Nature Or Nurture? Good Leads Are Made Not Born
The critical question, especially in B2B companies where Marketing must provide fuel for the Sales team in the form of workable leads, is how to increase that precious flow of prospects really ready to buy. The older, more traditional approach is to invest in advertising and promotional programs that generate volumes of possible prospects, and then allow the sale team to skim the hot ones with immediate purchase intent and ignore the rest. If they’re not ready to buy, they’re not qualified!
A more successful approach, one that I have employed with outstanding demonstrable results, is to focus less on pumping up the flow of hot leads and more on filling the process with a larger flow of warm ones, then use a lead nurturing process to heat up the warms leads so they eventually become the hot fuel for Sales. Note the key distinction here: the lead nurturing process is not just about filtering the good leads from the pile, it is about actually creating sales-ready leads from a high volume base of mildly interested prospects. And the amazing thing is that by building a broad lead pipeline and effective lead nurturing process, the volume of hot, sales-ready leads will increase far beyond where it would have been if hot leads had been the sole focus. Net result: with the right lead nurturing process you can make hot leads out of warm ones.
Making Good Leads
The key concept is that by generating a large flow of mildly interested leads and gradually building the value proposition in the mind of the prospect, you create hot leads that would otherwise fail the qualification process. The warm leads come from educational offers like webinars, users groups, whitepapers or non-commercial blogs. Capturing these warm registrations is not about selling a product; it’s about creating programs that capture names and interest for people in your specialized field. Then with the lead nurturing program, you gradually illuminate topics closer to your product differentiation. Add personal calling and email programs focused on educating and inviting to access more relevant content and you have a long term lead nurturing program.
By keeping lukewarm leads in the funnel, the number of prospects you are communicating with will be four to five times larger than with a strict hot lead (budget & timeline) qualifying program. As shown in the picture below, capturing leads into your nurturing system at the top of funnel, where the entrance is widest, guarantees the highest volume of long term potential prospects.
The traditional ‘qualify first’ process lets too many of those long term prospects escape. It may increase the conversion rate, but it reduces the eventual number of long term hot leads and resulting deals.
When our focus was strictly on increasing the volume of sales-ready hot leads, there was a period when this lead flow stayed flat despite increasing spending and more frequent prospect follow-up. Once we stepped back and stopped pressuring leads to quickly jump from warm to hot, the resulting flow of sales-ready leads began a continuous and steady rise. The difference was not in the number of immediately hot prospects – those continued at their usual inflow and conversion rate – but rather in the number of non-qualified warm leads that became hot after a 60 or 90 day process.
When quality leads came in, the Sales team could either convert them to opportunities or disqualify within seven days. If they hadn’t responded positively by then, they really were not ‘hot’ and no amount of follow-up pressure would change that. The hot leads we ‘made’ were names that had failed immediate qualification, but had time to absorb and learn the educational messages over a longer period. Sure enough, they re-awoke with enthusiasm built on the nurturing they received without any sales pressure. Age of leads converted to opportunities took on a binomial distribution, with peaks within seven days of lead capture, then another peak that took more than 60 days.
Of course the conversion rate for the immediate hot leads is always much higher than for warm ones, but the key is that there is a much higher volume of barely warm ones that can be nurtured, yielding a steady significant output. It may take four or more webinar leads over a 90 day period to match the conversion volume of one hot download. For technical show leads, the number may be 15-20 required to create the hot one. However, the cost of nurturing is low, and the resultant hot leads were ones that would never have surfaced otherwise.
Why Does It Work?
B2B customers today want to make educated buying decisions on their own, not to be subject to high pressure sales. Before they discover the value in what you are selling, attempts to qualify will result in ‘no budget, no timeline, no purchase intent’.
Instead, the lead nurturing process gives the prospects something of value. Educational materials and site content lead to problem solving and open up real interest in your product. Once the prospects see for themselves how you can help, they have a vested interest in finding budget and pushing for a purchase decision. What was once an unqualified opportunity becomes an educated prospect who wants to move the process forward. Simply put, today you cannot force a product on an interested buyer, but if you build a value proposition through a gradual education process, the buyer will come back to you.
Ingredients To Make It Successful
The key is to add a lead nurturing program that goes beyond traditional sales qualification and that gradually works the volume of warm prospects. To do that you need three things:
- Assets: High quality, non-commercial, educational content.
- Process: A marketing automation system, staffed by skilled operators, to deliver the message to the right prospects in a non-intrusive fashion.
- People: A Sales Development team whose goal is long term lead nurturing, not immediate sales.
Each of these is an entire topic on its own and merits a separate detailed discussion, but importantly, you cannot think of your web assets or marketing systems in isolation. They are all part of the factory that creates the most precious of all marketing commodities – the hot lead – from the voluminous raw material of seemingly lukewarm prospects.
By Don Bergal
Don Bergal was the CMO at Confio Software, which was recently acquired by SolarWinds. In the years leading up to the successful acquisition, Confio revenues grew rapidly, driven by the lead flow and “marketing/sales factory” executed by Don and his team. Prior to Confio, he had a record of building technology start-ups including Antepo, Jabber, and Wireless Telecom Inc. Don has not yet begun his next start-up opportunity.