Lead Generation and Qualification

Every company that needs customers also needs a successful lead generation and qualification program. I work with software and hardware companies, but this is a universal truth for all customer-oriented companies. However, people’s approaches to it can vary widely, depending on their circumstances. Most of all, based on their own background and comfort level.

Lead Generation methods

There are many different ways to generate leads. PPC ads, online banner ads, SEO, print ads, trade shows, direct email, direct mail, PR, and more. It’s not infinite, but there are many methods. To some extent, the business you’re in should dictate how you go about generating leads. For example, you’re in a small, well-defined, and tightly-focused niche market. You’re selling a multi-million dollar product. In this case,  attending a trade show where all the important players gather might be your best bet. If you’re in a broader market with a low-priced product, attending trade shows may be an inefficient use of your scarce marketing budget. In this case, various forms of online marketing are likely the best approach.

Comfort level can mislead you

I find that in many cases, folks approach the lead gen and qualification process in a non-objective manner. But in the manner in which they’ve become comfortable from experience. This comfort level might have developed in the early, formative years of their career. Or possibly during their most successful period. I’ve said before that executives tend to fall back on what I call their “common business sense”. I define this as a set of internal rules developed using past experiences that they’ve come to rely heavily on in their business decision-making.

Having a stable base of beliefs to rely on can be useful and is certainly comforting. However, it can also mislead you in dynamic areas such as lead generation. This is especially true in technology-based markets. In tech markets, innovation tends to render yesterday’s rules of thumb quickly obsolete. In my opinion, one of the most important attributes of a successful senior executive is the ability to step outside their comfort zone. Especially in areas where technology disrupts a market. In these places, it’s useful to place small bets in unfamiliar areas to find new ways of creating business. Nothing works forever in tech marketing. Indeed, the newest, “least-clogged” method is often the most productive.

Place small bets on new lead generation methods

One of the great challenges of technology marketing & sales is staying ahead of the herd. Once upon a time, back in the 50’s, onsite sales visits were the order of the day. A few telesales/telemarketing pioneers started the first companies dedicated to that practice. As a consumer, you may rue the day this “innovation” occurred. But it had a profound effect on businesses worldwide and significantly enhanced marketing efficiency for certain types of products. I’m guessing that conversion rates were phenomenal back then. This particular marketing channel is much more difficult today, whether B2C or B2B.  Internet marketing as a whole had a similar effect in revolutionizing marketing.  For example,  PPC advertising was initially extremely profitable. Now that it’s a mainstream activity, it’s much more difficult to show a favorable return.

And so it goes, on and on. There is much to gain from finding the “next big thing” methodology to generate leads and customers ahead of the rest of the herd. Because of this, it’s incumbent upon tech CEOs and senior marketing and sales execs to dedicate at least a small portion of their budget to experiment with new lead gen methods. There is a tendency to want to require a solid ROI from every line item in the marketing budget. While I support this approach in general, I believe it is also critical to have a “slush fund” dedicated to discovering that next high-ROI marketing method.

Lead qualification is an overlooked process

In most companies, lead generation is a highly discussed and scrutinized process. Lead qualification is much less so. The only people possibly obsessed with it are the VP-Sales and his team. And that is generally in the context of bitching about the low quality of leads provided by outbound marketing. The most important thing to recognize in this discussion is that in most cases, there is an inherent tradeoff between the quantity and quality of leads generated. This would not be so true if your lead generation method is one of the more “traditional” methods. Say, face-to-face prospecting at a trade show. In this case, you have the luxury of “qualifying away” in your discussion with a prospect. You can tell by his/her body language and what he’s telling you how far you can go with your qualification efforts.

Modern lead gen methods require a different approach

With more contemporary and broader online marketing methods, this isn’t possible. More often than not, you’re using a form on your website to serve as your “automated lead qualification rep”. In these cases, there is a tradeoff between the number of people who will fill out the form and will also be good prospects for your product. So how do you decide whether to have a long form that filters out all but the best prospects? Or a very short form, such as name/company/email or even just email address–or something in between? The answer is quite simple:

1. Your particular circumstances – Are your salespeople sitting around waiting for leads, or spending most of their day cold-calling? This is a situation that calls for simplifying your lead form if it’s currently long and complicated. The sales folks need leads and have time for them. All those good qualification steps you’re now doing on the form can happen later in the sales funnel process. If, on the other hand, you’re already generating more leads than the salesforce can handle. And they’re either ignoring them or complaining about the quality! By all means, it’s time to use the form to filter down the lead flow to the most callable prospects. Of course, those excess leads should go into a lead nurturing program. But that needs to be the subject of another article.
2. Test, test, test – In reality, there is no perfect lead form. There’s only one that meets your company’s particular needs NOW. In attempting to optimize the lead form, don’t allow sales and marketing to continually argue about it. Create a lead form from your best joint hypothesis.  Measure whether or not the resulting leads are appropriate for your circumstances. Then iterate the form (with an A/B test vs. the old form). Finally, measure the delta in lead quality and quantity. You’ll save a lot of time and energy by reducing arguments. At the end of the day, your lead gen and qualification will be far closer to optimal.

Test & measure, test & measure

As I implied above, the single most beautiful thing about modern online marketing is the ability to make objective decisions. It’s no longer about the print ad a particular senior executive prefers due to his own biases and tastes. It’s about the hard ROI of every lead generation and qualification method. Indeed, it’s about every divisible step in these processes. I strongly recommend a comprehensive, continuous, and objective A/B testing and measurement program whenever possible.

This is sometimes referred to as Conversion Rate Optimization, or CRO. Sometimes resource constraints don’t enable you to test every item, and in some cases, it doesn’t make sense. But even today, not enough folks are conducting this type of objective program. This can greatly enhance nearly every company’s marketing results over time.  I find that the reason for this reluctance is due to fear or ignorance of not knowing where to start, far more often than a lack of resources. Today, this type of objective testing and measurement is something senior management should insist on.

So those are my somewhat random thoughts on the topic of lead generation and qualification. Am I making sense? What have been your experiences? Post a comment to fill us in.

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