One of the main problems with using lead-based marketing as a primary measure of success is that it can lead to a narrow focus on acquisition, rather than on customer satisfaction or retention. A goal to simply acquire as many leads as possible can result in a lack of attention to the overall customer experience.
Quotas that measure success by the lead are flawed in multiple ways. Not only does it put a silo between marketing and sales alignment, this mindset could even lead to an unfulfilling career in marketing automation. Quality over quantity? Here’s some ‘food for thought’.
A Lack of Accountability and Transparency
Relying solely on lead-based KPIs can lead to a lack of accountability and transparency. For example, if a marketing team is solely focused on generating leads, they may be less inclined to track or report on the actual conversion rate of those leads into paying customers. This can make it difficult to accurately measure the effectiveness of a marketing campaign or strategy.
Left unaddressed, sending mediocre leads over to the sales team will damage the marketing team’s credibility
Marketing operations needs to be ‘on the ball’ when it comes to SQLs (sales qualified leads). What does the MQL → SQL conversion look like in your organization?
- MQL criteria: The marketing team acts as the first filter to remove prospects that do not fit your target audience, the output is marketing qualified leads (MQL). Marking a prospect as MQL answers two questions: a) Is the lead interested in us? b) Are we interested in the lead? This two-dimensional view challenges marketers to look beyond their lead-based KPIs, into the perspective of salespeople.
- Salesforce reports: Do you have reports created in Salesforce that show SQLs in a given period?
- Campaign Influence: Do you understand how Salesforce Campaign Influence works? Are salespeople following the process to ensure that the data points are available to marketers? This includes adding Opportunity Contact Roles.
- Prospect outcome: Are you measuring the outcome of prospects marketing qualified, and handed to the sales team? Did the prospects eventually meet expectations? You should start telling the story with a complete plot – not only the beginning and middle, but also the end. One example I shared is reports and dashboards based on Pardot (Account Engagement) grade, and how it relates to reality.
It’s far easier, and less resource intensive, to retain a customer than acquire a new one. According to one source, “acquiring a new customer is five times as expensive as retaining an existing customer. 44% of companies admit they “have a greater focus” on acquisition, while 18% focus on retention”.
So, why are we chasing the new, over nurturing the existing? Most likely, to gain a greater market share, reach new geos or industries – which are valid reasons. However, efforts are futile if the customer then ‘churns’, as in, stop being a customer.
The warning lights are on the dashboard, although we often don’t keep an eye on the dashboard.
- Churned customer reports: How does your organization measure customer retention? Which ‘post-sales’ objects can give you insight – is there a contract, do you use assets, or a custom object, such as ‘project’. Renewal Opportunities (or the lack of them) should also feature in the objects you report on.
- Lifetime value: Another measure that can indicate whether you’re retaining customers.
- NPS surveys: Discover the detractors, passives, and promoters among your customer base to see how well the joint marketing/customer service initiatives are working.
- Usage-based data: If you have a product or service that’s connected digitally, are you using the usage data effectively? This is a prime use case for CDPs, to aggregate data from different sources, and perform identity resolution (in cases where one individual uses a different email, or uses a nickname instead of their full first name).
Spammy and Intrusive
Another issue with lead-based marketing is that it can rely on tactics that may come across as spammy or intrusive to the prospect. Mass email campaigns, anyone? This can lead to a negative perception of the company or brand, and may turn off potential customers.
Sending relevant communication starts with segmentation. How’s your segmentation shaping up?
- Engagement Studio/Journey Builder: The main aim of Engagement Studio (Pardot Account Engagement) and Journey Builder (Marketing Cloud) is to set up campaign automation that treats each prospect as an individual. In other words, they progress through the program at a pace according to their level of engagement or field data.
- Frequency and recency: This adds another layer to which prospects you put onto which journeys. This can either be rules-based (using a dynamic list), or leveraging AI-driven tools (i.e. Einstein Engagement Frequency) which calculates if a prospect is ‘oversaturated’ by communication.
- Mail Privacy Protection (MPP): Email open activity has been used by marketers to ‘push’ prospects to a next step. Do you remember the days of being showered by ‘follow-up’ emails when you merely opened an email? Apple MPP has taken away this widely used measurement metric. Thank goodness email open rate is no longer reliable because it was always a vanity metric. Your ‘relevancy’ factor is being helped immensely though (silver lining).
- Conversational marketing: Prospects should be able to ‘raise their hand’ if, and when, they want to. Conversational marketing (chatbots for marketing use cases) does just that – prospects can get answers to their questions, in near-real time.
Overall, while lead-based marketing can be an important part of a larger marketing strategy, it should not be the sole focus. Let’s be honest, ‘new leads’ isn’t a sophisticated measure for marketers with the sophisticated systems and numerous sources of data at our disposal. Not only does it put a silo between marketing and sales alignment, this mindset could even lead to an unfulfilling career in marketing automation.
A more holistic approach that takes into account customer satisfaction and retention, as well as conversion rates, is likely to be more effective in the long run.