Lead Generation: The Missing Link between Marketing and Sales
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1 Preface

Contrary to popular belief, Lead Generation isn’t some magical promotional tactic that you can bolt onto a failing marketing program in the vain hope of salvaging your investment.

And it isn’t some open-ended process that has to take months to work, only for you to find out too late that it didn’t.

Rather, Lead Generation is a high-level go-to-market strategy that integrates Marketing and Sales in a way that can enable virtually any business to increase its sales, its market share and its profitability, quickly and cost-effectively, which it does through the deliberate, reliable, and economical generation of "Qualified Sales Leads” (QSLs).

By enabling a business to produce Qualified Sales Leads, a Lead Generation strategy can populate a business’s Sales Funnel with opportunities that have a high probability of closing successfully, profitably and relatively quickly. And planned and executed as described in this book, a Lead Generation strategy can therefore ensure profitable sales and market share growth for virtually any business – at the lowest possible cost and risk, with the least amount of waste and effort, and in the shortest amount of time.

Unfortunately, as a methodology for achieving growth, Lead Generation is widely misunderstood. And it is wildly mis-applied. For example, Lead Generation is often viewed as a promotional tactic, such as telemarketing, that a company can add to a Marketing or Sales initiative that isn’t generating qualified leads in order to start doing so, even though it’s probably too late. It’s also sometimes viewed as a catch-all for generating junk. And it’s even thought of as just buying a prospect list, as if that can fix a broken marketing program.

But true Lead Generation is actually a comprehensive business growth strategy that incorporates, and bridges the gaps between, the Marketing and Sales functions – improving the effectiveness and efficiency of both. It’s a reliable and time-tested approach describing exactly how revenue growth can be achieved in virtually any market, regardless of how competitive it is. And, most importantly, and for most businesses that use it, it works.

2 Introduction

According to the US Bureau of Labor Statistics, approximately 20% of all new businesses fail during their first two years. And over 50% of all businesses fail within the first five years – a trend that has been growing worse over the past decade.

More surprising, though, is that the failure rate for technology firms, particularly those receiving external funding, is far more grim. According to a January 2022 analysis by CB Insights, 70% of all startup tech companies fail – usually around 20 months after first raising financing. And they take with them to the grave an average of $1.3M in total funding.

Reinforcing this trend, the December 12, 2023, edition of The New York Times reported that over 3,200 venture funded businesses failed in 2023, losing over $27 billion in invested capital. And that’s eclipsed by the thousands of zombies that are still running around.

While creative destruction is a feature of capitalism and not a bug, a 70% failure rate in this group would seem to raise a few questions about entrepreneurial insight, if not the vetting processes of the investors and investment management communities. But it’s especially concerning when one considers the reasons cited for failure. Various analysts place the blame differently at the margins, but the primary reasons mentioned tend to fall into a few categories:

  • Not satisfying a need
  • Bad business plan
  • Lack of financing
  • Bad location
  • Inflexibility, and
  • Too rapid expansion

But does this really make sense? What Private Equity firm would fund a business that didn’t satisfy a need? Who would fund one that had a bad business plan? And who wouldn’t throw good money after good? Or move if they had to? There is obviously something else going on.

Having worked with many thousands of businesses over the last forty years, and having spoken to many thousands of business owners, investors, and solution providers, it’s evident, particularly in the last few years, that most of these companies fail, not because there’s no need for their products or services. And it’s not because they have a bad business plan. They fail because they are summarily ineffective at Marketing and Sales. And most are ineffective because they’ve bought into a model of Marketing and Sales – one that has been promoted relentlessly by the digital platforms and the Marketing profession itself – that, in most cases, simply cannot work.

So let’s talk about the elephant in the room.

2.1 The Platforms Are in Control, and There’s Almost Nothing You Can Do About It

Setting aside the dubious (and self-serving) explanations for the 70% out-of-box failure rate of PE funded companies above, there are a number of observations that can actually begin to help us understand the problem. For example:

  • Over 60% of Marketing and Sales Managers interviewed by LeadGen.com in 2021 were no longer with the same companies in 2022. In that same survey (covering about 250 firms), over 75% of the companies did not make their revenue objectives in 2021.
  • According to a LinkedIn survey, Marketing positions had an average turnover at 18 months of 60%, while sales positions had an average turnover at 18 months of 55% in 2021. And the 5-year survival rate for businesses dropped to below 50% for the first time.

Given these observations, the question one needs to ask is whether the high turnover rate among Sales and Marketing personnel is correlated to the high failure rate. And if it is (which it is), is turnover a cause of the high business failure rate, or is it an effect? Of course, this happens to be one of those questions that answers itself. That is, since it’s the job of the Sales and Marketing departments to generate revenues, their failure to effectively do their jobs has to be the cause of the business failure. And they’re simply getting out of Dodge before it’s too late.

But then, does it really make sense to blame so many different individuals for the failure of so many different businesses? Can they all be that bad at their jobs?

Arguably, they are that bad – at least insofar as generating profitable revenues are concerned. But it turns out that it’s not entirely their fault. We know this because we know, at a detailed level, what almost every one of the companies in our survey has been doing with respect to their Sales and Marketing programs. And it’s not a pretty picture.

