August 17

When leads lie, what should you measure?

Marketing Strategy

9  comments

Thanks to Jim Berkowitz and his CRM Mastery E-Journal for pointing me to CIO article by David Tabor, “When Leads Lie.” Check both resources out they are well worth a read.

Here’s a few excerpts from Tabor’s article:

Why do leads lie? Leads lie because we think they’re saying something that they aren’t. A lead is not ready to buy. They’re typically not even ready to talk with one of your sales reps. A lead is merely somebody who indicated “tell me a little more,” by clicking on a link, responding to an email, or registering on a site.

Until the leads are cultivated, nurtured, qualified, and converted to contacts, there is no sales cycle.

So when you look at your revenue pipeline, most of the deals won’t refer back to leads. It’ll make your lead gen look less important than it really is. This goes double if you use the Named Account model of selling.

The bottom line: by focusing on sales-cycle starts (opportunity-creates) rather than leads (visibility events), you’ll be able to measure something that’s meaningful to the business and provide a solid basis for collaboration among marketing, pre-sales, and sales teams. And that’s the whole point of CRM.

Great tips: I agree with much of what Tabor has to say. He emphasizes the most important measurement to for marketers to measure is “sales cycles started” which is what I call lead-to-opportunity conversion rate. The point is your lead generation must connect with your revenue pipeline. If you’re not doing that, you’re missing a huge opportunity to improve.

Related posts:

How to do lead management that improves conversion

5 dials to tune in your lead generation process

10 Most Popular B2B Lead Generation Blog Posts of 2017

7 Tips to Boost Lead Nurturing Email Results Immediately

Ideal Customer Profiles: 5 steps to ensure your lead generation stays on target

About the author 

Brian Carroll

Brian Carroll is the CEO and founder of markempa, helping companies to convert more customers with empathy-based marketing. He is the author of the bestseller, Lead Generation for the Complex Sale and founded B2B Lead Roundtable LinkedIn Group with 20,301+ members.

  1. Great question! The universal lead definition tracks when a lead is ready to be handed to sales (aka “sales ready”) Tracking the lead to opportunity conversion rate is tracking after a lead has been accepted and pursued by sales.

    The process flow would look like this:

    Step 1: Qualified Lead – qualified “sales ready” based on universal lead definition and sent to sales to be pursued.
    Step 2: Sales Accepted Lead – sales rep actively pursues lead to determines if lead is a viable opportunity
    Step 3: Opportunity – viable sales opportunity that sales rep actively pursuing with a pipeline weighting % or $ associated

    The Lead-to-opportunity conversion rate is measuring from step 1 “sales ready lead” to step 3 “opportunity.”
    The following are real-world metrics that every marketer should track in their lead generation program:

    # of inquiries (responses to lead generation offers)
    # of qualified leads? (qualified as “sales-ready” by ULD handed to sales)
    # of opportunities? (leads that move to pipeline)
    # of closed sales? (generated from marketing leads)

    If you know those metrics you can start to track the following key performance indicators:

    * Inquiry to lead ratio and (investment-per-lead)
    * Lead to opportunity ratio and (investment-per-pipeline)
    * Lead to sale (win) ratio and (investment-per-sale)

    I hope this helps!

  2. Hmmmm…how does this strategy of “sales cycle started” impact what you call the “universal lead definition”? Doesn’t this mean that instead of defining a lead with sales you have to create a definition for when the sales cycle really starts? Could get tricky as sales will want to control that gate and marketing will need to if they get measured on it. Interested in your take..

  3. Great question! I don’t see the other measurements as “fluff.” Together they can act as a health indicator of how we’re doing. That said you’re right it still comes down to sales. Nearly every CEO has this question for their marketing team… “what’s our marketing team’s contribution to sales revenue?”

    I think marketing can be run like sales in measuring their contribution to pipeline revenue. Answering the marketing contribution to revenue question causes marketers to tie their lead generation results directly to new revenue generated. That’s a good thing.

    Who gets to define when a lead converts to an opportunity? I think sales people get to define when a lead converts to an opportunity. Why? Ultimately, sales people are accountable in the pipeline review meetings. Like it or not they get the glory and the shame. As marketers our job is to help the sales team sell by driving the sale pipeline and ultimately revenue. If marketing and sales are collaborating or “huddling” like I advocate they will understand what it’s going to take drive better results.

    That’s why I also emphasize the “universal lead definition” because it sets the stage for to build accountability by co-creating the measurements. It ensures a smooth, effective process between marketing, inside sales and outside sales—three teams that too often handoff activities rather than be accountable for results the whole system produces.

  4. First, you are great and you share so much information that we all owe you a big thank you!

    I think I did a bad job of asking the question so let me try again. If Tabor’s point is that the MOST important part of the metrics lies in the “sales cycles started” or “lead-to-opportunity conversion rate”, isn’t the rest just fluff?

    Who gets to define when the sales cycle starts or a lead converts to an opportunity? I have seen it play both way sales v. marketing and it is usually a battle over the process with both wanting to own the metrics and the results.

    What do you see as a best practice? Thanks again!

  5. On the idea of “universal opportunity definition”, I think it’s a good idea but I think opportunity definition is really in the domain of the sales rep.

    I do think marketing can help sales by working jointly to create an opportunity scorecard.

    That said, the challenge that many organizations face is that their sales process is a black box. No one except the sales team (sometimes management) really knows what is going on inside the black box until a proposal or sale happens. Worse still, our research 80% of the leads that go into the sales black box are rarely seen again. That’s why I recommended the ULD workshop and closed loop feedback huddles.

    At a fundamental level B2B marketers must understand the sales process. They should get out in the field with their sales people and they should be involved in sales pipeline review meetings.

    I’ve encountered many companies where sales and marketing do not jointly agree upon or understand their sales process. It may be documented but is it followed? At the same time many do not understand their potential customers buying process. But that’s a whole topic all together.

    All of this makes it particularly challenging for marketers who are trying to measure their revenue contribution and lead generation ROI.

    Process mapping is a well-known technique for creating a common vision and shared language for improving business results. However, this technique hasn’t been widely adopted by sales and marketing departments.

    It comes down to collaboration and team work.
    Thoughts?

    Readers may also be interested in this post I wrote on 35 ways marketing and sales can better collaborate via “huddles.”
    https://www.markempa.com/collaboration_w/

  6. Brian, great thread.

    I’ve always wondered if many marketers also need a “universal opportunity definition”, and I’m curious what your thoughts are?

    You mention that sales people should be able to define what converts to an opportunity, but we’ve found that the measure of conversion deteriorates over time. In fact, as an opportunity progresses it seems to have a half life. What does this mean to marketers? It means the stat you mention: # of Opportunities can be inaccurate if not gathered in a timely manner. Given this, we advocate that stats be gathered in a timely manner. Don’t let a sales rep that says “Lead to Opportunity Good” change his mind a month later after he forgets to follow up to “Lead to Opportunity Bad”. Thoughts?

  7. I couldn’t agree more with you. You may be thinking that they are ready to buy just from a simple registration or action that they have take, but in essence, this “Information gathering” process could take 3 days to a year, until that lead realizes that they actually need to take action.

    I use a popular CRM tool in my business, that automatically sends follow ups to any leads in the system. This way, through their entire information gathering process, they will constantly be reminded that I am here. And I don’t sell to them. I provide them with informative tips and advice on the topic that they initially expressed interest in.

    Great post!

  8. Great article. This is very true that leads need to be nurtured and we can’t just assume that a lead is a guaranteed sale. It is something that takes time and effort to transition into a sale. Very well written article, keep up the good work.

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