As the person responsible for signing the check, I have heard it all when it comes to justifying the cost of a new lead source. There were trade shows, marketing campaigns, lead-gen services, the new whiz-bang list and tele-prospecting service. Yet, regardless of the solution, inevitably the pitch boiled down to two points.
- This “new” approach will generate X number of new Marketing Qualified Leads (MQLs) which will result in Y number of Sales Qualified Leads (SQLs). Y SQLs will then lead to Z appointments, which will translate to some number of customers buying some amount of our product at some average price point and margin.
- If the number above doesn’t meet our normal hurdle rate (calculated variously as ROI or some percentage of revenue), we will also build more brand awareness. Surely that’s a good thing in the long run - an “almost” hurdle rate combined with the “priceless” value of brand awareness. (If it’s not called priceless, it’s called strategic and most CFOs know to get the shovels out when either of these two words are used.)
Now I’ve approved too many of these pitches to be called a real hard-nosed CFO. After all, I too want to give our sales team more chances at bat (some of my sales colleagues will find this hard to believe). With a good product, if we get more chances at bat, we will win in the marketplace. And if we don’t have a good product, then nothing is likely to help.
But what if I did want to satisfy my bean-counting instincts? Is it so difficult to measure the efficacy of your lead sources? Not really. Here are three simple ways you can convince your CFO that your lead source is worth the investment.
- Mark - For every new lead into the system, identify the source and then match it against the current customer list. If the lead already exists, understand why the sales rep in charge of the account isn’t working on the lead. If there is a reason not to be working it, then score the incoming lead accordingly.
- Track - Follow every lead from MQL to SQL and track the drop-offs. It’s sort of like a Deming approach for sales. Know which are the largest categories that are keeping our sales people from converting leads into revenue. Then create strategies for approaching each category.
- Measure - Finally, calculate if the whiz-bang solution actually produces revenue. It might be that all those new MQLs never make it all the way to a close. Or that all of the revenue is coming from an old source and that the new stuff doesn’t help.
Ultimately it’s about having a systematic approach to maintaining the data in your CRM. You may be surprised with what the data tells you.
Perhaps the bean counters in finance do have their uses after all.
We can make a difference to our customers by thinking through what matters to them, by putting ourselves in their shoes, and by focusing on how we can help create a better experience for them.