Welcome to the “New” Marketing Matrix

The problem, it turns out, starts with Google, Amazon, Facebook and LinkedIn, along with Twitter (X), YouTube, Instagram, TikTok, SalesForce and most of the other platforms, too. But we need to go back in time to get some context and some perspective before we issue the indictment.

That is, the historical advantage to businesses, in the pursuit of growth, of the Web when it was new was that it could remove barriers-to-visibility such as the traditionally high cost of advertising and gated media access. Every business would now have “a storefront on the Internet”. And "if you build it, they will come". Building out these websites and getting visibility online were the foundations of Web 1.0, a legitimate enough enterprise from a business perspective, even if it hurt the traditional (especially print) media. After a while though, because of the large number of businesses on the Web, it became necessary for a tool to emerge - Search - that would help buyers navigate the Web and find what they needed from a veritable galaxy of potential vendors and Web sites.

The problem was, of course, that weak anti-trust laws and Section 230, as well as natural selection, allowed Google to dominate the search market. (And, at some point, perhaps some AI platform will do the same.) This meant that businesses had to kowtow to Google's algorithms - software that literally controls people's perceptions - if they wanted to get visibility and generate leads. Entire industries have since grown up around guessing what would make Google and the other platforms happy, and enable businesses to obtain a position on the first page of search results, to the point where today Search Engine Optimization (SEO), inbound marketing, content marketing, digital marketing, and the thousands of their technological progeny and enablers constitute a $200B+ industry - all just to break through the clutter and stimulate demand.

You’re Trying to Play a Game You Can’t Win

The problem is that, for most businesses, none of this works. And the reason starts with real estate.

There is, for example, on the first page of Google search results, room for only 10 or 15 organic hits - which means that 95%, or 98% and potentially 100% (in the case of scammed search terms) of the businesses that are seeking visibility online (so they can generate leads) will effectively get none. While it makes you wonder why Google's search results are paginated instead of scrollable, a study by SEMrush in 2022 showed that fewer than 0.6% of sites make it to page 1 for their desired markets because of how Google wires the game.

Even worse is if the potential buyer doesn't know they have a need, as in the case of an innovative solution. What are they supposed to even search on? At least in the days of print you could buy a quarter page ad in a Trade Journal and know that it was going to get into readers' hands; while today you could spend ten times as much money and get no visibility or leads whatsoever, simply because of some algorithm.

But businesses today are forced to play the game, and then they fail.

A similar thing happens with Facebook and the consumer market, and LinkedIn for business. Facebook, of course, dominates the traffic on the Web insofar as personal use is concerned, and LinkedIn for business. And so companies spend billions of dollars on ads on these platforms hoping to get an impression, a click, and maybe a sales lead. But given the competition for eyeballs, fewer than 1% of the companies that advertise on these sites (usually only the ones with the most money to spend) ever get a positive ROI on it. As a fallback offering, these sites are more than happy to sell you their users' data, which businesses are free to exploit using thousands of different tools, most of which are equally ineffective (while being startlingly intrusive). But the tens of billions of dollars that these platform companies rake in each year does little to help the companies who spend it, many of whom slowly and quietly go out of business.

And then there's Amazon, the retail assassin, who exploits businesses with a 40% commission, and the enablement of questionable reviews that skew results such that a business seeking a profit has little chance of thriving. And just as with Google and Facebook, Amazon’s business model encourages their vendors to compete on price, further squeezing margins. Anecdotally, we've talked to almost no manufacturers in the last few years who sell on Amazon who are happy with it. And yet it's the only game in town for many companies, most of whom – again – die in a race to the bottom.

This real estate problem forces advertisers to bid up the cost of visibility on the platforms – at least those that have traffic – while lowering their prices to marginal cost because of competition; a problem that’s made worse by the limited number of platforms, and the existing platforms’ attempts to hinder their own competitors.

For some businesses, the answer is to try telemarketing or direct marketing in order go around the platforms and stimulate demand. There are thousands of call centers to choose from, many of which are more than willing to work on a pay-for-performance or pay-per-lead basis using a semi-literate script reader and a high-speed dialer. But trying to get the attention of a real decision maker by reading a script is a fool's errand. And just because you're not paying up-front doesn't mean it doesn't cost you anything. Most companies end up regretting the time they wasted, the reputational damage, and the opportunity cost even more than the money they threw away on an unsuccessful campaign.

Even worse than the pay-per-lead scam is the siren song of the "guarantee". The reality is that there are no meaningful guarantees in Marketing insofar as getting sales results is concerned (as opposed to simply "doing stuff"). And anyone who says otherwise is usually selling you a bill-of-goods. A guarantee is usually nothing more than cheap insurance - worthless when you go to make a claim. Ponder this: If you're only willing to pay for a set appointment, and you refuse to pay just for the effort, what's to stop the agency from bribing a prospect with $250 for a half hour of their time to listen to your pitch (after which they will NOT buy), and then charging you $500 and pocketing the difference? (Nothing.) And he'll do it because you can't incentivize him enough to risk his own business on your promise to pay for the leads.

And if you think that setting "lead qualification criteria" is going to help, and you're only going to pay for leads that meet it, think again. That agency is far more experienced in gaming the system than you'll ever be. And they'll be happy to take your money until you get tired of receiving bad leads. Ultimately, the sad truth is that just because you have to offer your customers a guarantee doesn't mean your Marketing vendor can or should. But if you insist on it, as many business owners do, you’re usually signing your own death warrant.

