How Much is That Lead Worth? In The Internet Age, Not All Leads Are Created Equal: The SLMA

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How Much is That Lead Worth? In The Internet Age, Not All Leads Are Created Equal

Lisa Cramer, President, LeadLife Solutions | Articles > From the section: Lead Management

December, 2014 |

Today, leads flow to marketing from ever-increasing online sources—email campaigns, the company website, Google AdWords and Google searches, Webinars, online advertisements and blogs—as well as from traditional marketing activities such as print ads, direct mail, trade shows and networking.

The sheer volume of leads, or "suspects," can be overwhelming. How does marketing prioritize all these suspects and determine which ones to:

Send immediately to sales
Move to telemarketing for qualification and appointment-setting
Keep and nurture with e-newsletters, drip marketing and other activities

One thing we do know is that not all leads are created equal, making lead scoring crucial for marketers so that we can determine the readiness of prospects and prioritize them for appropriate action. Increasingly, automation is key since spreadsheets and calculators simply will not do the job given the volume of leads and their varying sources, interactions and demographics. Marketers simply do not have time to crunch numbers as well as craft innovative campaigns with compelling messages and eye-catching images.

As marketers, we used to gauge the success of our marketing campaigns by simply measuring the hits on our website, and the opens and clicks on emails. But in today's world we know that the times are changing. The current business climate, as well as the way prospects now buy due to the vast amount of information available on the Internet, are forcing us to change the way we market products and services. Therefore, the analytics and metrics that we use to track and evaluate marketing programs must change, too. This is not to say that analytics regarding the hits on your website are unimportant, or that you shouldn't track clicks on an email. However, those metrics are no longer the end point, instead they are merely the beginning of real marketing analytics.

Adjusting Marketing Analytics to the Way We Sell

We now know, for example, that most prospects that come to your website are not yet ready to buy. These days, prospective customers are out on the Internet researching what they need, what is happening in the market and who offers what long before they are ready to purchase. For this reason, as marketers we must change how we track and score prospect behavior in order to determine when a lead is truly a lead and is ready to be passed on to sales. As part of this, we must also identify ways to nurture early leads into "sales ready" buyers.

Again, we aren't suggesting that clicks, hits and inquiries are not important metrics. But for marketing departments to truly perform their jobs with regard to lead generation, they need to account for so much more. It's fairly easy (even free) to get an application hooked up to your website that gives you the statistics on visitors, pages visited, duration, etc., and most email programs will provide the basics of opens and clicks. So these metrics can and should be tracked today.

However, pressures are mounting on companies to maximize their marketing ROI and—as noted earlier—increase their ability to pass "sales ready" leads to the sales force. What this means is that marketing must be able to recognize which leads are ripe for picking and which still need more time on the vine—and then grow those leads accordingly. Effective lead scoring is a way to make the determination of how ripe each lead really is.

Tracking and Managing Leads Through the Lead Life Cycle

The money you spend on lead generation should show a return and yield a very strong ROI related to sales and revenue. This money should be evaluated so it is continually applied to the highest yielding program(s). Marketing should look for every way possible to maximize their lead generation and nurturing dollars. Similarly, they should look to continually increase the amount of revenue generated per campaign. To do this, they must gain visibility into individual programs to determine the number and quality of leads they generate, their conversion rates, and how many of those leads ultimately transform into closed sales.

But how can marketing easily do this? It's not as if marketing departments have tons of extra people or endless funds available.

As noted previously, increasing the value of your lead generation dollars also includes ensuring that leads being handed to expensive sales resources are indeed "sales ready." How do marketing departments help the company to not only maximize their sales resources (who are focused on selling), but also give their sales department confidence it can remove the need for them to generate their own leads? According to CSO Insights' Sales Performance Optimization Study of 2008, salespeople are generating 50% of their own leads. That is a very expensive proposition for any company and raises the question—what is marketing doing?

To this end, marketers must find a way to track and manage leads through the lead life cycle. This requires the visibility to drive leads, track leads, evaluate leads, determine when leads are "sales ready", and determine when they are not. Additionally, marketers must take the responsibility to nurture those leads that are not "sales ready" to maximize the value of what they've spent on their lead generation dollars.

Some industry benchmarks suggest that leads must be continuously "touched" before they close. At least 80% of leads close after 5 contacts and in some cases that number is closer to 9 – 11 touches. If you as a marketer are assuming that the value of your lead generation dollars comes from one email blast or a month of AdWords, then you're not on the right track to understanding how to increase the value. Nurturing leads (through multiple contacts or touches) as part of your lead generation programs will increase the return of your lead generation dollars.

Implementing Automated Processes

So, how do you enable your organization to increase this value (money spent on lead generation), start tracking marketing analytics you haven't before, understand which leads are worthy to be passed to sales and which are not? Marketers need to incorporate systems and processes in order to help them. We aren't suggesting huge overwhelming situations. There are simple things that can be done little by little to help give you visibility into the quality of your leads.

Implementing a lead management system within your organization enables marketing to evaluate and score every leads' interaction (online and offline) with your company. Based on this behavior, the system automatically prioritizes the lead to determine the most appropriate next step to move the lead through the buying cycle. In this manner, it becomes much easier for marketing departments to quickly see that all leads are not created equal, and to make the right determinations on how to proceed.

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