Lead Generation: How to Manage and Measure a Successful Program

We've seen a dramatic increase of late among current and prospective deep technology clients looking to establish a lead generation program, or fine-tune or broaden a program already in place.

For each of these businesses, there's a common reason why they're taking a harder look at lead generation. Done well, lead generation serves as the front end of a lucrative pipeline to sales, which makes it one of the most direct and directly measurable forms of marketing communications. And savvy marketers realize that, in the deep technology space, increasing competition and shrinking markets have boosted the premium—already high—on extracting every possible dollar from their respective universes of sales opportunity. In this newsletter, we review best practices in managing lead generation programs for superior ROI.

Lead Generation Defined

Lead generation is a catch-all term for sales-driven communications activities built to attract an audience of prospective customers who, through their participation, identify themselves to the marketer and "opt in" to receive further contact, thereby becoming leads for sales follow-up. As commonly defined, lead generation can even include telemarketing style "cold calling" to phone lists, but for deep technology marketers, lead generation typically comprises marketing assets put on offer through online publications or portals for access by a targeted industry audience. Those assets typically include interactive marketing tools (educational webcasts, podcasts or online product demonstrations) as well as downloadable content of value (white papers, case studies, eval products or other software apps) channeled through online publications or portals such that audiences must provide contact information (name, company, title, phone, email) to access.

For those businesses that have committed to a lead generation effort, there are four keys to building and sustaining superior results from their programs. Think of them as the four "M's" of lead generation:

Metrics

Planning for success in lead generation is an intensive process (and a worthy topic for a separate article). As it relates to program management, good planning will include an eye toward the metrics that will define success or failure. The overarching measure of success, return on investment (ROI), can be simply predicted with a two-step equation:

Total guaranteed leads x projected conversion rate for leads = sales volume from program leads

Sales volume from program leads x average selling price (ASP) = estimated program ROI.

For example, let's say you contract with a handful of carefully chosen publishing partners for a six-month lead generation campaign, with a minimum guarantee of 3,400 leads at a cost of $194,000 (or about $57 per lead). Your VP of sales shows you that, on average, sales inquiries typically convert to sales at a rate of 2.1 percent. However, you realize that your first-time lead generation program may not generate a level of lead quality that matches the quality of your other sources of leads, so you work with sales to determine the rate at which only comparable leads have converted over the last 12 months, factoring away outliers—such as incoming phone calls and inquiries from existing customers—that could skew your estimated conversion rate toward a figure that is too optimistic for an untested program. You arrive at a conversion-to-sales of 1.4 percent. Taking your ASP of $9,600, you plug in your numbers:

3,400 leads x 1.4 percent = 47 leads converted to sales

47 sales x $9,200 = $451,200

For this program, the predicted ROI based on guaranteed leads is $451,200, or 232 percent.

101 percent ROI would be the obvious, absolute floor for an effective program, but obviously, you ought to aim much higher. (The 232 percent figure cited above is not unusual in our experience; more robust programs, particularly those that promote bigger-ticket products, can produce remarkable ROI.) We work with clients to define ROI goals based on margins, cost of sales and other factors that influence program profitability outside the scope of program spend, and if a program cannot pencil out to meet a reasonable threshold of success, the suitability of lead generation as a marketing strategy for that company or solution must be called into question.

Note that the above scenario cited guaranteed leads. Lead volume and cost-per-lead are vital measures of program performance. By working with publishers who put skin in the game by guaranteeing a minimum number of leads over an agreed-upon timeframe, you establish a hard goal for the campaign's lead volume while gaining accountability from the publishers. Moreover, you affix a maximum cost per lead to your campaign.

Methodology

Above, we characterized lead generation as the front end of a pipeline to sales. To serve that role effectively, lead generation programs must align with and make best use of sales and marketing processes. Establishing a framework for leads and their vital information to be available to and acted upon by sales, with participation from all key stakeholders, is essential.

A customer relationship management (CRM) platform is the engine of an effective lead generation program. With a solid CRM, all meaningful lead data from contact info to qualification and segmentation data are captured in a systematic way and seamlessly furnished to sales for appropriate and timely follow-up. As important, information about sales outcomes is tracked individually, providing critical data for evaluating campaign results.

At their best, lead generation programs will deliver data learned from qualifying questions—a handful of questions about a prospect's role, purchasing intentions, product needs and pain points that prospects must answer to gain access to your content. Those data, combined with a record of which assets or tactics correspond with different products or services in your portfolio, will feed your lead segmentation—the process through which you flag leads based on the solutions the individual is presumably most inclined to buy. This segmentation data not only guides your inside sales representatives (ISRs) in their follow-up, it also servers as a linchpin of any database nurturing activities, such as direct mail or email marketing, you may wish to pursue. As an example, one McBru client with a fairly broad product line segments its prospect database by eight unique solution categories, and their ongoing email marketing campaigns communicate with each segment based on its individual area of interest.