And the so-called games that Marketing vendors play to rip customers off are endless. Do you want to get a page #1 rank on Google? It's easy - as long as you define your geographic market small enough (to the point where you can’t gain market share). Do you want to get a better response to your emails? It's easy - as long as you're willing to get your domain tagged as a spammer (to the point where you can no longer even email your customers). Do you want to get a higher PPC response? It's easy - as long as you're willing and able to outbid your competitor (to the point where you have no margin left).

We hear horror stories like this every day from the companies we talk to, and it’s the main reason they fail. Business owners look for easy answers when it comes to Marketing because that’s what everyone promises, and they buy into solutions that make no sense and that can never work. And then they fail.

Welcome to the new Marketing Matrix.

Your Employees May Be in On It

And, by the way, if you (as a business owner) think that hiring a Marketing Director is going to solve the problem, think again. They may know everything there is to know about social media marketing, inbound marketing, branding and content marketing. But are they willing to be accountable for sales? Of course not. Maybe they'll say they have no control over what the sales team does with the leads, and you'll agree. Or they'll say that their job is to get traffic, exposure, clicks, hits, and downloads, but not revenue. And you'll agree to that, too, because you don't know there’s actually a way to do it.

But did you ever wonder about why turnover among marketing professionals is almost 50% per year? Maybe they know something you don’t.

And your salespeople are no better. When you hired them, they told you that, if you can just get them in the door they can close anyone, right? How's that working out? Or maybe they're generating their own appointments, but they just can't close them because of the pandemic, or competition, or pricing, or the war, or the weather.

But don’t worry, you gave them enough of a base to hold on for a while, didn’t you?

So finally, maybe you think that hiring a Chief Revenue Officer (CRO) is going to stop the finger-pointing and solve the accountability problem. But do you really think you’re going to be able to find someone who has enough experience and expertise in both Marketing and Sales in your industry to manage both functions effectively, especially when most Marketing programs are designed to avoid any meaningful accountability? And how is this not just moving the deck chairs around on the Titanic if they’re still playing the platforms’ game?

One thing you can count on, though: As soon as people see that they're not going to make their numbers, their resumes will be back on the street. But don't worry. It's not you. It's them. Oh, but it's your money.

What’s Really Going On

The reality today is that the platforms and the Marketing industry have created a game that gives you the illusion of control, and the dream of success. And they've enabled all manner of agents - digital marketing vendors, software developers, consultants, list vendors, marketing experts, technologies, and even your own employees - to help you play, and keep you in the game. But, in most cases, if you play their game, you can never win. You might get by (unlikely, according to the statistics), but the odds are much higher that you will lose everything. The platforms will simply continue to get richer, as they are nothing more than arms dealers – and your business is simply cannon fodder. The Marketing vendors will move on to their next mark. And your employees will get another job.

Oh, and in case you’re wondering who’s paying for all this, it’s not just business owners. It’s the investors (who are often, of course, business owners). Exacerbated by the staggering amount of money floating around, it’s why the returns on savings and investments are so poor. And it’s why VC firms who used to require that 35% of their portfolio makes money are now grateful if 5% do.

The shortcomings of today’s digital Marketing and Sales model, which starts by separating Marketing from Sales, are clear and abundant. And it’s the unequivocal cause of the high failure rates. But it comes down to this: If your company is spending a lot of time and money on Marketing initiatives, and those initiatives are failing to produce enough, or good enough, sales leads; and/or if your company is spending a lot of time and money on Sales programs but they’re failing to generate adequate, profitable revenues; you’re not going to fix it by simply appending a so-called “lead generation” activity onto your current, failing strategy. You’re not going to solve the problem by putting lipstick on a pig (e.g. lead scoring). And AI isn’t going to come to the rescue because: 1) it was trained on the same flawed architecture as today’s conventional wisdom, and 2) the current channel/platform problem isn’t going away without effective antitrust enforcement.

The solution, if yours is like most businesses that we talk to, is that you’re going to have to rebuild your entire go-to-market strategy, from the ground up, based on the Lead Generation paradigm as described in this book.

Because it’s the only thing that really works.

2.2 The Lead Generation Paradigm

Lead Generation, or "LeadGen" for short, is a powerful, hybrid Marketing/Sales strategy tasked with creating Qualified Sales Leads (QSLs), thereby filling your company's sales funnel with viable sales opportunities that have a high probability of closing successfully and profitably. Planned and executed properly, a Lead Generation strategy can ensure highly profitable revenue and market share growth for virtually any business, at the lowest possible cost and risk, and in the least amount of time.

The Lead Generatin Paradigm

The Lead Generation Paradigm

What makes Lead Generation different from other approaches to Marketing starts with goal setting. As opposed to the typical advertising, digital marketing or promotional program that may have a goal of generating exposures, impressions, clicks, downloads, connections, click throughs, traffic, attendance, inquiries, responses, appointments, demos, or some intermediate KPI; or a typical marketing campaign designed to establish a brand identity, position a product vis-à-vis competition, create awareness, or educate the market, for example; the goal of Lead Generation is revenue production - often using the Expected Value of the Sales Funnel as an interim metric.

