Often in life, more can be wonderful. For example, I like more tacos. If possible, I would like seven, not two. I would also like more Amazon Prime boxes and more NBA playoffs.
Historically in B2B demand generation, more has been better too. More leads? You bet!
But wait, let’s go back to college for one second. Remember the law of diminishing returns? There becomes a point when more is not more and the level of profits or benefits gained becomes less than the amount of money or energy invested. This is a very important concept to understand in marketing, especially for demand generation.
1. 20,000 Names Is Not Winning
If you bring in 20,000 names from a tradeshow or inbound marketing tactics, but the leads do not convert–so what? It’s important to remember that a name is not a lead. A name is just someone who enters your database (e.g. a student doing research or a candidate looking into your company), but a lead is someone with the right profile–specifically the right demographics and behavior, and ideally even the right account type. It is very important to have a method for making the distinction between what a name and a true lead is.
So how can you distinguish the two? Define a revenue model with business rules that determine a prospect’s movement from one stage to the next and at which point a prospect should be handed from marketing to sales. At Marketo, a lead has to meet three criteria to become a lead: right demographics, right behavior, and right account profile. You can score your leads to understand their unique demographics and behaviors so that you can deliver high quality leads to your sales team.
2. Focus on the Right People and Accounts, Not Just Volume
Even if you bring in leads who buy your product or service, if they ultimately churn, that is not an optimal outcome. All leads are NOT the same. Some buyers will make better customers and are more ideal for your business. These might include customers who buy additional products or upgrade their current ones, refer your company to their peers, and advocate on your behalf.
So how do you determine the right leads to focus on to maximize their customer lifetime value? It’s critical to analyze your customer base to understand what attributes make up the ideal prospect. Is there a buyer persona that is more successful for your business? It may be a specific company size, vertical, buyer type, or all of these combined. You can use predictive scoring to help you identify the profile of an account or individual that is more likely to be a profitable and account-based marketing tactics to market to them in a focused, stream-lined manner.
3. Think About the Lifecycle, Not Just Acquisition
Acquisition is really important, but it’s only part of the picture. Yet, many marketers are still primarily focusing their investment and activities into driving acquisition. In fact, according to a 2014 Forrester Content Marketing Benchmark online survey, only 12% ofcontent marketers are focusing on retention, cross-sell, and upsell.
That means marketers are missing out on revenue that they could generate from growth opportunities that are much more affordable. By spending the majority of their efforts on costly acquisition techniques, marketers are leaving money on the table (data from Bain & Company shows that a 5% increase in retention yields between 25%-95% increase in profits).
The action here? Don’t get tunnel vision with the number of leads you acquire and spend time thinking about the right customers for your business and the programs you have in place to continue to engage, retain, and delight them. How have you tweaked your marketing strategy to focus on obtaining quality over quantity? Share your experience in the comments below!