qualified opportunity is someone who fits your target customer profile, has a need for your solutions, can afford your solution, is involved in the decision process to purchase the solution and has a time frame in mind for purchasing the solution.
Whether you use the above terms or marketing qualified, sales qualified, sales-ready, the process is the same.
We've gotten to the point that we judge the quality of a lead based on the content and amount of content they download. It might be applicable for certain B2C product/services, and even some B2B, but not the majority. If it were, then everyone would be overwhelmed and happy with the lead flow and conversion.
Does CRM work?
Well, it depends on who you ask and what you mean by work.
The primary reasons for buying a CRM system are for improved efficiency, contact management, lead generation and lead nurturing. And, the truth is that you don't need a CRM system to do any of these.
In fact, in one survey, sales executives said that their companies require them to use a CRM system to track their activities, but 78% admit that they only "check the boxes." And, 79% believe CRM systems don't always capture or provide the information needed to close bigger and higher margin deals. So much for lead management.
Lead conversion requires a plan and I don't mean an automated email flow plan, but a plan that covers the whole processes and all the steps, digital or otherwise. We've abdicated the throne and decided that CRM systems and their AI can do what a person can't do or doesn't have the time to do, and that's utter nonsense. The old adage applies, you get what you pay for. If you don't want people involved then you're going to have to put up with less than satisfactory lead conversion because no AI out there today and maybe even into the future will be able to do the analysis a person can.
The real problem with CRM is that many organizations using it don't have a lead management strategy with a plan and processes and practices in place before going out and acquiring the systems. They expect their CRM and MA systems to add processes which they will now follow even though they never developed a disciplined approach to lead management. Once again, technology comes to the door and says, hey we have the answer, buy our CRM system, and the algorithms will do all the work.
You need to have the processes in place that would operate even if you had nothing but 3x5 cards to operate off of, and god forbid that old communications vehicle of direct mail and the phone. Very few, and I've worked with a lot, companies take the time to sit down and lay out their lead management strategy, processes, procedures and resulting plans of operation.
If you have already purchased your CRM system and MA along with it, then you can certainly improve their functionality by sitting down and laying out a detail lead management roadmap. We have done this with clients and the programs put in place have been very successful.
To illustrate an example of a program, see the linked guide to developing a lead management program in the list of tools at the bottom of this article. It is an example of one program that we developed for a client in the energy industry. The example plan is detailed from start to finish. And, I might add that this program would work with or without a dedicated system. As I said earlier, if you can't do it with 3x5 cards then there is something wrong and it's too complicated and won't be used or followed by the sales and marketing teams. The software is not only there to store data, but also to eliminate or reduce the need for repetitive tasks. In other words, make you more efficient and consistent.
If your CRM and MA aren't producing the results, then it's not the applications, it's the fact that regardless of the dictates of the applications, you are not following the processes and that's either because they don't fit your business/industry or your people are just going through the motion of checking boxes.
When marketing and sales professionals were asked the question "Does sales follow up with marketing generated leads immediately, the answers were:
- 33.5% always
- 49.1% most of the time
- 14.9% sometimes
- 2.5% rarely to never
You might ask the question, why not? Why aren't 100% of the marketing leads being followed up on immediately? The answer from sales would most likely be "The leads are worthless." And, I would have to agree with most of them, most of the time. It's anecdotal and funny, that I've seen that marketing people with sales backgrounds have tended to be more effective in creating programs that generate real leads than marketing professionals with no sales background. Maybe because they have been on the receiving end and know first hand what it is to deal with marketing-generated leads.
Not all CRM / MA and SFA systems are created equal and not all, regardless of what the developers tell you, are tailored to fit all industries. It's a case of shoehorning a size D foot into a size B shoe in some cases. But you don't know this because you didn't go thru the process of laying out a complete contact, nurturing strategy along with the processes, procedures in place to make it work.
The CRM system is only as good as the data you feed it and the fact that most salespeople go through the motions rather than embracing the tool because it represents a true value speaks volumes about the effectiveness of CRM systems. And another old adage applies here. "Garbage in is garbage out."
Poor lead conversion is the result of generating leads that are not a "real" lead for your business or product/solution. It means that you need to go back to the drawing board and objectively define what constitutes a "real" lead. It means not leaving the identification of what is or is not a lead up to a CRM or MA or another system. It means not defining a lead by the amount of content a person downloads. It means human oversight at the beginning of the process, someone screening what comes through the door. It means having a well thought out documented plan and processes from lead generation through closing and follow up on a sale. It means that marketing and sales should have a common definition of what constitutes a lead for the business.
Approach to building a successful lead management program
- Develop a common and agreed upon definition of what constitutes a lead and what it becomes as it progresses through the lead management / nurturing process. What is a lead, a marketing qualified lead, a sales qualified lead, a sales-ready lead, etc. (whatever terminology you use.) Develop your own B.A.N.T. chart.
- Rip apart all of your sales, marketing, support, etc, processes that at any point are involved acquiring, converting and closing a sale. Decide what data needs to be collected on prospects every step of the way to help facilitate not only the nurturing but also the sales activities. You don't want sales just checking boxes, you want the data to be usable and actionable by all departments involved.
- Document every touch point and every step in the process. This plan should be lead source specific, because inquiries/requests for information or content may be different based on where they come from, outbound, inbound, targeted email / direct mail, social media, etc.
- Write your process plan and get organizational wide approval and acceptance.
- Select a CRM / MA system that supports your processes and if you've already purchased and installed a system, make the appropriate modifications to fit your processes and practices.
Tools to help you develop more effective lead management programs from lead generation through nurturing to close of sale:
White Paper - Developing a lead management program
White Paper - Lead Flow Planning
White Paper - B2B Lead Generation Best Practices
White Paper - Lead Scoring, Prioritization, Routing
Brochure - Lead Pipeline Forensics Program
Brochure - SalesGen2020 Program
Dudley Stevenson, founder and CEO of DWS Associates, has over thirty-five years’ experience in consumer marketing, business-to-business marketing, and direct marketing, including developing, planning, and implementing go-to-market strategies. He's also the author of "Marketing Direct: Breaking Through The Clutter." Working with organizations ranging from start-ups to Fortune 100 companies, he and his team have helped clients such as IBM, Sony, Neiman Marcus, Arizona Highways, Marshall Field & Co., Mrs. Field’s, UNICEF, and Patagonia implement successful direct marketing programs. A longtime member of the Direct Marketing Association and the American Marketing Association, Stevenson is also a sought-after speaker. He’s given hundreds of presentations and workshops on marketing and direct marketing. His “Marketing Planning 101” workshop alone has reached more than 100,000 marketing and sales professionals.