That is, while traditional approaches to Marketing almost universally demur on the subject of accountability for revenue, the Lead Generation paradigm embraces it. For example, instead of a Marketing department ceding responsibility for the achievement of a sales goal because there are too many uncontrollable variables involved in moving an opportunity through the Sell Cycle, or because the Marketing department typically has no authority to control Sales resources, or because they lack adequate tools or access to the prospect to influence the close rate, the Lead Generation paradigm offers a powerful set of tools and techniques that enable both the Marketing and Sales departments to exercise effective control and accountability - from the earliest stages of the Sell Cycle to the latest.

Likewise, instead of the Sales organization tolerating the production of Marketing Qualified Leads (MQLs) that will likely never close (or even be worth their time), an effective Lead Generation strategy drives the criteria for something to be a Sales Qualified Lead (SQL) back into the Marketing process. And it enables virtually any qualification criteria to be effectively incorporated. As a result, instead of blaming failure on the organizational gap between Marketing and Sales, or resorting to finger-pointing when the company doesn't make its numbers, an effective Lead Generation strategy enables and encourages effective collaboration between Marketing and Sales, including the rapid debugging and remediation of failing programs without having to assign blame.

Accountability in Lead Generation is based on the concept of the Sales Funnel, as described by Miller and Heiman in their book "Strategic Selling", and shown below in Figure 1. According to this time-tested approach, there pre-exist in any given market “suspects” who are "above the funnel". This can be an addressable market, a list, a target market, a population, the public, or some other pool of potential buyers. By definition, these potential buyers are initially assumed to be unaware of the vendor's existence, products or value. But through various marketing, promotional and sales initiatives some of these potential buyers (or prospects) become aware of and interested in the vendor's product or, at least, they’re identified as worth pursuing by the vendor, making them "C prospects". Then, following a series of steps in the Sell Cycle, and mirrored by the Buyer's Journey, some of these become "B prospects". And with yet more work some of these become "A prospects". And ideally with still more work some of these ultimately become customers.

Do you need more sales?

Figure 1 - Sales Funnel

In brief, what creates accountability in the process, according to the Lead Generation concept, is that every prospect in the Sales Funnel must be assigned a Potential Revenue (PR) and a Probability of Closing (PC) once they've been identified or, at the latest, once they've been qualified, as shown in Figure 2, below. The product of these two numbers (PR * PC) creates an Expected Value (EV), which is usually forecastable to be realized at some date in the future, and which, when aggregated over all prospects can generate a highly accurate monthly revenue forecast for the company. And it is this common forecast that the Lead Generation strategy – which should control both the Marketing and Sales functions – can be held accountable. And it’s what makes a Lead Generation strategy unique, powerful, self-correcting and effective.

The Linear Sell Cycle

Figure 2 - The Sales Funnel/Forecast

As potent a tool for creating accountability as this linkage of the Marketing program to the Sales Forecast (in the Sales Funnel) is, because the Lead Generation paradigm also allows flexibility with regard to the ownership of any given lead at any given time, it leverages resources, it enhances responsiveness, and it prevents opportunities from falling through the cracks. This reflects the fact that the Sales Funnel has traditionally been used as a time management tool by salespeople. And, as such, it acknowledges that there will be times when the sales team, for example, can't work on particular leads because of other priorities. And so those leads may have to be nurtured, potentially by the Marketing department or a business development function, or by someone else. But this is an easy problem to manage, using load balancing, if (and only if) everyone is accountable to the same revenue forecast.

The Sales Funnel

Figure 3 - Dynamic Ownership of Sales Leads

This is illustrated in Figure 3, above. At the beginning of the month, for example, the Sales team might work on anything that moves. But at the end of the month, when they have to make quota, they may have to prioritize working only on those accounts that are closest to closing. In the traditional model, accounts JKL, MNO, PQR and STU might be neglected towards the end of the month; while under the Lead Generation paradigm, ownership of responsibility for moving them through the Sell Cycle would switch explicitly to Marketing. Neglect and waiting are not options.

The Lead Generation approach, supported by an appropriate CRM, can easily ensure that opportunities aren’t neglected or delayed because of limited resources, changing priorities, or time pressures. And instead, it enables the company to dynamically reassign ownership of leads, and continue to move the ball forward with as many prospects as possible, as quickly as possible.

Another feature of this approach is that changing lead qualification criteria, driven by changing market conditions, competition, resource availability or clutter in the media might also require that leads get passed back and forth between Sales and Marketing for clearance, for requalification, or for implementation of specific steps that only one or another group can do. While the traditional "siloed" roles of Marketing and Sales, to say nothing of ratcheting lead ownership rules, have difficulty accommodating such contingencies, no less enabling joint accountability for revenue, the Lead Generation model encourages it. This is why Lead Generation is sometimes thought of as “the missing link between Marketing and Sales”.

We'll come back to the high-level view of Lead Generation in a moment. But next we need to take a deeper dive into the mechanics of Lead Generation.

Under the Hood

Lead Generation is a strategy for sales growth that utilizes the marketing mix, sales and sales management, information technology, media, third party solution providers and other tactics and activities to ensure the generation of qualified sales leads and the production of profitable sales revenue. As described above therefore, Lead Generation is a hybrid marketing/sales strategy based on accountability for revenue. It is not a promotional technique. Rather, it represents an approach to managing Marketing and Sales to achieve a revenue result, and it is not a particular tactic, or even a particular phase in the Sell Cycle.

