A Investigation
Why Do Most Marketers Measure New Strategies With Old Metrics, i.e Leads?
HYPOTHESIS:
We live in a marketing world obsessed with generating leads. But are they actually worth your time and bucks? Does your sales team really care about the magnitude of leads you as a marketer generate? It’s time to break this down and see if leads have the impact that we’ve been brainwashed to believe.
(Spoiler alert: they don’t.)
First Off: What Even Is a Lead?
All of the following can be considered a marketing lead.
An Email Address?
A Nurtured Email?
An MQL?
An Inbound Request?
Whether collected from form submissions, a purchased list or an event, less than 1% of all leads turn into sales (source: Forrester).
So you send your newly collected lead down a drip campaign journey… now they’re slightly warmer. But these nurtured leads turn into customers 20% more (source: DemandGen), so roughly 1.2%. They don’t sound very nurtured, do they?
Finally, a high enough score to hand it over to sales! The average lead-to-MQL conversion rate is 31% (source: FirstPage), which is decent. But let’s face it: how much have you tailored your lead scoring so that you can meet MQL quotas, rather than handing sales really high quality potential customers?
These are the only “hot leads” anyone really cares about. Here’s the bad news: 57% of the buyer’s journey is complete before they fill out a form. 77% have fully defined their needs (source: Accenture, CSO Insights) and know what they’re looking for. So you never even get a chance to frame their perspective with your product or service in mind… which will make you less likely to win their business.
Click each Sticky Note to learn more:
Basically, a lead is someone who shows interest in your offering. Fun fact: There is no easily found, universal definition of a marketing lead. How are we still obsessing over something we can’t even get behind one definition for? Stop trying to make leads happen. They’re not going to happen.
How Did We Get so Obsessed With Leads?
Sixteen years ago, marketing automation became all the rage to help you collect leads. Everything was about SEO, landing pages, form optimization, etc. However, since 2015 lead generation has been fading. But don’t panic, it’s ultimately a good thing; it’s made way for its cooler, younger, and in-the-know cousin: the more targeted and effective Account-Based Marketing (ABM). For now, let’s take a step back and examine the history of lead generation:
2005
MAP and CRM
As cloud-based technologies became mainstream, the easiest way to measure marketing performance was through “lead generation.”
Coincidentally right as lead generation starts losing stream, Terminus was founded to help marketers focus on creating revenue with best-fit accounts.
2014
Start of Terminus
Global search traffic for “lead generation” hits an all time low. The lead begins to lose the throne...
2015
‘Lead Gen” Begins to Fade
Click each Street Lamp for more information.
2019
2019 State of ABM Report
Demand Gen Report found that 23% of companies had no ABM program.
Suddenly, only 5.8% of companies reported having no ABM program in place. The pandemic spurred a movement towards account-based to increase efficient revenue growth. ABM becomes the dominant source of revenue.
2020
COVID-19 Hits
There’s a new king in town. The world catches up to account-based methodologies, with more and more CROs purchasing ABM platforms to help sales. Partnership between sales and marketing to create opportunities becomes the rally cry.
2021
Go-to-Market Teams Emerge
78%
Source: Terminus 2020 State of ABM report.
Percent of resources dedicated to ABM
New opportunities generated through an ABM approach.
Percent of overall revenue attributed to ABM.
79%
73%
Here's why modern marketers don't worry about leads so much.
If Not Leads, Then What?
If leads are no longer the main goal for your marketing and sales teams, what should you focus on instead to measure success? And how can you optimize your program to create more qualified sales opportunities, faster? Dump collecting leads for Account-Based Marketing and eventually, as your program matures, the focus shifts to these four ABM pillars:
1. New business generation
2. Pipeline acceleration
3. Customer retention
4. Customer expansion
What could we possibly measure instead of leads?
Modern marketing teams focus on likely future customers to generate awareness, interest, and opportunities without waiting on them to fill out a form.
Leads become one of the least important measures of success in a mature ABM program.
Source: Terminus 2020 State of ABM Report
Two Truths, One Lie
Can you detect which of these is not a proven fact?
Only 10% of mature ABM programs consider “leads” to be a top-3 performance indicator.
GET THE RESULTS
TRUE
Here’s what mature ABM programs prefer as KPIs:
90% New Business Generation
50% PipelineAcceleration
63%CustomerRetention
Next Truth or Lie
You cannot hit your revenue goals without generating any leads.
LIE
Leads are great, but when less than 1% of them become customers, it’s an unreliable indicator of revenue performance. Our 2020 State of ABM report found that mature ABM programs are generating 78% of all sales opportunities and 73% of revenue… without ever touching leads.
Your sales teammate would rather have ten opportunities than a hundred leads.
Sales wants folks who will be most likely to convert to future customers, rather than a bunch of bad-fit leads. Don’t trust us? Ask a salesperson on your team.
100 leads < 10 opportunities
Life Cycle Stages for Modern Marketing Teams
Leave the funnel, take the cannoli. Do we have your attention now? We like to think of the four ABM life cycle stages as a cannoli because it’s like a delicious pipeline stuffed full of goodness. With this new (cannoli) pipeline, you can ditch the boring, traditional marketing funnel and start measuring these decadent, filling life cycle stages. But first, you must decide your target accounts. Target accounts list: The number of accounts you’re targeting when running a coordinated campaign. You can optimizeyour target accounts by:
• Running a content audit
• Diversifying your segments
Learn more here on how to measure and optimize target accounts.
