Do you find it startling that many sales and marketing teams still cannot agree on the definition of a sales lead?
The irony of course, is that the deliverable for sales is crystal clear – the sale. The contract is signed and the PO received. The heavy lifting from sales is finished and that of accounts receivable begins.
But for marketing, whose key deliverable is often the qualified lead, the picture is confusing: the definition of a sales lead can be all over the map. Is a lead an appointment or a qualified lead (or both)? Is a lead an inquiry, a trade show visitor, a webinar registrant, a downloader of a white paper or a referral?
To some, a lead is defined as an interested responder. To others, a fully qualified BANT lead (Budget, Authority, Need, Timeframe).
A poorly defined lead is one symptom of a crippling disease: sales & marketing mis-aligment (see my post on ten signs that sales and marketing are mis-aligned).
In the simplest possible terms: a lead is a prospect that sales agrees to accept, engage and close. Best-in-class sales & marketing organizations will add richer criteria to the definition, but the willingness of sales to accept a lead from marketing is elegant in its simplicity.
It also takes into account an important distinction: the definition of a lead may vary by the sales rep. For example, a new sales rep with no sales funnel may accept ‘loosely’ defined leads versus a sales rep who has a full funnel who will only accept ‘strictly’ defined, fully-qualified leads.
Unfortunately, the term ‘lead’ is frequently taken out of context by the vendors that sell to B2B marketers. This may artificially enhance the perceived value of the vendor’s solution but adds to the malaise and confusion in the market.
Ask yourself after reading the examples below and apply the simple acceptance rule: can you fathom a field salesperson accepting these ‘leads’?
Data Vendors – A significant number of data vendors continue to merchandise their lists as ‘leads’. Nothing could be further from the truth. These are lists of ‘Accounts and Contacts’.
CRM Vendors – Most CRM solutions have separate buckets for accounts/contacts and leads. Although I agree that leads need a home in the CRM system, the lead bucket seems to be a dumping ground for all flavors of inquiries and marketing responders. A more applicable label would be ‘Prospects’
Marketing Automation Vendors – A popular and vital process in the demand generation process is ‘lead nurture’. I agree that this is an easy to understand term for describing the cultivation of prospects until the prospect is sales-ready. However, these contacts are not leads but are prospects that are not yet ready to speak to sales. At one time, some of these prospect may have spoken to sales and subsequently disqualified. A better term would be ‘Prospect Nurture’.
It is important for marketing to under-promise and over-deliver to sales. It makes sense to ask their vendors to do the same.
Call me a stickler if you want, but until we see greater success in sales and marketing alignment and in particular, lead definitions, we need to be a lot more careful in the way that we throw around a pivotal term like ‘lead’.
Otherwise, it becomes one of those four letter words.
Your thoughts?
Photo Credit: Ash-rly
12 Comments
Robert, this is SO true! When sales and marketing can both agree on what a "lead" is, only THEN can their marriage be successful. Until then, marketing shovels everything over, sales cherry picks through it, and each is frustrated with the other.
Great point made about the variances between sales rep. The new guys just want a bucket of golf balls to hit, the older ones tend to want the golf balls placed on the tee for them only on days with no wind.
Thanks for sharing!
Chris
Hi Robert,
Great topic for discussion. Although I have to say that I've been in some lead definition workshops lately with both marketing and sales and it's not as easy as it sounds. It gets even more difficult when you consider the fact that the majority of nurturing responsibility still falls to the sales side.
What I often see is salespeople who cannot articulate true qualification factors beyond – "Tell me if the lead has a funded project and is willing to talk to me." These are usually the ones who have the least faith that marketing can deliver what they need.
Sometimes you get lucky and get salespeople who are really helpful about defining characteristics of leads with high qualification potential. You get targeted insights you can work with.
The biggest challenge then is in helping marketers determine just how their nurturing programs, content and interactions will help them identify these factors. The strategy and framework is often an afterthought.
Most commonly, marketing will say they know exactly what sales needs. Then sales comes into the room and what they say doesn't match up with those assumptions.
Until we resolve the differences in perception between the two I think you'll continue to see a sales lead identity crisis…
Thanks for the post.
Ardath
I like that this discussion about the lead identity crises considers the situational aspect and is not trying to promote a one size fits all solution.
I would like the add the aspect of having a common set of performance indicators for sales and marketing. This lowers the risk for a "throwing over the fence and forget" mentality and it shortens lengthy discussion what the perfect lead ought to be.
Great post and comments. Let me add a twist. Lead definitions are fluid. Sometimes sales cares more about "activity" and other times more about "opportunity".
"Activity" based lead defintiions often occur when you have just introduced a new product and need to talk to anyone and everyone. Or, when you have a significant number of new sales reps and need to get them out there talking to prospects as quickly as possible.
"Opportunity" based lead defintions often occur when you have a mature and stable product and sales organization that want well qualified leads that have true potential.
I agree with Brian Carroll when he talks about the need for sales and marketing to have consistent huddles to discuss this topic becaue the requirements of sales are often fluid and they need to communicate that effectively to and with marketing. Just MHO.