While this model of Lead Generation has been around (albeit neglected) for decades, it has become increasingly important since the advent of the Internet. That is, traditionally Marketing (using techniques such as advertising, print, direct mail, telemarketing, and PR, for example) has been employed for creating awareness, branding, educating the market and, especially, generating leads (or opportunities to sell). And at least in this latter role, advertising, email marketing, and these other promotional programs have typically resulted in the production of two distinct categories of outcome: (1) actual leads, and (2) "waste" or, more accurately, a negative Return on Marketing Investment.

The concept of "waste" in marketing was immortalized in the quote attributed to John Wanamaker who said, "Half the money I spend on advertising is wasted; the trouble is, I just don't know which half." With the exponential increase in the number of media, channels, platforms, and technologies enabled by the Internet, some of which have been found to be extraordinarily ineffective by their users, many companies have discovered that they can waste virtually their entire marketing budget, resulting in historically high business failure rates. This happens, ironically, even though many of those technologies enable improved tracking and attribution.

This increase in the proportion of waste has led some practitioners to differentiate between a Marketing Qualified Lead (MQL) and a Sales Qualified Lead (SQL). Whether an MQL equates to "waste" is not subject to debate. MQLs are the very definition of waste.

The Lead Generation model, however, doesn't differentiate between an MQL and an SQL. Rather, Lead Generation seeks to only generate Qualified Sales Leads (QSLs) or opportunities, defined broadly as:

An expression of interest (typically in B2C) by or an appointment (typically in B2B) with a qualified prospect (i.e. someone who potentially 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.

Unlike the binary MQL/SQL concept, the definition of a Qualified Sales Lead (QSL) in the Lead Generation model implies that there may be a spectrum of qualification, which is another advantage of the approach. That is, what constitutes a Qualified Sales Lead can be an expression of interest, or it can be an appointment, in the Lead Generation model. And, in fact, depending on the situation, it can be something weaker (e.g. an "intent signal", or even a name on a mailing list,) or it can be something stronger (e.g. a confirmed appointment, a BANT, or even an order). What constitutes a Qualified Sales Lead, in other words, isn’t static in the Lead Generation paradigm, but rather it can also be dynamic, varying depending on a wide range of circumstances, timing and conditions, which we'll discuss in more detail below.

This variability associated with changing lead qualification criteria, as well as the typically variable effectiveness of the sales process, both sensitize the Probability of Closing (PC), and can even impact the Potential Revenue, in the Sales Forecast, making it an important yet flexible management tool. Obviously, activities that increase the Probability of Closing and/or the Potential Revenue are good, and they should be encouraged; while activities that decrease the Probability of Closing and/or the Potential Revenue are bad, and they should be avoided. But the approach enables these to be more effectively managed. Adding “temperature” (which is sometimes used as a measure of the intensity of the prospect’s willingness to pay, or WTP) to the characterization of a lead can provide additional insights into the funnel, as well, further improving management control and results.

With that as background, we can now explore the Sell Cycle and the Sales Funnel in more detail, which will enable us to understand where Lead Generation fits, and how to use it to achieve success.

Although Miller and Heiman conceptualized the Sales Funnel in the early 1980’s, many people and companies have customized it to reflect their own view of the sales process, if not to serve an alternative agenda, over the years. After developing many successful marketing, sales and lead generation programs for hundreds of different companies over the last forty years, we’ve settled on a version that covers most situations, particularly in the B2B space, which also by design aligns with several proven approaches to sales training, as well as with recent developments in understanding the “buyer’s journey”.

The Sell Cycle Overlaid on the Sales Funnel

Figure 4 - A Typical B2B Sell Cycle Overlaid on the Sales Funnel

While it’s not required to hew to this particular version (the specific steps will typically be slightly different for, say, a B2C campaign), the main thing to note in Figure 4 is that the model effectively ties together three of the most important management tools, when it comes to Sales and Marketing, into one framework: the Sales Funnel, the Sell Cycle, and the Buyer’s Journey. This is because they are, in fact, three views of the same process linked, when managed correctly, to the Sales Forecast discussed earlier. (If you can’t link them, by the way, it’s a clue that your process will fail!)

We’ll go into more detail regarding how these concepts fit together later, but for now it’s important just to get a picture of the general process so that you can understand how and where Lead Generation fits in, and how it can be leveraged to ensure success.

For example, referring to the Buyer’s Journey on Figure 4, suspects typically start out as unaware of the Vendor, and unconcerned with what the Vendor can do for them. Moving from left to right in Figure 4 through a series of steps, usually driven by an increasing awareness of need, and the value that the Vendor can offer in satisfying that need, the Buyer becomes first weakly interested in the Vendor and their products, and then progressively more strongly interested, until the Buyer decides to evaluate and (ideally, from the Vendor’s perspective) approve the purchase.

Driving the Buyer through this process (usually) is the responsibility of the Vendor who executes a series of steps, known as their Sell Cycle, to identify and target potential Buyers, promotes to them in order to create awareness and stimulate interest, qualify them, magnify the need, create urgency, fulfill their purchasing requirements, and persuade them to buy.

