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For many businesses, Lead Generation - "LeadGen" for short - is more than just a Sales or Marketing function. It's the critical path item. This is because having an effective Lead Generation program - tasked with producing "qualified sales leads" - often determines whether a business will ultimately succeed or fail. [more]
To understand Lead Generation, and the fundamental role it plays, though, we have to set the context.
In short, the principal goal of the Lead Generation function is to produce "qualified sales leads". These are opportunities where there is a reasonable and manageable chance for a company to successfully close a profitable sale.
If you've spent any time in Marketing, then you certainly understand the implications of this definition. That is, this definition implies that there's no such thing as an MQL, or an SQL, for that matter. And, in fact, it turns out that those are just nonsense concepts made up by Inbound Marketing people to justify getting paid to produce junk. And the only thing that matters, when it comes to generating leads, is whether the lead is worth the salesperson's time and effort, or not.
Depending on the situation, a qualified sales lead can be defined as an appointment with, or an expression of interest by, a qualified prospect. That appointment can either be formal or informal. It can be verbal, by email, by telephone, by mail, by RFQ, or in person. A qualified prospect is generally someone who has the ability to buy, who has a qualifying need (i.e. a need that you can fulfill), and who wants to talk with you about how you can help. There may also be attributes of urgency, budget and/or authority that contribute to the definition, depending on the situation.
The issue, for most businesses that invest in Marketing, is that if the lead doesn't actually don't want to engage with you, the process is, pretty much, a waste of time and money.
The process of generating leads often involves, at a minimum, the following objectives:
Along the way, the Lead Generation process often includes steps to qualify the prospect, i.e. to assure that they're worth the time, expense and effort needed to sell and serve them. But the LeadGen process essentially follows the classic AIDA sales model, which stands for Attention, Interest, Desire and Action, albeit with the additional front-end step of identifying potential prospects.
Given the objectives of the LeadGen process to generate qualified sales leads, there are often dozens of strategies, tactics and activities that can be employed, either directly in support of these objectives, or ancillary to them. For example, a LeadGen program can include market research, list acquisition and clean-up, branding, content and case history creation, articulating value proposition, positioning, advertising, promotion, PR, telemarketing, pre-qualification, Web or eCommerce site development, blogging, CRM customization or implementation, DM/DR, sales training, strategy development, pricing, customer service, packaging, collateral material development and more. This is because of the pivotal role that Lead Generation plays in the achievement of the company's revenue goals - so everything's on the table. And just as important, if the pieces don't all fit together under one process or conceptual framework like Lead Generation, then it's highly unlikely to work. So there are sometimes Project Management and other accountabilities, including accountability for revenue, often built in.
The LeadGen model provides, therefore, a convenient and effective tool for Market planning. And it is often the only practical framework for debugging a failing Marketing or Sales program.
To be sure, an argument is made in the industry that trivializes Lead Generation, relegating it as an afterthought behind other, arguably more prestigious, Marketing functions such as content creation, Web site development, advertising or branding. The problem with this view is twofold. First, defining LeadGen down to, say, telemarketing or a direct mail program, makes an assumption about what tactics should be employed, and it's probably going to turn out to be wrong. Second, and more important, it doesn't make sense to have a process designed to generate qualified sales leads that is subordinate in a strategic plan to one of its own constituent tactics.
Ultimately though, as we'll see, the only way to achieve accountability throughout the business development process is with a cross-functional hybrid process, like Lead Generation, that covers both Marketing and Sales. And that's the most compelling reason to use it, and focus on Lead Generation as a critical part of your strategy.
Unfortunately, there are many misconceptions about Lead Generation, and about Marketing and Sales in general (including conflating Lead Generation with tactics such as telemarketing or advertising), that contribute to companies failing, or at least to their missing their revenue growth goals. [more]
Prominant among the myths and misconceptions associated with Lead Generation, in particular today, are these:
You can learn more about some of the myths and misconceptions in Marketing and Sales here. But clearly there's something missing - not just with the definition of Lead Generation, but with Marketing and Sales in general today.
