Why ‘lead generation’ is a poor goal
Once upon a time, ‘generating more leads’ was a perfectly acceptable business goal. In fact, announcing this lofty objective may have even earned you a nod or two from marketing-savvy colleagues.
But not anymore. Today, ‘lead generation’ has earned a reputation as a vague and overall not-so-great marketing goal. While there’s nothing inherently wrong about wanting to generate more leads, it doesn’t cut it these days – especially when we have access to such an impressive array of reporting tools and analytics platforms.
Your competition is digging deeper, which means you must as well. That’s why we’ve taken the time to uncover the issues with lead generation and help you set better, more specific goals for your business.
— Castleford (@castlefordmedia) June 29, 2018
The pitfalls of lead generation
The primary problem with lead generation as a goal is this: while it’s great to have a bunch of prospective customers in your arsenal, it doesn’t do all that much for your business. If anything, it’s what happens next – lead nurturing and sales – that matters more.
Leads don’t equal value
When you focus exclusively on leads, you risk becoming misguided. The lead in itself is of no tangible value to your business; real customers and sales are – things that improve your bottom line. If a marketing team is using leads as their metric of success, they’re not focusing on boosting revenue for the business.
Generating more leads can misalign teams
In some cases, too many leads can make things worse for an organisation. Your sales team, for example, may become overwhelmed by the volume of leads you’ve racked up. Inundated by unqualified leads, they’ll be unable to identify those worth chasing and end up unable to move anyone through your business’ funnel.
This, of course, isn’t a great way to make your boss happy. While ‘lead generation’ may be marketer-speak for success, it won’t necessarily impress others in your company. Fluffy, non-concrete goals like this are a major reason why 80 per cent of CEOs admit they don’t really trust marketers.
In the Fournaise Group survey, the number one reason given for this mistrust was that marketing teams were too disconnected from the financial realities of the business.
— Bryan Jimenez (@BryanJimenezSC) December 2, 2017
Lead generation isn’t SMART
Marketing goals should be based on historic data and those business realities we just mentioned.
In short, they should be SMART (specific, measurable, attainable, relevant, time-bound).
Every business needs leads – that’s undeniable. But it’s important that when you set your lead generation goals, you work your way through the SMART parameters.
- SPECIFIC – What have I defined as a high-quality lead? Who is our target audience?
- MEASURABLE – How will I know I’ve succeeded? Do I have a means to measure this objective?
- ATTAINABLE – Is this possible for our organisation?
- RELEVANT – Is this goal based on business data? Will meeting this goal be beneficial to our organisation?
- TIME-BOUND – How long will I give myself to achieve this goal?
Including SMART goals in your lead generation strategy makes all the difference between a poor objective and a sound one, primarily because your efforts are focused on a specific number of qualified leads rather than chasing any prospective customer.
— Castleford (@castlefordmedia) May 14, 2018
Key benchmarks within lead generation
So if lead generation isn’t the be all and end all of modern marketing, what is?
In many ways, it’s not about abandoning lead generation altogether, but rather pursuing more meaningful metrics instead of those that don’t really drive revenue.
Using the number of leads to measure campaign success is like only focusing on traffic when gauging brand awareness. While this tells part of the story, there’s a whole lot more you can glean by looking at other website analytics.
In terms of lead generation, that means tracking the following metrics:
Marketing qualified leads (MQL) – These are people who have already expressed interest in the company, perhaps by clicking on an ad or signing up to your newsletter. While they’re not ready to buy just yet, they have more potential than others.
Conversions through the sales funnel – Rather than defining success by how many leads you get, focus on how far users move through your sales funnel. If they’re making it to the bottom, your efforts are far more effective than when they hang out near the top.
Sales qualified leads (SQL) – This represents the number of MQLs who made it through your funnel and are ready to work with your sales team. These are the leads who will drive revenue for your business.
Data quality – It’s also important to measure how much information you have on the leads in your database. The best campaigns won’t just generate leads for your business, but also substantial data you can use to focus marketing efforts in the future.
Sale complexity – How many moving parts are involved in turning a lead into a sale? A lead that remains intact throughout multiple points in the sales funnel is generally more valuable to your business.
To tell if your lead generation campaign is floundering, look at the very same metrics.
A low number of qualified leads (MQLs and SQLs), for example, is a clear sign that while you may be adding to your database, you aren’t generating the right kind of leads. Similarly, a high number of simple, small sales and users stuck in the top of your sales funnels is cause for reassessment.
Seeing the big picture with lead generation
The most important point from this article is that lead generation is just one component of business success. Remember the big picture: driving revenue and improving your bottom line.
To this end, make sure your marketing team works closely with others in the business to understand the full scope of the sales cycle.
One in four marketers don’t have any idea of their own conversion rates, according to Ironpaper. To improve their lead generation campaigns, it’s important for marketers to access data sets and analytics. That way, they can use data-driven tactics and understand what matters to the business and what doesn’t.