This, however, brings us to a core controversy associated with Lead Generation: While some marketers equate Lead Generation to the “promotion” step on this diagram, or they use the term Lead Generation interchangeably with advertising, telemarketing, email, pay-per-click or some other promotional technique, doing so is taxonomically and functionally incorrect – and it’s often intellectually dishonest. This is because the output of a promotional activity is, by definition, a promotion; while the output of a Lead Generation strategy is, by definition, qualified sales leads. And the difference could not be more stark.

For example, when expectations are set for a typical promotional program, while it’s often hoped that there will be some positive impact on revenue, it’s almost never directly held to account. At best, there may be KPIs associated with clicks, hits, views, impressions, responses, downloads, or some other metric. But most often it’s simply the placement or insertion that’s rewarded, with a nod to a KPI. Given that these KPIs don’t even exist on the Sales Funnel or forecast, there’s no way, in the traditional model, to link the promotional activity to the actual production of revenue. And therefore, promotion can’t be accountable; and second, or third order, accountability doesn’t count.

And it’s also a – if not the – major reason why many companies fail (i.e. the disconnect between Marketing and revenue), as discussed earlier.

On the other hand, the output of a Marketing initiative within the Lead Generation paradigm is, by definition, a Qualified Sales Lead – something that exists right on the Sales Funnel: as a qualified prospect who has a qualifying need, and who wants to talk to you about how you can help. Unlike a promotional tactic, a Lead Generation strategy is therefore explicitly designed to populate the Sales Funnel with opportunities that have an Expected Value, and if it doesn’t, then it has failed; while a promotional tactic is designed to push out message, and it can easily succeed in that role while failing entirely to drive the production of revenue.

While this direct connection to revenue production that characterizes the Lead Generation strategy obviously differentiates it from promotion, other differences show that it’s more than simply a matter of hobbled attribution, or even how one characterizes the output (see the earlier MQL versus SQL discussion). It is, in fact, the entire process of putting together an effective Lead Generation strategy that differentiates it from simple promotion.

Before we explore that process, which constitutes the bulk of this book, it’s important to understand how the generation of qualified sales leads (QSLs) fits into the Sales Funnel, and why the approach is so critical, beyond just the benefit of revenue accountability.

First, it should be obvious that in order to generate a qualified sales lead, an initiative usually has to do more than just make people aware, or push out content. Because you’re trying to stimulate interest, get the prospect to want to engage with you, and take some action to move the sales process forward (i.e. you want to create, at least, a C prospect, if not a B or an A prospect), it’s often necessary to understand and target the prospect’s needs, behaviors, and triggers. And in order to activate those triggers, you may need to reposition your product, brand or company. And you may also need to convert that interest into action, which often requires causing a response, which often means justifying their time, overcoming objections and inertia, and triggering a behavior. And the program will almost certainly need to qualify the leads to make sure that they’re worth the salesperson’s time. These issues, though, illustrate that the main impact zone for Lead Generation in the Sales Funnel can be anywhere in the first four, or even first five, steps of the Sell Cycle, shown below, and not just the first one or two.

The Sell Cycle Overlaid on the Sales Funnel

Figure 5 - The Lead Generation Impact Zone

In other words, a Lead Generation strategy can, and should:

  • create awareness
  • stimulate interest
  • get you in the door
  • qualify the prospect, and potentially even
  • uncover needs.

Anything less leaves money on the table, and – more importantly – is a recipe for failure.

The implications of this impact zone, and the accountability of Lead Generation, allude to a point mentioned before. That is, it’s almost impossible to append a Lead Generation “tactic” to a failing Marketing program and expect it to fix the problems, or for it to be that “just one thing we need to do” in order to get a payoff, without changing the foundations or assumptions underlying the Marketing program itself. Largely because Lead Generation is strategically supraordinate to the components of the Marketing process (and the Sales process, for that matter), but also because the assumptions underlying the latter are often deeply wrong and need to be corrected, the Lead Generation considerations either need to precede the development of the Marketing program, or (more practically) the owners of the Marketing program (and potentially the Sales program) need to subordinate their priorities to it.

This has been illustrated in hundreds of cases we’ve worked, and companies we’ve been tasked to fix, particularly since the rise of inbound and digital marketing, where a business may have spent hundreds of thousands of dollars on their Web site, SEO, advertising, case histories, collateral material, sell sheets, sales training, pay-per-click, blog posts, LinkedIn connection requests, banner ads, click funnels, conversion pages, content, emails and even telemarketing efforts, only to generate virtually no Qualified Sales Leads whatsoever. Almost to an instance, these programs were developed not with Lead Generation (or even the Sales Funnel) in mind, but as a set of tasks the company believed they should do, either under the misguided influence of a Marketing professional, an employee, platform or vendor, none of whom would ultimately be accountable for sales. And so when they try to tack on a so-called “Lead Generation tactic” to salvage some ROI, it almost always fails – because the pre-requisites and underlying assumptions were missing or fatally flawed.

And to be clear, accountability itself doesn’t solve the problem, as illustrated by the number of catastrophic failures resulting from pay-per-lead programs, commission-only sales reps, so-called “guarantees”, and back-end deals. “Skin in the game” doesn’t guarantee success; it usually just guarantees that a lot of time will pass before you find out that you’ve missed the market. And then your business goes under.