Materials

If a strong sales database is the engine of a lead generation program, quality content is the fuel. Whatever the mix of tactics deployed, your downloadable assets ought to be compelling, offering the prospect information that is new, thought-provoking and valuable to their work. If your whitepaper is nothing more than a long-form sales pitch, there's a good chance your new prospect didn't find it worth the time he spent downloading it, making him decidedly less receptive to your marketing messages, not to mention your ISR's follow-up call. Similarly, your webcasts should walk the line between sharing an editorial perspective on solving an industry challenge and overtly pushing your products; valuable data and a journalistic tone will help your webcast's messages find their target.

For webcasts, white paper downloads or any other content, regular updates to your documents and a steady supply of new materials are important. Many campaigns will rely on multiple content assets at the outset; moreover, our experience shows that downloadable assets dramatically lose their ability to pull leads after six months of promotions to large audiences; for online publishers with smaller audiences, performance plummets after just three months in rotation.

We almost always negotiate with publishers promotional programs and traffic drivers to support a client's program. In parallel, we design the creative—banners, text ads, or similar content—to bolster promotions for podcasts, webcasts or microsites. Marketers need to understand and must consider how these requirements may impact resources and ROI. Separately, consider how your own emarketing efforts and online advertising might help fuel traffic to your lead generation activities; many publishers will offer "tracked links" that allow you to drive registrations to your webcasts or podcasts without counting the leads against your guarantees.

Minutiae

Many marketers don't realize the day-to-day activities and depth of detail involved in successfully executing a comprehensive lead generation program. Before kicking off a new campaign, marketers will do well to review the list of deliverables involved and understand the time commitments needed to meet them. A single downloadable asset can require a PDF file conversion, 15 words of text link copy, a 30-word description, a 75-word description, the appropriate qualification questions, a pointer to a landing page and a completed checklist that influences where and how it will be promoted. All of that pales in comparison to the time needed to polish up a relevant sales deck for use with a webcast, coordinate a speaker from your business, arrange a second speaker from a partner company, complete the laundry list of deliverables to support promotions, practice and execute the live event and assure a quick and accurate transition of leads from your publisher to your CRM. In short: Make sure you have the help you'll need before you need it.

The Fifth "M"

Metrics are so important in a lead generation program that we must visit the subject twice because, for us, it's all about results. For budgetary reasons, and because it allows a great deal of flexibility in planning and updating campaigns, most lead generation programs are planned and bought on a quarterly or six-month timeframe. As one program winds down, planning for the next is well underway. Using the ROI calculus and CRM tracking outlined above, the ongoing planning process is fueled by inarguable data that help the marketer adjust spend, renegotiating or dismissing underperformers and rewarding publishers and strategies that deliver.

Measuring results should always refer to back ROI. How did the ROI formula shown above bear out, factoring in the time needed to complete sales cycles? What was your overall conversion to sales and how will you adjust your predicted ROI accordingly?

The data available from a full-fledged lead generation program can be sliced countless ways to answer a host of insightful questions. By publisher: Who easily met lead guarantees, and who struggled or fell short? Webcasts should outconvert whitepapers or case studies relative to their higher cost per lead—did they? How does that influence your budget allocation between webcasts and whitepapers? How did your tactics, assets, solutions and publishers perform in terms of average deal size?

Most important, how did those leads perform by tactic, asset and publisher, with performance defined as conversion to opportunity (did they take a sales visit, or agree to an evaluation, or furnish an RFP?) and/or conversion to sales? We've managed large-scale programs where one publisher has more than tripled the mean conversion-to-sales rate of the entire program while another publisher converted half-a-percent to opportunity and not one sale within the same timeframe. Manage your lead generation programs like a sports team or a symphony: Weed out the underperformers, reward the consistent achievers and provide the leadership and resources to nurture success. Over time, the intelligence you gain by evaluating and acting on your results can help you take your lead generation campaigns from good, to sterling, to bulletproof as you feed the sales engine with well-qualified leads and built-in, measurable ROI.

Feel free to reply about your challenges and successes in lead generation management. In the meantime, good luck with planning your next quarter, six months, or perhaps even year of lead generation activities.

Thanks for reading,

James McIntyre
Senior Counsel
McClenahan Bruer Communications

Next month: Positioning and messaging—too often, the ugly step child.