A shortcut to understanding Lead Generation, its role and its value, is that if your Marketing programs are producing unqualified leads, and/or if your Sales program can't close enough sales, there's something wrong with your strategy - not just with your marketing mix. The specific cause will usually be unique to your company. But the solution can often be found in Lead Generation - a process that not only fills the gaps between (and within) your Marketing and Sales functions, but is supraordinate to them, shown below. [more]
This is shown graphically above, where you can see: (1) the trivialization of Lead Generation by practitioners of Marketing 2.0, (2) the sanctification of Lead Generation / Qualification as a way to repair a broken Marketing program, and (3) the view of Lead Generation as an actual strategy.
As you can see, thinking of Lead Generation as a Marketing Mix element makes no sense because it isn't an actual technique, although it's widely viewed that way by Marketing professionals. And hoping that Lead Generation can somehow bridge the gap between Marketing and Sales is just a way for them to avoid accountability.
On the other hand, running your business using a Lead Generation strategy is precisely what's needed to drive revenue and profitability.
The need to consider a LeadGen approach is usually motivated by a failure somewhere in the Sell Cycle. But it becomes critically important when everybody does what they're supposed to do and yet - somehow - the company fails to meet its revenue goals. [more]
Classically, when a company fails to achieve its revenue goals, everyone will claim that they did their job. They'll say that either someone else on the team didn't do their job (i.e. finger pointing), or that management didn't allocate enough resources to do a job that needed to get done (i.e. blaming the boss). This can manifest in a number of ways:
This lack of accountability is equally acute among the service providers.
As they say, success has many fathers; but failure is an orphan. And so the problem remains: How do you get it to actually work? And how do you create an accountable process?
To be clear, assigning KPIs, or demanding that employees or vendors put some "skin in the game," doesn't solve the problem. Given the current state of Marketing and Sales there are simply too many moving parts, and too many opportunities for escaping responsibility, to assign accountability. The process itself has to create it.
And Lead Generation - with its focus on generating qualified sales leads - is the answer.
To understand Lead Generation as a strategy - what it is, why you should implement it, where it fits, and how to execute it effectively - it helps to start by framing Lead Generation within the context of your company's Sell Cycle, with a typical B2B example shown below, overlaid with the levels in the Sales Funnel.
A Typical B2B Sell Cycle, Overlaid on the Sales Funnel Model
As described by Miller and Heiman in their classic book "Strategic Selling", for most businesses the goal of Marketing and Sales is to get prospects into the top of the sales funnel (or, in the version above, on the left), and have profitable, closed sales come out the bottom (i.e. out the right side, above). [more]
Overview of the Sell Cycle
The sales funnel concept is best understood, and therefore best leveraged, when seen from two perspectives: the Buyer's perspective and the Seller's perspective.
As seen from the Buyer's perspective (in the top row), the process usually starts out with an assumption that potential Buyers are unaware of the Seller, and are unconcerned with what the Seller can do. Through a series of Marketing and Sales activities on the Seller's part that we'll discuss in a moment however, the Buyer becomes initially interested, then more and more interested, until they get to the point where they decide to consider, and hopefully buy, the Seller's product.
To cause that to happen the Seller usually needs to do several things. They usually need to identify potential Buyers, they need to create awareness through some sort of promotion, they need to stimulate interest with some kind of hoook, qualify potential Buyers, and engage potential Buyers in a conversation so they can together uncover needs and build value, eventually increasing the level of interest to the point where the prospect decides to buy.
These two threads come together in the steps of the Sell Cycle, shown in the middle track above, which are:
This approach, which is derived from the Consultative, SPIN and Solution Selling models, should be viewed flexibly, rather than as a strictly linear process. Also, while how a particular Seller uncovers needs, creates urgency, and builds value is beyond the scope of this discussion, ultimately all the steps will typically need to be done in order to achieve success.
Where Lead Generation comes in is in initiating and driving the front end of the Sell Cycle. That is, if a company needs to produce 'qualified sales leads' - opportunities where there is a reasonable and manageable chance for the company to successfully close a sale, then all four initial steps at the front-end of that Sell Cycle, at least - (1) creating awareness, (2) stimulating interest, (3) getting in the door, and (4) qualifying the prospect - should be done using an integrated Lead Generation strategy.