Building an Effective Lead Generation Strategy

Developing an effective Lead Generation strategy can be a complex undertaking - not necessarily in its own right so much as because the components needed for an effective Lead Generation strategy are often not done, or are done poorly, or are done in the wrong order (a huge problem), when developing a traditional Marketing or Sales program. As a result, you may not be able to just plug in certain critical components, such as a better positioning, value proposition, media plan, or even the proper features and benefits of your product, if you've already built your most of your go-to-market strategy on ones that don't work. You may have too much invested in collateral material, documentation, training, channels and sales decks, for example, and it can be expensive and unpopular to change - even if staying with what you have means failure. (Of course, as we now know, many marketers, and even many salespeople, are more than willing to fail as long as the job market remains strong.)

Building an effective Lead Generation strategy, though, almost always has to go back to the basics: an identification of the market you want to go after, the specific needs you want to satisfy, and the products and/or services you can sell to differentially satisfy them.

The Sell Cycle Overlaid on the Sales Funnel

Figure 6 - Go Back to Basics

Assuming that a reasonable business case (accounting for things like willingness-to-pay, competition, addressable market size, fulfillment cost, etc.,) either formal or informal, can be made for the initiative, the next step is to put together your:

  • Your Pre-requisites, or the basis or story on which your Lead Generation strategy will be built,
  • The Core Components, or the “intellectual assets” out of which your messaging will be constructed, and
  • Your Storefront, or your presence on the relevant and available media.

Different strategies may have slightly different requirements. But the foundation on which an effective Lead Generation strategy can then be built generally consists of the following pre-requisites:

  1. Case histories – actual cases, if available, or prospective cases, if not, for your products
  2. Needs analysis – detailed descriptions of the relevant needs, pains, problems, and unmet goals of potential buyers
  3. Applications analysis – descriptions of how the product is, or will be, used to solve the needs
  4. Economic value to the customer (EVC) analysis derived from the applications of the product or service
  5. Competitive analysis - analyses of the positioning and value proposition offered by your direct and indirect competitors.

These different documents and analyses enable you to begin to answer some key questions from the prospect’s perspective (which is the only one that matters) such as:

  1. Why someone should talk to you,
  2. Why someone should meet with you, and
  3. Why someone should buy from you.

If you can’t answer these questions in a compelling way though (persuasive to a disinterested third party), then the program is very likely to fail.

These pre-requisites then enable you to then develop the Core Components of your Lead Generation strategy, typically:

  1. Statements of value proposition
  2. Positioning statements
  3. Targeting criteria
  4. Available media and channels
  5. Initial benefit statements
  6. Screening criteria and questions
  7. Probing questions
  8. Objections and rebuttals
  9. Concrete steps in the buyer’s journey

Although some of these Core Components may seem relevant only to a cold calling program or a telemarketing campaign, or perhaps to a retail role, it turns out that they actually apply to any kind of Marketing or Sales campaign that needs to generate qualified sales leads, including digital marketing, content marketing, advertising, networking, SEO, social media or PR, to name just a few. We’ll talk about why later, but you need to create them all, regardless of the specific promotional strategy you’re planning on using, if you want to be successful.

Finally you need to establish your Storefront, using these Core Components, in order to get in the game. That is, fifty years ago you needed a listing in the Yellow Pages, or maybe a sign over the door or a business card, if you wanted to “exist” as a business. Today you need, at least, some of the following to be in the market.

  1. Web site
  2. Google Business Listing
  3. Facebook business page
  4. LinkedIn Company page
  5. Social media presence
  6. Amazon shop
  7. Email platform
  8. Advertising channels

To be clear, building out your storefront does not mean you will get any sales whatsoever – contrary to what the platforms and the marketing profession will tell you – as there are billions of Web sites that get no traffic, millions of Facebook, LinkedIn and Google business listings that generate zero revenue, and billions of social media posts that don’t go viral. Having a presence on the available platforms, even if done well, is just the entry fee. It doesn’t get you on any of the rides.

To actually make sales, you need to pay extra.

That is, to get in the game today you need to create your Pre-requisites, you need to build your Campaign Components, and you need to establish your Storefront. And while that may seem like a lot of work for nothing, it’s actually the only way to get your positioning right – without which nothing else can work.

And so while you may be able to do a lot of this in your head, only then can you promote your business and have a reasonable chance of success.

An Example from B2B

Since creating an effective B2B cold calling program presents a relatively high and comprehensive set of Marketing and Sales hurdles, it’s useful for illustrating how to develop an effective Lead Generation strategy. We’ll later show how it applies to other tactics and sectors, but every tactic in your strategy ultimately should be built using this framework if you want it to work.

That is, for example, if you’re building a Web site, it needs to answer the question of why someone should buy from you. It needs to show what “needs” the product satisfies. It needs to explain who should buy. And it needs to handle objections. And the same holds for white papers, advertisements, blog posts, emails, social media, trade show booths, Amazon listings, and more. A strategy developed using this Lead Generation methodology, however, can handle this easily.

Even with this foundation properly built, a question often comes up regarding the conversion rate, which is a major challenge for many marketing programs. For example, many programs are designed either without consideration for how leads are going to actually make it into and through the funnel, or how engagement with the prospect is going to be caused (including being caused often enough) and qualified affirmatively. And so they fail. In most cases the business will scramble to improve a low conversion rate by trying to tweak a page, a form, a process, a call-to-action (CTA) or some other content. But that also often fails – usually because conversion was an afterthought, tacked onto a marketing strategy or tactic that was flawed to begin with.

