We live in a world obsessed with leads. But are they really worth your time and money? Does sales really care about the magnitude of leads that marketing generates? Let’s take a look at this to see if potential customers have the impact we’ve been brainwashed to believe. (Spoiler alert: they don’t.)
What is even a potential customer?
Is it an email offer? A rich email? An MQL? An incoming request? …Yes. Basically, a potential customer is anyone who shows interest in your offer. However, whether it’s collected from form submissions, a purchased list, or an event, less than 1% of all leads convert to sales. When nurtured, 20% more convert to customers. (About 1.2%). They don’t sound very good to us. It then converts them to an MQL for delivery to sales. The average conversion rate from lead to MQL is 31%, which is decent. However, how specifically tailored is your lead score to meet MQL quotas, rather than delivering high-quality leads to sales?
There’s no denying that incoming requests are the “hot leads” that sales are eager to receive. Unfortunately, 57% of the buyer’s journey is completed before completing a form. 77% have already fully defined their needs and know what they want. So you don’t even get a chance to frame your prospect with your product or service in mind, which means your business is less likely to win.
Also, it is insane that there is no universal definition of a marketing lead. How do we get obsessed with something that we can’t even define correctly?
Where does this obsession come from?
To put it briefly, 16 years ago, marketing automation became all the rage for collecting leads. SEO, landing pages, and form optimization became everything. However, since 2015 lead generation has been declining. Don’t panic, it’s ultimately a good thing! It has given way to its cooler, younger and more savvy cousin – more targeted and effective account-based marketing (ABM). Which brings us to the next point …
What could we possibly measure instead of leads?
If leads are no longer your primary revenue target, what should you focus on to measure success? And how can you optimize your program to create more qualified leads, faster?
Focus on account-based marketing as much as you do on collecting leads, and eventually as your program matures the focus shifts to these four ABM pillars:
New business generation Pipeline acceleration Customer retention Customer expansion
Leads are great, but when less than 1% of them convert to customers, it’s an unreliable indicator of revenue performance. Our 2020 State of ABM report found that mature ABM programs are generating 78% of all sales opportunities and 73% of revenue without actually touching potential customers. Only 10% of mature ABM programs consider “leads” a top three performance indicator. Your favorite sales teammate would rather have ten leads than a hundred leads. And yes, we challenge you to ask yourself.
Stages in the life cycle of modern merchandising equipment
Think of the 4 stages of the ABM life cycle as a pipeline rather than a funnel. Get rid of the traditional marketing funnel and start measuring these stages. But first, decide your target accounts. A target account list is the number of accounts that you target when you run a coordinated campaign. You can optimize your target accounts by:
Run a content audit and diversify your segments
Learn more here about how to measure and optimize your target accounts.
In the first stage of lifecycle awareness, leverage intent and firmographic data to deliver highly relevant messages to your most suitable future customers through targeted display and social advertising. This generates initial interest and outperforms competitors competing for the same attention. Start creating smaller segments and associating custom messages, and you can see big increases in performance from display ads. Our research team found that industry- or person-specific ads perform twice as well as normal display ads and account-specific ads perform five times better.
Opportunities created are accounts that engage with your brand (both digitally and in person), show interest, and are rated as a legitimate income opportunity.
This is where the magic happens. By sharing engagement data in real time with your sales team, as a marketer, you can alert them to which accounts are seeing those ads and take action. Your sales team can then reach out to you, trusting that these prospects are already familiar with your brand and solution.
Here, you deliver personalized mid-funnel content to buyers to streamline the sales process. By aligning relevant content and creativity with discrete sales stages, you can automatically segment accounts at each stage of your opportunity cycle.
Customer Retention + Expansion
In the final stage, create adjusted customer segments based on customer data. Organize and group customer segments by NPS scores, product usage, contract renewal dates, or even contract type. With these customer groups, marketers can implement product best practices and usage applications for customers who are not using your product as much as you’d like.
What’s easier: chasing leads or accounts?
Still not convinced that chasing leads is creating your entire team unnecessary extra work with less results? While we could spend all day convincing you, this is our answer in a nutshell. You have to work really hard to nurture a group of weak (no offense) potential customers who aren’t even the people who approve of your product or service. It’s much safer to determine your ideal future customer ahead of time and market it to your purchasing committee as a whole, rather than just one person.
“But my CMO, CFO, CEO, will not let me stop measuring prospects.”
Of course, leads have been the main measure of marketing success during a hot minute, and changing this deep-seated tactic won’t be easy. You will need to convince your revenue leaders that ABM is much more powerful and effective in growing a business. If they resist, try these rebuttals:
Anyone can generate leads – that’s not what revenue leaders want. They want a predictable pipeline that produces amazing results – that is, big bucks and happy, loyal customers. An account-based approach is a much more efficient acquisition engine. Focus on fewer accounts and create higher profits. The numbers don’t lie. Potential customers won’t stop coming, but you no longer have to depend on them. If your competitors perfect ABM before you, it’s too late. That is why you must become an early adopter. ABM produces a superior end-to-end customer experience. Let’s face it: everyone wants to feel special. ABM forces you to dig deep, learn what each buyer really wants, and deliver a personalized shopping experience that’s hard to ignore.
For more information, check out our new interactive e-book.