Without an integrated approach and the accountability that it enables, you can easily end up with finger-pointing, and a failure to achieve your revenue goals. In fact, arguably, accountability for the quality of that effort also extends LeadGen's role even farther into the Sell Cycle as a secondary focus. [more]
To be clear, "demoting" Lead Generation to the status of an activity or tactic, say, by equating it with promotion or telemarketing (as opposed to its true function of tying together Marketing and Sales) ignores what most companies expect and require of the function: the generation of "qualified sales leads" that have a reasonable chance of closing. In fact, Lead Generation is not only the higher-order process shown above, but it's the only approach that can work.
Ultimately, of course, if you don't care about the quality of the leads then there's no real reason to adopt this model. But lacking excess demand and excess capacity, a Lead Generation effort that includes lead qualification is essential.
From the perspective of the tools that a business typically has available (shown in the bottom row), the Lead Generation function often involves targeting (e.g. market research, list selection, media buying, content development), promotion (e.g. advertising, telemarketing, social media marketing, SEO, events), lead qualification (e.g. conversioning, screening, questioning), and engagement (e.g. appointment-setting, demos) - after which the opportunity is usually placed in the hands of a salesperson to continue the lead's journey through the Sales Funnel (unless it gets kicked back). [more]
Designing an effective Lead Generation program usually involves applying certain proven Marketing and Sales principles to the business's unique sales and marketing situation. But developing the strategy tends to be the easy part. The challenge, at most companies, is that people working in functions such as marketing, advertising, IT, and sales will tend to resist subordinating their authority and perspective to this Lead Generation paradigm, or even to the discipline of the Sales Funnel.
One reason this happens is that Lead Generation, as a function, is often seen as less glamorous or less important than, say, inbound marketing or content marketing - even though they're actually tactics that fall entirely within the Lead Generation process.
Another common source of resistance is that the term "sales lead" has been trivialized by the list vendors, with people often confusing a "qualified sales lead" with a "name on a mailing list".
Finally, an additional push-back occasionally arises when companies hire a Chief Revenue Officer. Not surprisingly, companies often hire a CRO because they're not making their numbers, their marketing programs aren't producing adequate qualified sales leads, or there's a lot of finger-pointing between Marketing and Sales - the very same reasons for adopting the Lead Generation model. But there are two problems with hiring a CRO to solve the problem. First, while CROs are expected to have experience and training in both Marketing and Sales, rarely is their training and experience adequate. (Conferring the title accomplishes nothing.) Second and most important, the problem isn't the need for mediation between departments; the problem is usually that the company's Marketing and Sales strategies are flawed. Complicating this is that there are just more gaps between Marketing and Sales today than been have ever existed before, primarily because of the digital techniques and technologies that are ascendant. And then there are ancillary issues surrounding the Marketing and Sales functions, as well as accountability issues, that a change in personnel, or management structure, or even a change in strategy, can't fix. What's needed is a different way of looking at the problem - a different paradigm.
On the other hand, if a company is unable to achieve success due to a failure in the Sell Cycle, and the failure isn't just due to poor execution, adopting the Lead Generation paradigm is the most reliable, easiest and most effective way to solve the problem - even if it requires changing personnel.
Ultimately, there are two primary reasons why the LeadGen process enables accountability where other approaches fail. First, as shown above, the LeadGen process is linked, by definition, directly to specific steps in the Sell Cycle. And, equally important, the Lead Generation process holds itself accountable for the downstream requirements of the Sell Cycle, not just simply to its own phase's deliverables. Second, the principal KPI of the LeadGen process is the Expected Value (EV) of the Sales Funnel - which is effectively the company's sales forecast, as shown below.
If the LeadGen function can accurately predict revenues (in addition to actually creating opportunities), this represents a major risk reduction for the enterprise. [more]
Given the approach described above, it's worth noting that the Lead Generation function can also address many critical issues in the later stages of the Sell Cycle. This can include Covering Bases by finding additional needs, uncovering and addressing hidden objections, finding additional decision makers and decision influencers, resurrecting leads, and driving resells and upsells.
In short, an effective Lead Generation function is uniquely capable of creating opportunities and driving them into and through the Sell Cycle - the lifeblood of any business.
And when it comes to Sales and Marketing, that's the only thing that matters.