The Five Myths of Lead Generation
By Jeffrey Cody, Senior Marketing Manager, Campaigner®
Myths, folk tales and urban legends make for entertaining storytelling, and can even teach a lesson or two. But when it comes to the real business of lead generation, myths and misperceptions can cost you money and customers.
Myths about lead generation can lead to faulty practices and missed opportunities. Below we bust five of the most common myths about lead generation. Use our tips to debunk bad practices and craft strategies that will deliver the happy ending of leads that convert to customers.
Myth #1 - It’s all about cost per lead
Many marketing departments focus on achieving a certain number of leads at a certain cost per lead. Lead efforts should instead be focused on cost per acquisition, cost per upselling the customer, and cost per lifetime value of a customer, all worked backward into the lead generation effort. It’s easy to build a campaign that will create thousands of leads for a nickel per lead but you run the risk of none of them ever converting. You can lose thousands of nickels, frustrate your sales team and not get anything out of the program.
For example, if you have a model that says you think your best close rate is $50 per lead to get a program done, you might find an opportunity where $1,000 per lead closing at 80 percent and is worth 50x per customer. Instead of a hyper-focus on cost per lead of the campaign consider a comprehensive formula that measures the true return of your efforts.
Myth #2: Lead scoring revolves around lead source
In recent years, the emergence of marketing automation tools have led sales teams to believe that they can create millions of leads and score them initially based on “lead source.” Using these tools, sales & marketing teams score leads and then realize that they no longer like the lead source. They then change the scoring, raising or lowering the base lead source score, and it becomes a self-fulfilling prophecy.
The right way of measuring a lead should be around explicit and implicit information provided by the lead at initial sign-up. You should focus less about the source, but rather on job title, industry, the number of sales reps, or budgets. After all, if you didn’t think the source was worthy, you wouldn’t have started there to begin with. You can then follow those attributes all the way through the sales process and build a lead scoring profile. For example, you may find that CEO leads come in and close or it may be deals of a certain sales size that have a high close rate.
The inverse is when you find a certain job title that doesn’t close well, takes a lot of the sales people’s time, isn’t a high-revenue deal, has a high rate of churn or has high support costs. You can use these profiles as a part of your lead scoring to help you improve your targeting to reach more of your best leads and to assess whether to continue certain types of campaigns.
Myth #3: Landing pages produce the most leads
In the past, marketing departments used single-page Web forms with minimal information to get more out of their lead generation efforts. Prospects would be driven to these pages and forced through a call-to-action gateway before they could access any other information. There are times when this is the right action, but often good prospects, who may be more qualified than the average lead you are capturing, are turned away because they are unable to find the extra information they are seeking.
This is common when prospects find your site via a search engine. The path is determined by the type of link they click – organic or paid. The organic link would have led to your website where they would have found the information, but the paid click leads them through this forced funnel. You should treat the same person who could randomly have picked either path with the same amount of respect, especially since people want more data before giving up personal information. Educated consumers often become your best customers, so make it easy for all prospects to access information about your solutions. When you provide equal access regardless of link type, you will have shorter sales cycles, fewer frustrated leads and a better reputation.
Myth #4: Drip campaigns are a necessity
Never run a drip campaign for the sake of checking it off on your campaign list. Every time you send an email out you are welcoming prospects to unsubscribe and if they unsubscribe you have lost the ability to ever communicate with them again. Worse, you could provoke them to cancel your services, increasing churn. It is essential to find a balance between having a drip program because you know you need one (and you know it can work) and risking that really critical information, such as a product enhancement or a special promotion, may not get delivered to them because they unsubscribed four emails back.
A good strategy for drip campaigns is to adopt a “less is more” approach or a triggers-based approach. In this way you maintain communication so that prospects remember you but minimize the risk of them unsubscribing or canceling your service.
Myth #5: The Marketing team is controlling the communications stream
To make the most of lead generation, you need to have a communications plan that includes sales and marketing. Let’s say you have a free trial on your website or sign-up form and it requires sales intervention to follow-up. The marketing team creates a drip email campaign to keep the lead engaged for days zero through 30 of the trial period. But your plan has a flaw.
Your 12-email, 30-day drip campaign is not the only way prospects are getting communication. No matter what, the prospect will be contacted by the sales team. You have a controlled process in place but without considering the dynamics of the entire process you risk frustrating or losing a prospect.
In conversations with a salesperson a shift may have occurred in the prospect’s need, but your drip marketing program doesn’t reflect that need. As a result, your messaging may annoy, misinform the prospect, or lengthen or kill a sales cycle. When it comes to planning lead nurturing communications, less can be more. Use your automated tools to personalize campaigns based on real time information. This will ensure targeted, relevant messaging that helps turn a lead into a customer.
Myths and legends make for good conversation but cannot provide a sustainable foundation for engaging your customers. Knowing the difference between fact and fiction and using that knowledge will enable you to build a solid and sustainable lead generation process that delivers results.