One of the most effective methods of reaching and influencing potential buyers and convincing them to identify themselves as prospects is content marketing. But how can you tell if your online lead generation efforts are paying off? This e-book provides the answers. Learn how with this 8-page e-book Defining Success in Online Lead Generation.
In this e-book, you’ll learn how measuring quantity, quality, and cost can help you maximize your results. Readers of this e-book will learn:
* What is Effective Lead Generation
* Quantity of Leads Required to Sustain a Robust Sales Funnel
* How to Define Quality Leads
* Economics of Lead Generation
You may also benefit from receiving a complimentary marketing assessment from WinGreen Marketing Systems. We’ve helped companies like yours increase their inbound sales leads by 100% to 500% while reducing cost-per-lead by as much as 75%.
Contact us for a 30-minute, 100-point assessment at (650) LEAD GEN or at www.wingreenmarketing.com/contactus.aspx
Defining Success in Online Lead Generation -- Using content marketing to grow sales pipelines
1. [Title Goes Here]
An Informative E-book from the
Marketing White Paper Series Sponsored by
WinGreen Marketing Systems
Defining Success in Online
Lead Generation
Using Content Marketing to Grow Sales Pipelines
An Informative E-book from the
Marketing White Paper Series Sponsored by
WinGreen Marketing Systems
2. Defining Success In Online Lead Generation
The Marketing White Paper Series from WinGreen Marketing Systems
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Contents
Introduction....................................................................................................................... 3
What is Effective Lead Generation?...................................................................................... 3
Quantity............................................................................................................................ 5
Quality.............................................................................................................................. 5
Cost.................................................................................................................................. 5
Conclusion......................................................................................................................... 7
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Introduction
As 2013 is coming to a close, now is the time to
take action to be ready to gain the benefit of a
rising economic tide. As the economy improves,
technology budgets will thaw, and companies
will start to plan new purchases accordingly. The
companies who get out ahead of their competitors
stand to win the most new business. The savvy
marketing professional should be running through
the mental checklist now:
Products, services, and technologies in place?
Check.
Brand awareness programs in place? Check.
Distribution channels figured out? Check.
Sales people hired, trained, and motivated?
Check.
Sales automation and CRM systems in place?
Maybe…
Pipeline of hundreds of interested leads?
Oops.
If you’re one of the few people reading this who
honestly can say “Check” to having a CRM system
loaded with a pipeline of hundreds of leads for
your sales force, then you can save 10 minutes of
your day and skip reading the rest of the paper.
If you’re in the vast majority of marketing and
sales organizations who haven’t made consistent
use of 21st century marketing (opt-in, online, self-
identifying, warm leads, inexpensive), and don’t
have at least 100 new leads per salesperson in a
CRM system, this paper is a starting point for you.
This paper will provide you with the definitions
of effective lead generation to get 2014 off to
a running start. (Look for future papers in the
WinGreen series for tips on running effective
campaigns, tools and techniques, and marketing
assets.)
What is Effective Lead
Generation?
Effective lead generation is the successful
achievement of objectives for quantity, quality,
and cost of new business leads delivered to the
sales force for follow-up and closing. Note that all
three objectives for lead gen must be met in order
to consider the effort to have been effective.
Further, we recommend that these objectives be
mutually agreed upon between the marketing
organization and the sales organization. Too
often we see organizations where the marketing
group says “We did our part” only to have the
sales team say “We aren’t getting enough good
leads”.
Most sales organizations use a common
vernacular for describing their pipeline or “funnel”.
Typical labels describing phases or level of quality
of leads would be:
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Contact Interest Evaluation Qualified
Win/Lose
Suspect Prospect Qualified Prospect
Close/Lose
Contact Interested Lead Pre-qualified
Qualified Close/Lose
For the purposes of this illustration, let’s use the
last nomenclature1
Most business-to-business, large-ticket technology
companies (i.e. those with individual transactions
of $25,000 to $500,000) should expect ratios
approximately like those in Figure 1. Of course,
all businesses will vary from these ratios, some by
large factors. Still, it’s a useful starting point.
1 “Contacts” are known entities that may or may not
be within the target market. Examples would be badge
swipes or business cards from trade shows or contacts from
individuals’ previous jobs or perhaps purchased contact
names. “Interested” leads are people from within the target
segment(s) who assertively demonstrate an explicit interest
in learning more about the company’s products/services/
industry, but haven’t yet necessarily shown interest in a
purchase. Examples would be people who attend a webcast
on the company’s area of expertise and are from the target
segment. “Pre-qualified” is typically defined as “Interested
plus is a decision maker or strong influencer plus expresses
direct interest in the company’s product (possibly through
an evaluation or demonstration) plus agrees to take an in-
person sales appointment.” “Qualified prospects” are decision
makers with authority to purchase plus the budget in place to
purchase plus a demonstrated need for the product/service
plus an explicit agreement to make the purchase within a
reasonable (usually no more than 90 days) timeframe.
In other words, to make one technology sale
of $25,000 to $500,000, the sales organization
should expect to win one out of every five
qualified prospects, convert one out of every two
prequalified prospects into qualified prospects,
and get one pre-qualified prospect out of every
10 interested leads. The net is that it takes
100 interested leads to create a single sale.
(Obviously, each ratio can be either better
or worse at each individual organization, but
this diagram serves to illustrate the orders of
magnitude of funnel economics. )2
2 In a future companion paper, we will investigate the
“leverage” aspect of focusing on these specific ratios to
improve results. For example, just improving the ratio of
Qualified to Close from 5:1 to 3:1 reduces the number of
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Since we earlier defined effective lead generation
as the successful achievement of objectives for
quantity, quality, and cost, we can determine the
mutual objectives for marketing and sales:
Quantity
If an organization has five sales people, each of
whom is expected to close a $100,000 sale each
month, the lead generation activities need to
deliver 100 interested leads per rep into the top
of the funnel each month. Therefore the total
objective is 500 interested leads each month.