In the Lead Generation model however, the conversion problem is solved up-front – when you develop the pre-requisites, usually when you’re conducting your Needs analysis, which includes analyzing response triggers and behaviors. Therefore, it can easily be built directly into the strategy, and into its supporting tactics. Much like building a traditional DM/DR campaign, the response triggers and processes are designed in from the beginning, so you don’t have to try to fix something later that can’t be fixed. This results in qualified leads entering the funnel (instead of trying to fix them later) which is, of course, the entire point of the process.

The final consideration for this introduction is how the Lead Generation paradigm addresses both failure and success in the remaining phases of the Sell Cycle, i.e. when the lead is in the hands of the Sales team. Regarding the failure of a lead to make it through the funnel, the Lead Generation methodology is specifically designed so that leads can be passed back for requalification, regeneration or resurrection, if needed. And since everyone is working off the same sales funnel, it’s easy to do – simply change the ownership of the lead and kick it back to Marketing.

The Linear Sell Cycle

Not surprisingly, the Lead Generation model also enables you to know exactly where and why the process went off the rails. And therefore, you can usually work backwards in the process, starting from where you recognized the failure, to correct a wrong assumption or other core element; and then move forward successfully.

Likewise, when a prospect becomes a customer, the Lead Generation process is explicitly designed to enable resells and upsells, treating the customer like a prospect again, and validating the cyclical nature of the Sell Cycle.

The Linear Sell Cycle


Contrary to popular opinion in the Marketing industry, Lead Generation is not some tactic you can bolt onto a failing Marketing program in order to save it. Rather, Lead Generation is a fundamental business growth strategy that incorporates, and bridges the gaps between, the Marketing and Sales functions. It represents a different, but reliable and time-proven, paradigm about how business growth can be achieved. And, most importantly, and for most businesses who adopt it, it works.

The bulk of this book describes how to develop the pre-requisites and core elements for building an effective lead generation program, and then how to incorporate them into various marketing and sales programs to achieve success.

2.3 Clearing Up a Few Misconceptions

In putting together this Introduction, we deliberately glossed over some issues that we need to now address. Some are misconceptions about Lead Generation. And some challenge a few sacred cows that simply need to be slaughtered.

  • One area of confusion regards the definition of a "lead". That is, some people define a "lead" as the identity, and sometimes the demographic attributes, of a potential sales prospect (i.e. of a suspect) or, alternatively, as a name on a mailing list or in a database, or alternatively as constituents of an addressable market. The paradigm of Lead Generation, however, stipulates that a sales lead is "qualified" - meaning, to most users of the function (who are typically salespeople), that the prospect (i.e. not a suspect, in the Sales Funnel model) has a relevant need and is interested in talking to the vendor about how the vendor can help. There can be, and often are, additional qualification criteria (for example, BANT) that can help define a qualified lead. But a qualified lead is never simply a name on a mailing list.

  • Another common misunderstanding about Lead Generation is what it means to "generate" a lead. In that regard, it clearly doesn't make sense to spend a lot of money, or have an elaborate process or strategy, designed to "generate" sales leads if a lead is just a suspect or a name on a mailing list. At best it might require market research to discover its existence, or data entry to put the information into a database. But it wouldn't require promotion, or a qualification process, no less positioning, the uncovering of needs, the stimulation of interest, or the development of a value proposition. Despite this, many people confuse the purchase of leads from list vendors with the creation of qualified leads using a Lead Generation program. Likewise, it's also common to conflate the production of clicks, traffic, impressions, attendees or even demos with the creation of genuine revenue opportunities. While these misconceptions are often the result of promotions and misrepresentations by list vendors or other marketing solution providers, it unfortunately often results in disappointment by the salespeople tasked with trying to close them, or worse, in the failure of the business.

  • A third area of confusion regards where in the Sell Cycle Lead Generation fits, and how the success of a Lead Generation program is measured. As indicated above, Lead Generation is designed to create qualified sales leads, and fill a company's sales funnel with viable sales opportunities that have a high probability of closing successfully and profitably. As such, the goal of a Lead Generation program is not only to stimulate interest, but to assure the cost-effective production of revenue. It does this by employing a variety of tactics and tools beyond promotion, and so it involves several steps in the Sell Cycle. And it is accountable for revenue (or, at least, the Expected Value of the sales funnel), as opposed to a subordinate KPI such as clicks, traffic, demos or appointments. Consequently, it spans several stages of the Sell Cycle, at least, if not the entire process.

  • Finally, Lead Generation is often confused with a specific tactic or activity, such as telemarketing, advertising or pay-per-click. Lead generation however is a strategy, it is not a tactic or a specific activity, and therefore it is positioned hierarchically above, and broader than, its constituent plans and activities. By way of illustration, many businesses use the GOSPAM model (which stands for goals, objectives, strategies, plans, activities, and monitoring) to plan and achieve their goals. Lead Generation, in this construct, is a strategy designed to achieve a revenue objective, supported by a variety of plans and activities that can include Marketing and other Sales functions, as well. It is not a tactic or an activity.

There are certainly other misconceptions regarding Lead Generation in the literature. But as long as Lead Generation, centered around populating the Sales Funnel, is the principal consideration when developing your Marketing and Sales plans, you should be okay.

Because if it isn’t, you won’t be.

The Linear Sell Cycle

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