@ Chris – thanks for the comment and highlights.
@ Ardath – Agreed that this is not an easy process to reach consensus and more importantly, a workable framework for lead generation. Thanks again for your blog comments.
@ Christian – Further to your comment, I believe that lead definitions should be customized to account for external factors such as the maturity of the target market, buyer attributes etc. One example I like to give is a program that we ran targeting CSOs (Chief Security Officers). It is practically impossible to get CSOs to discuss pain points with telequalification. The lead definition should reflect this.
@ Trish – I like the lead typology that you shared. Fluidity is needed to reflect situations like that noted above but also to ensure that the lead generation function continually improves with learning from sales and feedback from the market. Thanks for your frequent comments on this blog.
I think that your post is very insightful. I think one of the problems, though, is the term leads. The fact that we have this amorphous concept of a 'lead' breeds confusion around the definition.
I've been thinking a lot about this issue, and it strikes me that the problem is a corporate-centric view of what is going on. When, in fact, what we're trying to do is align with a buyer's cycle and support that buyer's movement through the cycle — i.e., operating in a buyer-centric fashion.
This is something that was highlighted in a piece following a conversation I had with Meg Heuer at SiriusDecisions. She thinks the whole idea of a 'sales funnel' is wrong, and in the piece we talked about what she means by that:
http://www.silverpop.com/blogs/demand-generation/b2b-marketing-strategy/so-the-nature-of-the-b2b-buyer.html
I think a better approach would be to identify the activities and interations your organiation has with a buyer, and the process they go through. Then you can identify when sales is naturally engaged, and then identifying which part there and upstream marketing should concern itself with.
Then, instead of some 'ill-defined lead' concept, you can talk in terms of buyers at different stages, and — given your earlier mappings — you can clearly understand who should engage with what buyer at what stage. With the goal being stewarding buyers through their own process.
Then alignment is natural, rather than artificial. And buyer-centric, versus corporate-centric.
Yes, the terminology makes it more confusing than it has to be. As long as salesforce.com (SFDC) has the terms, Leads and Contacts, though, we are stuck with ‘em. Current school of thought is to generate a new SFDC Lead for any touch from a prospect – any form fill, any webinar registration, any request for a download or sales call. So, you will likely have multiple Leads from the same prospect created each time s/he raises a hand. Consolidate these myriad Leads at the Contacts & Accounts level if you want a prayer of tracking campaign effectiveness from salesforce. This strategy has changed from even a couple of years ago.
We had tremendous success in keeping and managing 'what is a marketing qualified lead' definitions while I was at Eloqua. We validated our sales & marketing agreements regularly by comparing marketing output (Marketing Qualified Leads) with sales acceptance, or Sales Accepted Leads. This monitors quality and balances the sales and marketing roles in the process. Keep those two KPIs consistent and you've got a workable system.
Good discussion here.
Thor
Great post and so very true! An identity crisis is no more fun in business than it was during your adolescence. This leads to hype that is very easily discounted or ignored altogether.
Thanks for sharing.
Wholesale Buyers
Robert, Definition of "Lead" is important of course. the definition will be different from company to company, and from division/dept. to division in some companies.
What IS important is that the communication is taking place. It is the dialogue that is what makes things work between Marketing and Sales. The definition will evolve and morph to reflect the economy, industry and competitive activity, and your company goals for the period at hand.
Gather everyone at the table and you will see good things happen!
Robert:
Great post as always. Since there are a million ways to do this, let me share my mine.
In my forecasting and funnels, I use the term "raw lead" to refer to an unscored lead (aka "prospect") and then specify business rules for scoring those leads.
The next step in my funnel is to score these raw leads and those that meet my criteria is then deemed a "lead."
Therefore, in a hypothetical campaign, an "A" lead would be one that is sales accepted, a "B" lead is one that sales would agree meets basic criteria of being a lead but is not far enough in the buy cycle to call on, a "C" lead should be nurtured and sales will be happy to take their order one day but will never call on because they are too small an opportunity and a "D" lead should be dropped.
Now, in terms of the forecast model and funnel, every client of mine is different, depending on complexity of buy cycle, complexity of purchase, etc.
But in most cases, I prefer to use the term "raw leads" as to me, it fits better in the funnel vernacular.
So in my funnel, clicks become raw leads which become leads which become sales, with an assumed drop off at each phase.
To me, one of the most important data points enabling me to optimize a campaign is to know what percentage of raw leads become actual leads because this lets me adjust the front of the funnel (is the offer too rich, is the media buy too narrow, etc.).
Regards,
Marc
Robert,
I couldn't agree with you more. I hate that the word "lead" has become generic meaning everything from a name on a list to a fully-qualified, sales-ready opportunity.
And now others, including industry analysts and marketing automation vendors, are complicating things further by adding new lead levels such as "marketing qualified lead" and "sales accepted lead" (those two should be the same thing if sales and marketing are aligned!).
Mac McIntosh
mcintosh at sales-lead-experts dot com
Great read, about a topic no one else talks about. Identity crisi is a hush hush topic and I'm glad someone is spreading the word!