Many organizations have lost their focus on lead generation because budget-strapped marketers are under “efficiency” pressures to optimize campaign budgets, customer retention and overall marketing ROI.

A survey of 75 marketing executives by Profitable Channels shows that “growing faster at lower cost” is the top problem keeping marketing executives up at night. At the same time, the majority of sales and marketing leaders surveyed by Sirius Decisions in 2003 rate lead generation as their top critical growth barrier, and most feel their lead generation skills are below average.

The problem is that focusing on “efficient growth” does not yield better lead generation. Focus on cost containment and accountability usually yields only marginal gains. Therefore, managers are looking for new ways to grow.

The Brutal Facts About Lead Generation Today

The facts suggest that fixing the lead generation process is a great place to generate new growth:

  • Selling takes more time and resources—the sales cycle has become 22% longer as buyers are taking longer to consider their decisions and buying is being managed more professionally (Sirius Decisions).

  • Too few resources are dedicated to “front end” lead generation—on average, sales teams spend less than 15% of sales time on lead generation (Sirius Decisions).

  • Leads are not managed very well—over 75% of leads are not followed up on properly (Sirius Decisions).

  • More resources are devoted now to the “back end” of the sales process —customer retention budgets are growing (Profitable Channels).

  • Demand creation is not a major priority—only 6% of organizations make lead generation a sales-training priority (Sirius Decisions).

  • Demand-generation budgets are being cut—fewer than 10% of organizations are undertaking significant strategic investments focused on new-customer acquisition (Profitable Channels). 

  • Most organizations recognize they do a bad job at managing the “front end” of the sales process— 87% of sales and marketing leaders rate themselves average or below average at generating demand (Sirius Decisions).

Sources: Sirius Decisions survey of sales and marketing executives 2003; Profitable Channels Survey of Marketing Executives.

Six Strategies for Revitalizing the Lead Generation Process

Overall, best-in-class marketers are focusing their efforts on the “front end” of the sales and marketing process. Here are six ways you can revitalize lead generation in your own organization:

  1. Make more time for leads.

  2. Keep better score.

  3. Use timing to improve targeting.

  4. Make the sales force your client.

  5. Look for growth in the “white space.” 

  6. Use more interactive direct marketing.

1. Make more time for leads. Best-in-class sales and marketing executives are making time for demand generation at the expense of less productive sales and marketing activities. Smart marketers have learned that demand creation is not demand management. These surveys suggest that most organizations have under-invested resources and management focus on filling the sales funnel. An analysis of your sales and marketing performance will likely show than an incremental investment in “up front” lead generation will likely get bigger returns than spending more money managing the sales pipeline or the lead-to-close ratio.

2. Keep better score. Measuring your effectiveness at creating demand is a big untapped opportunity. Leaders are improving lead-generation performance by tackling the basic problems of improving accountability, getting proper attribution and benchmarking their performance to peers'. Three major problems exist in most companies. First, for most sales teams, creating new leads is a small part of the job for everybody in the sales organization, but it is nobody's primary job. Second, when asked, most salespeople tend to have very different opinions on what a lead is. Measuring how well your organization generates leads can be tricky if most organizations cannot even agree on what a lead is and nobody is in charge of keeping score. Organizations can get immediate results by dedicating specialists to demand-creation as their primary jobs. These specialists can have a major impact in three ways—managing lead generation processes, keeping score of how many leads are generated and, most important, making sure proper credit is given leads that are generating real sales.

The third problem with measurement is where to set the bar for performance. This can be answered definitively only by benchmarking of performance to that of peers and best-in-class organizations. The best organizations are moving from ignorance to accountability to leadership by measuring and comparing their lead-generation performance. If, according to Sirius Decisions, 52% “think” their performance is below average, but the reality is very few organizations really know how well—or poorly—their sales and marketing teams are performing in terms of leads generated, sales quotes, sales cycles and overall cost efficiency. A good place to start is by comparing your demand-creation and management performance to those of hundreds of other companies by using the Sirius Decisions sales and marketing benchmark. Access it online.

3. Use timing to improve targeting. Timing is the new frontier in targeting new leads and customers. Smart marketers are finding that they can get far more revenue from a dollar invested in getting the timing right than they can on a dollar invested in targeting the right person to sell to. Marketers who understand that “timing is targeting” are improving marketing performance two- to ten-fold by improving the timing of their marketing programs. These companies are improving lead generation performance two- to ten-fold by investing in event-triggered and real-time marketing programs that are better timed and more relevant than traditional marketing campaigns.

