The Case for Fewer Leads: the Future of Demand Generation
I often feel like the parent that tells you how they walked uphill both ways in the snow to get to school, wanting kids to know how much better they have it with their nice warm bus that picks them up outside their house and safely delivers them to school each day.
As a long time sales and marketing veteran, I’ve found myself doing the same thing, only about demand generation.
When I started my career in the ‘70s, we didn’t have digital lists with every distinction you could think of to help identify your best prospect. I often went to the library to look up a company’s 10K (no, really). The Fortune 1000 was a great start, but I also had to spend endless hours calling companies one by one to identify leads. There was no LinkedIn, no Discover.Org with lists of titles and names of people, let alone a way to understand how they’re all connected. Instead, we’d fish with extra-large nets, marketing ourselves to whole industries with direct mail and endless trade shows in the hope of identifying our best targets for sales.
How the world has changed in my lifetime! Information is now readily available unlike ever before to help us identify our best bets. We’ve made huge strides in finding out where our prospects digitally interact. Their profile tells us:
- What organizations they belong to
- What’s important to them
- Their key priorities
Moreover, we have marketing automation engines to send targeted email content with incredible personalization and accuracy; we can see if someone takes action, a view, a click, a download, a share, an inbound inquiry. It’s enough to make you giddy. Can we get more? More downloads? More shares? More inbound inquiries?
We revel in the big numbers that hit our website, that download our assets, and share our social posts—all of which surface real, qualified opportunities for our sales team…or so we thought.
The Issue with Marketing Qualified Leads (MQLs)
As we rethink our marketing funnel, we have to ask ourselves: Are we gathering way more than we can actually digest? Are we wasting time driving volume, when we could be using all this data to better target our leads as well as nurture them? Are we listening to sales when they say the last batch of MQLs yielded few conversions?
Using the new SiriusDecisions Demand Waterfall, supported by a killer content strategy, we’ve begun to address buying groups in our target accounts and eliminate the inherent waste in our systems.
How Kapost Marketing Is Changing the Funnel
Last year, we implemented the first part of an ABM program with a goal of addressing waste and committing ourselves to providing sales with both MQLs and now, MQAs (Marketing Qualified Accounts).
This was a pretty radical shift, and it didn’t happen overnight. But as we see our lead conversion rates climb, we’re pretty thrilled. Here’s how we went about making the transition:
Step 1: Identify ICP
To begin, we revisited our Ideal Customer Profile (ICP) criteria. We worked with an analyst to align our capability to market maturity and then refined our target accounts. We ended up reconstructing how we view our sales process.
Looking at the profile of our most successful customers, we identified accounts with an above-average retention rate. Instead of only looking at size or industry segment, we also observed indications of “readiness” for our software offering. Identifying profiles with this criteria gave us more insight on not only who is more likely to close, but also find so much value in our product that they continue to increase investment as time goes on.
Step 2: Clean up the Database
Using Leadspace and Engagio, we identified the companies in our database that met the first level of profile around revenue, size, marketing organization complexity, and industry.
Unsurprisingly, these criteria alone led us to eliminate half of the accounts in our database. Armed with information, we created a data field to identify if the account first met our ICP criteria, allowing us to create an MQL requirement that made it impossible for a lead in a non-ICP account to MQL.
Step 3: Sync with Sales
No shift to lead qualification is impactful without sales and marketing alignment. When the two teams have the same objectives and can work cohesively, the lead handoff process goes smoothly and keeps customers moving down the funnel. Unfortunately, more often than not, sales and marketing don’t know what the other is doing, leading to a classic situation of the right hand not knowing what the left hand is doing.
Accordingly, we worked directly with sales to enable training, encouraging the team to include questions around maturity and readiness for our technology. The marketing team also developed content—that sales not only knew about but could also find—to educate and support specific prospects looking to mature their marketing organization.
Step 4: Rethink Marketing Metrics
When it came time to construct our quarterly goals, we doubled down on our ICP targets and committed ourselves to meeting our volume with half the targets. Why? Because that’s the volume we need, right?
After a few disappointing quarters for marketing, failing to meet our target volume of MQLs to drive the pipeline, we noticed something interesting: the pipeline was stronger than it had ever been. We were meeting and exceeding our revenue numbers without the volume of leads we were used to.
So what happened?
In January of 2016, we were producing upwards of 300-400 MQLs per month. In June, July, and August of this year, that number was down to under 200. However, using data on recycled or converted MQLs, January 2016’s bigger numbers produced over 75% recycled leads, whereas June, July, and August of 2017 produced less than 25% recycled leads with 75% converted. It was a complete turnaround!
And the best part—for a former sales woman turned marketing pro? Sales was actually happy! The sales team spent a lot less time disqualifying or attempting to reach the wrong prospect and more time connecting and nurturing qualified prospects—resulting in a real pipeline.
Step 5: Optimizing the Process
One of the most significant traits of thought leaders is that they never get too satisfied with one strategy. Sometimes you think you have a process all figured out, but the best marketers know you have to constantly evaluate and optimize your data, constantly challenging your assumptions and listening to your customer.
We constantly analyze our recycled and unqualified leads to see if any emerge as an identifiable group and discuss updating the ICP definition based on these trends.
Step 6: Geek out Over Your Results
The downstream results are amazing. Instead of a row of SDRs combing through volumes of “leads,” we have revenue quota carrying teams with lists of qualified target accounts and engaged contacts, creating enough pipeline to reach—and exceed—their number.
Modern marketing often feels bound to a constant need for new names and qualified leads at the top of the funnel. As our focus changes to ICP accounts using ABM programs, we have to update our metrics as well. Make a case for fewer leads. Focus on quality, not quantity. Resist that quest for “net new names” that don’t meet your target profile. Make converted leads your goal. Identify ICP and target effectively using content that resonates with that group of buyers. Activate and nurture those leads and contacts by producing and delivering the right content to the right customer at the right time in their journey.
Perhaps most importantly, expect your MQLs to decline. Don’t panic. You’re weeding out the chaff, not losing valuable engagement. As long as you’re constantly refining your criteria and measuring acceptance by sales versus programmatic lead scoring, you can stay the course.
No matter what the era, marketing has its challenges. What was once an issue of identifying any leads is now finding the right leads. Our ability to target has never been so sophisticated. When used wisely, we can streamline our engagement for a more efficient and effective outcome for our B2B business. Rework your funnel math based on that principle and stop generating leads for the sake of volume. The reason those goal numbers were so high is your leads sucked. Get over it and move on.
It’s a brave new digital world out there. Make it work for you.