You Don’t Need Leads, You Need Sales
The following article is adapted from a (virtual) fireside chat between Databowl CEO Simon Delaney and Head of Marketing Daniel Hopewell for the B2C Lead Generation Podcast where they discuss the latest trends and developments within the B2C Lead Gen Industry. You can find links to the original podcast at the bottom of the page.
It’s a curious aspect of lead generation that the ultimate end goal of the lead - that is making a sale - is oftentimes secondary to the generation of the lead itself. Indeed, more than this simply being a separation of journey stages throughout the pipeline, the habit of using leads as the metric to measure success presents a significant problem. To be clear, there is no value in a lead if that lead does not - or can not - become a sale. As such, the ultimate metric lead generators and lead buyers should be concerned with is not in fact leads generated, but the sales made from them.
So, why is this not always the case? Why does the focus on leads generated often outweigh the focus upon sales?
Perhaps it’s simply a story of bad habits being hard to break, but volume of leads has for too long been used as the ultimate indication of success. When companies see a huge volume of leads within their CRM or Dialler they assume a percentage will be turned into sales and are happy to continue with this outdated model.
This can of course be true, but there are a few significant problems with this mindset:
- The sales made from these leads is a variable
- Although quantity of leads is fairly easy to measure, quality is also a variable
- There is a siloing of marketing and sales and both have different goals
The most important thing to consider when operating this way - and indeed this idea may be used as a motivation to switch setup - is the fact the cost of low quality data bought cheaply at a higher volume will in the the long run often be greater than purchasing higher quality data in smaller volumes (even at a higher initial cost).
Ultimately, the choice to set lead targets rather than sales targets, and to operate in this way, comes from the lead buyer. But, if you are buying leads and focusing on volume of leads, maybe ask yourself the following question:
Would you rather have hundreds of sales agents trying to convert a higher volume of low quality leads that have little intent, or would you rather have far fewer agents converting a smaller volume of high intent data at a far higher rate?
Clearly this question is loaded, but the idea is simple - Switch to a lead buying process that actually aims for LESS leads coming in, but make sure you are buying higher quality leads with high buying intent and converting at a higher rate. Then all you have to do is start measuring sales instead of leads.
Wait, Why Are Marketing and Sales Are Siloed?!
As mentioned above, one of the key reasons we see lead generation focused upon leads rather than sales is the fact the Marketing and Sales Departments are often siloed. As such, they are working to different targets and this lack of single view can lead to inefficiencies.
In B2C, when Marketing are buying leads they usually go in to an ESP or an email platform whereas when Sales are buying leads they generally go into a call centre. This usually sees the two departments siloed and not working closely or even communicating with each other. The problems are compounded when leads are not converted. In that scenario Marketing NEED to be picking those leads up and placing them into nurturing in order to raise conversion rates on all leads over a longer term. However, a short term transactional focus in lead generation - as is the case when Marketing and Sales are working separately - generally leads to lead buyers and brands missing this opportunity.
The Targets They Are a-Changin’
The traditional method of buying high volumes of low quality data is becoming outdated. Smart brands are switching to a new model of lead buying which involves scaling down in lead volume and scaling up in lead quality and conversion rates. The foundation for this shift is the understanding that Sales and not Leads are key to performance. High volumes of leads as a vanity metric is a thing of the past. The future of lead generation and customer acquisition is a unified Marketing and Sales process of buying high quality leads and using Sale Rates as the ultimate metric for success.
If you are buying leads then high quality leads with high purchasing intent bought and managed with absolute transparency will be the key to unlocking growth.