For example, Fidelity Investments—like many other consumer financial services firms—knows that people generally make investment decisions based on major life events (marriage, retirement, birth, death) or in reaction to market events (interest or stock market swings). Fidelity worked to identify over 100 event triggers that signaled when customers would need (or want) to make trades, shift to different investments, or move their assets outside of the Fidelity family. Fidelity used advanced technology to sort though millions of daily customer transactions to identify when life and market events were happening, and target situations where customers would need advice or new products or might be receptive to a particular offer. These event triggers fed a wide range of email, Web site, agent and call-center programs that reacted quickly to put the right offer in front of the right person at the right time. This focus on better timing allowed Fidelity to double every aspect of its marketing process: from the number of leads to the quality of leads to the response rate. The “event triggers” generated by this system created twice as many qualified leads, doubled the chance that a particular offer was relevant to a customer's need and improved campaign response rate 200%.

4. Make the sales force your client. Effective marketers treat their sales channels like customers because they realize that most sales are still closed by salespeople. Smart direct marketing executives realize that finding new revenue growth will depend on their success at “feeding” field, agent and retail sales channels with leads and sales. As a consequence, many marketers are redirecting their direct marketing resources into integrated marketing campaigns that deliver better leads and low-cost support to field sales, retail and agent networks.

One professional services firm is cutting back heavily on its CRM and direct marketing initiatives focused on customers, citing channel conflict with field sales and poor revenue attribution as the primary reasons. Instead, this organization is investing in redeployment of customer data assets and increasingly operational CRM systems to deliver targeted marketing programs that support the field sales organization in key accounts. These efforts emphasize educating the field sales team and measuring the effectiveness of direct marketing campaigns in key accounts. According to the vice-president of marketing, “We are dedicating more targeted marketing resources to supporting the sales channel and educating them to the capabilities of interactive and targeted marketing. All of our direct programs support key account selling and penetration opportunities.”

5. Look for growth in the “white space.” To marketers, “white space” means the places where customers shop, but where existing media, channels and promotions cannot reach. “White space” represents un-exploited opportunities. These include uncovered, under-resourced and new markets and customers as well as gaps in marketing process due to channel, organizational and media inefficiencies

For example, a high-end clothing retailer used alternative channels to improve lead quality. Like most retailers, it typically delivered offers through traditional newspaper circulars or the mail and found the type of people who read or respond to these offers are generally shoppers looking for discounts or something for free. These people could not afford the premium prices in the store. To generate better leads for its large retail network, this retailer needed to find media and channels that reach higher-end buyers who would pay more for quality. By placing value cards in an innovative dry-cleaner promotional network named Madison's Bag, they were able to target their promotional dollars to reach well-heeled people (those with over $70,000 in annual income) when they were thinking about their clothes. New leads that responded to this promotion spent twice as much as the average customer ($150 versus $75) when they visited the store.

6. Use more interactive direct marketing. Best-in-class marketers are increasingly looking to direct and interactive marketing programs as a way to accelerate customer acquisition at lower cost. Many organizations are finding that new interactive media and promotions can increase revenue at lower cost because they can reach markets that traditional vehicles cannot.

For example, a large car company figured out that its marketing “white space” was the independent research Web sites, such as and Kelly Blue Book, where the vast majority of car shoppers researched cars. This organization already knew that over 70% of people shopped for cars online but recently learned that over 80% of the serious shopping activity happened off its Web sites—at these independent research sites. As a result, the company was missing over half the eligible prospects who are “in the market” for the car it offered but never visited its Web site. Traditional Web advertising was only nominally effective because it did not let the company actively identify, target and engage prospects before they bought a different brand. To reach and engage these lost leads, they used technology from CentrPort that allowed them to “see” these off-site leads and make them relevant offers on the spot.

Next week, in Part 2, I will cover these lead generation practices in more detail.

Note: If you want to learn more about these best practices in lead generation, watch for details of the upcoming Marketing Profs Know-How Seminar online with Steve Diorio, on June 15. In this seminar, you will learn…

  • Why lead generation is the highest-leverage marketing investment

  • The reasons most organizations fall short in lead generation

  • Effective strategies to generate more demand today

  • New technologies you can use to grow more for less

  • How your lead generation performance stacks up versus the best, with a free benchmark of your organization's performance

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Steve Diorio is author of Beyond E: 12 Ways Technology is Transforming Sales and Marketing Strategy (McGraw Hill, 2002) and President of Profitable Channels, a marketing strategy firm (