Higher sales conversion rates and higher-value customers result in higher ROI, making it clear that lead quality counts. This survey shows that quantity is also important, but it does not necessarily improve ROI…
The survey conducted by MarketingProfs shows the importance of managing the effectiveness and efficiency of lead generation marketing, through clearly-defined objectives, better insight, closer alignment with the sales organisation, and the imposed discipline to measure ROI.
“Companies outgrowing their competitors were more likely to use conversion rate and financial performance metrics”
1. Marketers need to set objectives, definitions, and metrics concerning lead quality
35% of the marketers surveyed said their primary lead generation objective is lead quality based on sales conversion rates. An additional 25% use a measure of lead quality based on sales acceptance. The two figures combined, 60% of marketers are working toward these two lead quality objectives compared to the remaining 40% of marketers whose objectives are based around lead quantity.
“...companies who reported more effective lead generation were two to three times more likely to provide positive performance ratings in terms of enhancing leads ...”
The importance of quality over quantity lowers slightly when we look at leads definition. 52% of all lead generation marketers indicated they use lead definitions that include no measure of qualification, and just 19% define leads as contacts which are highly-qualified using the screening standards of their sales organisation.
When looking at the portion of marketers who said they operate with a lead quality objective, 39% report that they use a lead definition of either a contact name generated by marketing or any inbound responses to marketing campaigns. Both definitions are more quantity driven than quality driven.
Metrics are very important as well. Companies reporting that they are outgrowing their competitors were more likely than those with slower growth to use conversion rate and financial performance metrics. These metrics include Lead-to-Purchase Conversion Rate (40% vs 20%), Cost per Sale (36% vs 20%), and Contact-to-Purchase Conversion Rate (24% vs 15%).
Which of the following choices best describes your primary objective for lead generation?
Which of the following statements best describes how marketing defines a lead that will be passed to a sales team?
Which of the following statements best describes how marketing defines a lead that will be passed to a sales team?
Which of the following metrics are used to track marketing’s lead generation success?
2. Marketing must influence conversion rates to improve B2B lead generation ROI
“Alignment between marketing and sales has a strong correlation to marketing effectiveness and company growth”
The marketers in this survey provided their view of how the sales organisation rates their lead generation performance. This provided insight into key areas where additional marketing strategies can be beneficial.
Marketers expected their sales organisation to give the most negative ratings on their performance for: nurturing contacts (38%); followed by creating leads with higher purchase conversion rates (35%). There is, therefore, an opportunity to increase the ROI of lead generation marketing by getting more value from leads already in the pipeline.
“Marketers who use ROI and profitability metrics are more likely to report more effective lead generation marketing than companies using traditional, non-financial metrics (60% vs 35%)”
Conditioning (or nurturing) leads with additional marketing touchpoints before handing to sales provides a better quality of lead with a higher conversion rate or a purchase of higher-value solutions. In other cases, taking back unqualified leads from the sales organisation for nurturing allows the company to enhance the initial investment and reduce the cost of nurturing using expensive sales resources.
The analysis discovered that companies who reported more effective lead generation were two to three times more likely to provide positive performance ratings in terms of enhancing leads as well as supporting the sales pipeline, compared to those with less effective lead generation marketing. This correlation with increased effectiveness is a good indicator of the opportunity to concentrate on improving conversion rates in conjunction with marketing whilst leads are in the sales pipeline.
In your opinion, how would the sales organisation rate marketing on the following, using a scale from 1 for very poor, to 5 for excellent?
3. Better marketing and sales alignment
“Marketers using lead definitions that include demanding qualifications based on the screening standards of the sales organisation have better marketing and sales alignment ratings”
Marketing and sales alignment related to jointly managing lead quality is a concern for marketers. Roughly half gave negative ratings on their alignment with sales in terms of jointly analysing win-loss factors, measuring ROI on lead generation, and providing closed-loop sales tracking of lead performance. This compares with roughly one quarter who indicated positive ratings for alignment.
The knowledge gained from tracking lead performance and understanding win-loss factors is critical for lead generation marketers to help them improve lead quality using better targeting and better messages.
Alignment between marketing and sales has a strong correlation to marketing effectiveness and company growth. Companies expecting to outgrow their competitors were three times more likely to report positive ratings in all of the areas above, as well as better alignment through joint planning of lead generation. The same increased positive ratings was found with companies reporting more effective lead generation performance, over companies with less effective lead generation marketing.
How would you rate the alignment of marketing and sales on the following aspects of lead generation using a scale from 1 for very poor to 5 for excellent?
How would you rate the alignment of marketing and sales on the following aspects of lead generation using a scale from 1 for very poor to 5 for excellent?
From the sales department’s perspective, which of the following metrics are used to track marketing’s lead generation success?
From the sales department’s perspective, which of the following statements best describes how marketing defines a lead that will be passed onto the sales department?
From the marketing department’s perspective, how would sales rate marketing on the following scale, with 1 for very poor to 5 for excellent?
From the marketing department’s perspective, how would sales rate the alignment of marketing and sales on the following aspects of lead generation using the following scale, with 1 for very poor to 5 for excellent?
4. Increased ROI discipline improves lead generation effectiveness
Marketers who use ROI and profitability metrics are more likely to report more effective lead generation marketing than companies using traditional, non-financial metrics (60% vs 35%).
“Use ROI analysis and measurement to justify increased investment against high-value, high-potential leads”
Companies using marketing ROI metrics also have advantages in other areas related to greater marketing profitability. These companies are more likely to have their main lead objective as lead quality based on sales conversions (41% vs 29%). Marketers using lead definitions that include demanding qualifications based on the screening standards of the sales organisation have better marketing and sales alignment ratings. They also report a much greater use of financial and sales conversion metrics.
Summarising these findings, marketers should use the following priorities to improve their overall lead generation performance.
1.
Invest budget to improve lead quality, both incremental value and higher conversion rates. This will improve ROI, marketing profitability, and growth
2.
Improve the alignment with sales, to get closed-loop tracking and joint assessment of win-loss factors, which provide the insight to improve lead quality)
3.
Generate lead generation objectives, definitions, and metrics that include both lead quality and lead quantity. This will increase marketing effectiveness and align marketing decisions with company business objectives
4.
Find opportunities for nurturing leads prior to passing them to sales, provide better marketing support for leads within the sales pipeline. Nurture unqualified leads to achieve higher overall conversion rates from leads
5.
Use ROI analysis and measurement to justify increased investment against high-value, high-potential leads. Identify the correct budget allocation between improved quality and improved quantity.
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