Marketing Profs

Marketers responsible for lead generation are all too familiar with some common challenges—getting closed-loop feedback from the sales organization, measuring marketing effectiveness beyond just lead quantity and cost per lead, and building strong alignment with the sales organization.

As presented in the MarketingProfs' research report, "B-to-B Lead Generation: Marketing ROI and Performance Evaluation Study," effective lead-generation marketing is very much tied to overcoming these challenges to prioritize lead quality over lead quantity. 

The research report, released in June 2008, showed that companies that rate their lead-generation marketing as more effective than competitors' were three times as likely to report a strength in closed-loop sales tracking and measuring the ROI (return on investment) of their lead-generation marketing.

More than half of the marketers with more effective lead generation marketing (56%) expect that their sales organizations would rate the quality of leads as positive (top two scores on a 5-point rating scale) compared with just 20% of those with less effective marketing.

Lead quality is critical to managing and improving bottom-line performance. In addition to these research findings, basic ROI analytics can be used to make your case to prioritize quality over quantity and guide your decisions to deliver greater performance and profitability. You ultimately need better insight into the two primary dimensions of quality: average profit per sale and average conversion rates from lead to sale.

With insight into lead quality and ROI, the marketing team can unlock untapped opportunities with...

1. Better alignment of the marketing spend to value potential
2. Improvements to marketing strategy
3. Better tracking and metrics
4. Earning buy-in from the sales organization

We'll run through some basic math first to build the support for acting on the strategy, metrics, and alignment opportunities.

Marketing Investment Levels Aligned to Value Potential

Cost per lead is a very commonly used marketing metric (used by 34% of B2B lead-generation marketers, according to our research). It can be an insightful metric, but it is highly dependent on all leads' having the same value and conversion potential, which is rarely the case. If your cost per lead goes up but you bring in better-quality leads with either higher profit per sale or higher conversion rates, it will be a worthwhile investment. Marketing effectiveness can be improved with "value-tiered marketing investments" that align marketing spending with the expected returns for better ROI performance.