In sales and marketing, lead generation is an ongoing hot button – and, no wonder. According to one data set, the top 20% of customers yield 150% of a company’s profits. Who wouldn’t want more of those? The proverbial struggle is not just to find customers, but the right ones who can be in your top 20%.
The same data set, reported in a 2009 AMA webinar on customer growth, noted that the bottom 20% of your customers usually cost you money. In those cases, you might be better off without the added customer base. And that’s the moral of the lead generation story: you never need to find or generate those customers who won’t be profitable.
Timely Leads
Marketing Sherpa reports that “an estimated 70-90% of leads generated by marketing are never followed up by sales.” One reason is that leads are frequently turned over to sales before they have been fully qualified. That’s not an indictment of marketing. It’s an indictment of the process. It likely took an enormous marketing effort to get the leads and prepare them in a way that they could be seen, sorted, and sent to sales in the required timely fashion.
Time is the enemy of all leads, but time is also exactly what leads need in order to be developed into full-fledged prospects. Loren McDonald of Silverpop, a marketing engagement firm, notes that there’s a “7 times improvement in sales if leads are responded within 48 hours.” But the flip side of the time equation is that sales generally won’t follow-up on leads that haven’t been qualified more thoroughly. They also don’t have the time.
The Missing Step
There’s a missing step between classic marketing and sales that is too rarely defined or assigned – lead incubation. Some call it lead nurturing. Whatever the term, the key is to find a safe haven for all leads where they can be tested, nurtured, warmed and then adopted out to sales. Part of the problem is short-term sales thinking — a request to marketing to get leads no later than “tomorrow” for a new sales burst effort.
The real problem in lead generation is a lack of planning and process. If either one is missing in a lead program, there will be wasted time, or worse – wasted leads.
Put Time on Your Side
Silverpop and other firms would argue that the solution to the time problem is software. New and improved software solutions score data to prioritize hotter prospects from colder ones. Others argue that the answer lies in creating lead midwives – real people either on the marketing or sales side who can engage the leads earlier enough to establish preliminary relationships and determine their fit with a company’s services.
Neither is an exclusive solution. Progressive firms are known to use both — scoring software and assigning staff dedicated to lead development. The problem with both is that they frequently miss the point. Both may be geared toward looking for the short-term sales potential of a lead rather than the greater opportunity of developing a loyal and long-term customer.
Some call this “customer equity.” In essence, it’s a move to get away from meeting the short-term goals frequently desired by Wall Street for the benefit of the longer-term health of the company and its other stakeholders. In the new digital world, it is simply called “building community” or “relationships.”
It’s a New Social World
All social media today is about community building. It’s a nicer label for someone who follows you on LinkedIn,Twitter, or Facebook as part of your lead group. Social media is based on the premise that there’s value in the time spent developing a community. In fact, if a sale pitch is made too soon, or too obviously in the social media realm, the community will literally shun or cast out the participant.
As the world is getting increasingly digital, the need for community relationship building is also increasing. Savvy sales and marketing people were among the earliest adopters of LinkedIn. They quickly realized the rationale behind building a digital Rolodex. And, the successful ones also saw the value in answering questions, joining groups, and leading groups rather than just “fishing” for a quick close.
Change Partners and Dance
Fishing, in general, is a horrible analogy for sales and marketing programs. Whether you believe in Catch & Release or landing the big one, no customer wants to be likened to a wet fish. Instead, lead generation, nurturing, incubation and development can be likened to a long, slow dance with sometimes difficult dance partners. It sometimes feels like a hip hopper paired with a ballroom waltz partner.
My recommendation for any organization – change the music. Find a drum beat everyone can live with, and determine the dance steps in advance. That’s called setting a process in which everyone knows who’s leading, who’s following, and when specific moves are required. Then, it’s time to Tango. If specific dancers still can’t cut it on the dance floor, it’s no longer a lead problem. It’s the dancer, and time to change partners.
Comment