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The Complete Guide for B2B Marketers: The Case for Lead Generation

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Lead generation is the single most important objective of any business-to-business marketing department. This chapter defines lead generation and describes the lead generation process.
This chapter is from the book

Furthermore, the other issues keeping CMOs up at night are also heavily about leads. In Table 1.1, you can see the survey results in detail.

Table 1.1. CMO Challenges

Which of the following marketing challenges are currently most pertinent to your organization?

Percent of respondents, 2010

Generating high-quality leads

76%

Marketing to a growing number of people involved in the buying process

45%

Generating a high volume of leads

39%

Marketing to a lengthening sales cycle

39%

Generating public relations "buzz"

39%

Generating perceived value in "cutting edge" product benefits

37%

Competing in lead generation across multiple media

32%

So, it's fair to conclude that lead generation is critically important to business marketers. But, despite the importance of leads, the term "lead" is often misunderstood.

Defining Terms: What a Lead Is and What It Is Not

A lead is a prospect that has some level of potential of becoming a customer. We need to distinguish a lead from a business inquiry or from a mere list of names, with which leads are commonly confused. Mailing lists or contact lists of business prospects are often presented as "lead lists," a misnomer that generates not only confusion but even ill will in the world of business marketing. A passive list of prospects (or, more appropriately, suspects) does not deserve to be called a list of leads.

The same holds true for inquirers. Simply because someone has expressed a modicum of interest in your product or your company does not mean that person or that company is ready, willing, or able to buy. But an inquirer has plenty of value. You can continue to communicate, nurture that interest, and keep a relationship going until a sale is imminent.

Marketers must deliver a lead to the sales team only when the lead is truly qualified, and they must do so by criteria developed in consultation with the sales force. Consistent delivery of qualified leads that convert satisfyingly to sales and meet sales quotas—that is the hallmark of successful B-to-B lead generation.

The process of lead generation is fairly straightforward; however, it does involve a long and somewhat complex series of steps, beginning with a series of outbound and inbound contacts to generate the inquiry and qualify it, to handing the lead to the sales organization, and then tracking the lead through conversion to sales revenue.

The secret to success is in a focus on business rules and processes, as boring as that might sound. Lead generation and management are not the glamorous creative sides of marketing. They are more about developing the rules, refining them, testing, tracking them, and continuous improvement. This is not to say creativity cannot have impact. It can.

Many parties are involved in the process, both internal to the company and external. Each has a role and each has a share in the credit for the results. To be successful in this kind of business environment, marketers must focus on fairly elaborate planning and process development, regular consultation with sales, disciplined measurements and analysis, and constant communication with everyone.

There is a certain amount of disagreement about the "right" meaning of various terms in lead generation. In fact, there is no right or wrong. Companies and cultures tend to create their own definitions, which are passed down internally from management generation to generation. Usage also varies from industry to industry. Following are the definitions of terms as they are used in this book:

  • Prospect. An individual or company that is likely to need your product or services, but has not bought from you yet.
  • Customer. An individual or company that has made a purchase from you.
  • Inquiry. The first inbound contact from a prospective customer. It might come in "over the transom" or, more likely, from a campaign. The inquiry might also come from a current customer who seeks a refill, a replacement, an upgrade, or a new product.
  • Response rate. The rate at which prospects or customers respond to an outbound campaign. It is calculated by dividing the number of responses by the number of prospects promoted. After they are received, the responses are called inquiries.
  • Lead (also called qualified lead). An inquiry that has met the agreed-upon qualification criteria, such as having the right budget, decision-making authority, need for the product or service, and readiness to make the purchase in a suitable amount of time. After an inquiry has become a qualified lead, it is ready to be worked by a sales person.
  • Qualification. The process by which you establish whether the inquiry is qualified to become a lead.
  • Qualification rate. The rate at which inquiries migrate to qualified leads. It is calculated by dividing the number of qualified leads during a period, or from a particular campaign, by the number of inquiries in the period or from the campaign.
  • Nurturing. The process of moving an unqualified inquiry to the point where it becomes qualified. Some inquiries qualify right away. Many, however, need some nurturing via outbound communications until the prospect is entirely ready to be contacted by a sales person.
  • Conversion. When a lead becomes a sale.
  • Closed lead. A lead that has converted into a sale.
  • Conversion rate. The rate at which qualified leads convert to sales. It is calculated by dividing the number of closed leads by the number of qualified leads delivered to the sales force.
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