It is impossible to overstate the importance of
having the sales and marketing leaders work
together to agree on objectives. Furthermore, we
recommend a wide-open approach that involves
all constituents in defining what a “quality” lead
is, setting objectives, and agreeing to all aspects
of the lead generation function. Invite field sales,
inside sales, marketing management, copywriters,
and anyone else who contributes to the process
to work together, communicate openly, and
understand deeply what the numbers mean and
what the quantity expectations are.
Quality
We chose to use the nomenclature “Contacts/
Interested/Pre-qualified/Qualified/Closed” for our
example. Sales and marketing must mutually
“Interested” leads necessary to deliver a sale from 100 to 60.
Or, to put it another way, improving the closing ratio from 5:1
to 3:1 means that sales can double with just a 20% increase
in Interested leads at the top of the funnel (100 to 120).
agree to the definitions of what constitutes a lead
or prospect at each level of the funnel. The best
target type of lead for marketing lead generation
activity is to deliver interested leads. Contacts
– or “suspects” -- are not sufficiently interested
and will waste salespeople’s time. At the same
time, in our experience, using marketing or
an outside firm to deliver live appointments or
qualified prospects is too expensive, and often
yields questionable results, as the people tasked
with qualifying/disqualifying from interested leads
have no vested interest in the final sale, and
often “throw the prospect over the wall” to the
sales organization while claiming success. We
recommend that sales and marketing mutually
agree to define the quality objective as “leads
who have self-identified and have expressed
direct interest in what our products can do for
them… or better.”
Again, the importance of mutual definition of
“quality” cannot be exaggerated. Even the tiniest
disagreement or misunderstanding can grow into
a canyon between sales and marketing when
quota and revenue pressures mount. It’s critical
for sales and marketing leadership and employees
to get together, discuss objectives and definitions
openly, and commit to regular reviews of both
their results and their assumptions.
Cost
Traditional marketing methods – direct mail,
trade shows, and cold calling – will typically
deliver interested leads for around $675 per
lead. Online marketing methods, when executed
by experienced digital marketers, can generate
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interested leads for between $50 and $100 per
lead. Therefore, the final objective to be agreed
between sales, marketing, and (now) the budget
gatekeepers, is to deliver quality, interested leads,
at less than $100 per lead.
From the WinGreen white paper, 21st Century
Marketing for Effective Lead Generation:
The marketer of 1995
might conduct a direct mail
campaign to a list of 50,000
people at a cost of $0.75
per name and address,
$2.50 per color printed
promo letter, $2.00 per
insert, $1.00 for postage,
and $0.50 per mailing
house drop -- $337,500
for the campaign (without
the telephone follow-up,
if outsourced) – and get
a 1% response rate (500
responses). That’s $675.00
per “interested lead”.
The 21st Century marketer
prepares PDF versions
of collateral, builds
interactive, informative, drill-down web
pages, creates professional quality
video and audio, and adds 21st century
marketing assets like white papers,
podcasts, webcasts, and online surveys.
Thousands of interested potential
leads opt in to more communications.
Thousands more are offered marketing
assets in email campaigns and
subsequently self-identify. Digital
marketing assets are passed along by
recipients, leading to more opt-ins.
The typical 21st century use of digital
marketing assets allows the marketer
to conduct a campaign to thousands of
contacts, deliver them an invitation to
download a marketing asset of interest,
and receive perhaps 500 interested lead
responses for about $50,000.
Setting an objective of $100 per interested lead
is a reasonable goal for most organizations in
technology businesses. As we showed in the
above example, organizations that run in-house
campaigns very efficiently can deliver interested
leads for a cost within the range of $80 to $150
per lead.
In our example of five sales people, each of
whom is expected to close a $100,000 sale each
month, the economics of online lead generation
are quite compelling. We noted in the example
that it would take 100 interested leads (at a
cost of $100 per lead) to yield one closed sale
(at $100,000). Therefore the value of each
interested lead is 100,000/100 = $1000. Since
marketing costs are already factored into the
financials and income statements, it’s fair to say
that the incremental cost of $100 per lead yields
incremental revenue of $1000, for a return on
investment of 900%.
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Lead generation is not only an essential piece of the marketing mix and sales
inputs, but should be considered to be the starting point for achieving the
organization’s sales objectives.
Effective lead generation requires the marketing and sales organizations –
from top to bottom – to communicate openly, get in sync, and stay in sync on
objectives, definitions, and expectations. Time and time again, we’ve seen
this seemingly simple point ignored, with subsequent shortfalls in sales. If you
are a marketing professional reading this paper, get in touch with your sales
counterpart and talk about the principles discussed here. If you’re a sales
professional reading this paper and looking for more leads from marketing,
reach out to your marketing counterpart and open up a real discussion
about your needs and expectations. Wide-open communications and mutual
understanding and agreement between sales and marketing are absolutely
critical components of effective lead generation.
There are three objectives for lead generation: quantity, quality, and cost.
Effective lead generation requires that marketing and sales focus on all three
simultaneously.
When the entire organization – marketing, sales, finance, operations – is
pulling in a single direction, every stage of the sales funnel is at or above the
mutually defined goals, sales people are harvesting and closing sales at or
above their quota every month, and the economics of online marketing are
leveraged into healthy growth and profit for the firm.
Conclusion