Awareness
In the first lifecycle stage of awareness, you must leverage firmographic and intent data to put highly relevant messages in front of your best-fit future customers via targeted display and social advertising. This generates initial interest and edges out competitors vying for the same attention. Get good at creating tight segments and associating personalized messages and you can experience huge lifts in display ad performance.
What to measure? Of your target account lists…
• How many are you reaching?
• How many are showing engagement (clicking ads, visiting your website, etc.)
• What high-value pages are they interacting with?
The Terminus research team found that industry or persona-specific ads perform twice as well as normal display ads and account-specific ads perform five times as well!
Opportunity Creation
Opportunities created: The accounts that have engaged with your brand (both digitally and in person), have shown interest, and have been qualified as a legitimate revenue opportunity. Here’s where teamwork makes the dream work. By sharing real-time engagement data with your sales team, as a marketer you can alert them to the accounts that are seeing those ads and taking action. Then your sales team can start reaching out, trusting that the people they’re contacting are already familiar with your brand and your solution.
• How many are surging?
• How many are showing ‘buying’ signals (intent, visits)
• How many opportunities have you been able to create?
• How much pipeline has been generated?
Pipeline Progression
This is where you deliver personalized, mid-funnel content to buyers to expedite the sales process. By aligning relevant creative and content to discrete sales stages, accounts can automatically be targeted at every stage of your opportunity cycle
• How long do they average in each opportunity stage?
• What’s the average sales cycle?
• What is your win-rate?
Customer Retention + Expansion
In the final stage, you create tight customer segments based off of customer data. Organize and group customer segments by NPS scores, product usage, contract renewal dates, or even contract type. With these clusters of customers, your marketing team can deploy product best practices and usage applications to customers who aren’t using your product as much as you’d like them to.
• How many are up for renewal in the next 3-6 months?
• What is your churn rate?
• How many expansion opps have you created?
For a deeper dive on account-based customer retention and expansion programs, check out our ebook, Retention Is the New Acquisition.
What’s Easier: Chasing Leads or Accounts?
If you’re still not convinced of the efficiency of ABM, here’s a visual comparison to show you that chasing leads is creating your whole team unnecessary extra work with less results. In a nutshell, you have to work really hard to nurture a bunch of wishy-washy (no offense) leads who may not even be the person who approves purchasing your product or service. Why not go a safer route by figuring out your ideal future customer in advance and marketing to their buying committee as a whole, rather than just one person?
LEAD
CAPTURE
NURTURE
QUALIFIED
SALES
BUYING COMMITTEE
DEAL?
PERFECT FUTURE CUSTOMER
AWARENESS
ENGAGE YOUR SITE
Powered by Terminus Sales Insights.
“But My CMO, CFO, CEO, Won’t Let Me Stop Measuring Leads.”
Leads have been the main measure of marketing success for a hot minute, and changing this deep-rooted tactic won’t be an easy task. You will need to convince your revenue leaders that ABM is a much more powerful and effective way to grow a business.
Save the leads!
Leads are going extinct!
Don’t take away my leads!
Get your hands off my leads.
Marketing will die without leads.
Anyone can generate leads– that’s not what your revenue leaders want. They want a predictable pipeline that produces amazing results, i.e big bucks and loyal, happy customers.
An account-based approach is a much more efficient acquisition engine. Focus on fewer accounts and create bigger wins. The numbers don’t lie.
Leads won’t stop coming in, but you won’t have to rely on them like you used to.
If your competitors get good at ABM before you can, it’s already too late. This is why you must become an early adopter.
ABM produces a superior end-to-end customer experience. Let’s face it: everyone wants to feel special. ABM forces you to dig deep, truly learn what each buyer wants, and offer a customized buying experience that is hard to ignore.
Getting Started With ABM
Honestly, you’ll need dedication to making this transformation happen. But it will all be worth it. Here are two ways to get started:
1. Consider assigning one or two people to devote outsize time to your ABM program for the first two quarters.
Your friends at Terminus are always here to help with ABM objective handling! If you can’t already tell, we live and breathe the stuff. Once they begin to see your metrics, they’ll more than warm up to the idea—and see that, in 2021, ABM and pipeline is king.
2. Put your target accounts, next to their status, right in front of your leaders as a Google Sheet that you circulate on a weekly basis. This will keep everyone focused on their most important accounts.
The Verdict Is In: Leads Aren’t the Leading Marketing Metric Anymore
The future of revenue generation is ABM and go-to-market teams. Your new marketing goal should be to tackle accounts, not leads. Creating highly personalized campaigns with unique and creative content will mean more wins and successfully hitting your revenue goals. ABM isn’t going to be an overnight success, but after some experimentation and collaboration, it will become a transformational go-to-market strategy for your company.
Try It Yourself With the TEAM Framework
TARGET ENGAGE ACTIVATE MEASURE
Build several tightly segmented account lists. Leverage firmographics and intent data to deliver highly personalized messages. Personalization drives engagement! One-size does not fit all. Developed personalized creative, campaigns, or content for your target account lists. Your turn, sales! You can’t wait for them to come to you. Educate your sales team on intent signals, engagement trends, and surging accounts so they can proactively reach out and create more revenue opportunities. Pipeline is the #1 metric. There are many important metrics to consider, but at the end of the day, pipeline is king. Share that goal equally with your sales team.
Need more information about leads?
Our dectectives have gathered other resources for you and encourage you to investigate on your own.
Everything You Think You Know About Leads Is Wrong
[Webinar Recording] It’s Time for a Leads Intervention
The Roof Series: Episode 6, Get Out of The “Hot Leads Time Machine.”
