Sales Tips: What is a Lead?

The leads are weak!" If you don’t remember the interaction between a young Jack Lemmon and younger Alec Baldwin in the 1992 classic, Glengarry Glenn Ross, find it and watch it.
Unfortunately, the theme of that dark movie is repeated in the halls of marketing and sales today in most every company.

I will never forget working with Peter Evans, then SVP, Marketing at Internap (now CMO, Enterprise Solutions at Dell). He offered sales management the following choices regarding spending a $100,000 budget to generate leads:

1. 200,000 targeted contacts (name and title) in the right vertical (no email addresses)
2. 100,000 companies with up to three executive contacts in the right company (no email addresses)
3. 20,000 companies with multiple contacts and verified technical environment information in the right companies (no email addresses)
4. 4,319 contacts who downloaded a white paper but may or may not be in targeted companies or have any need or authority to buy (email addresses, many bogus and no company firmographics and no telephone numbers)
5. 117 appointments with people in the right companies but may or may not have any need or authority to buy
6. 81 highly qualified sales opportunities with the right contact who has a need backed by some form of compelling event

He was trying to make a point with his offer. His point was that he was happy to provide sales with whatever they would accept and take action on. However, if sales treated highly qualified sales opportunities as though they were random contact names he was not willing to spend the money to find those leads—often as hard to find as the proverbial needle in the haystack.

About a year ago I interviewed Lori Wizdo of Forrester Research about leads.  I asked her to comment on the fact that some sales professionals believe they can’t get qualified leads from marketing. Here is an excerpt from her excellent response to that question:

“I don’t see a lot of change in this area over the next year. There’s a big difference between what marketing sees as a lead right now, in general, which they often see as someone responding to something we sent out there that was relatively targeted. Twenty years ago, people would just buy a list and call it leads. That’s a big improvement. Of course, that’s still nowhere near what a sales person would consider a lead.
“We’ve got to firmly understand the leaks and the mistrust between marketing and sales over leads. Marketers don’t always have the greatest track record for delivery. When we survey marketers, we ask what percent of their pipeline was the result of a marketing program. That number was 50 percent this year, and it was only 38 percent last year. The number came up quite a bit, but it’s still pretty low. Smaller companies might be doing something like 90 or 70 percent, and I’ve even met clients who have 100 percent of their pipeline coming from marketing.

“In large global companies, sales professionals haven’t seen leads from marketing, ever. Those companies will answer that question in the range of 5 to 15 percent. In general, that’s why marketing doesn’t have a track record of providing pipeline-impacting leads to sales.

"I see people moving beyond campaigns. People will still do their four-step campaigns, but they might hold on to leads from marketing more while tightening up their lead scoring. I still think marketers are erring on the side of sending leads to sales when they’re still immature, largely because there’s still a clamor from sales: ’gimme leads, gimme leads, gimme leads.’ Even though the sales reps think they’re empty calories, they’re still drinking the soda. It’s going to take more than a couple of years for that to change.”
The Truth About Leads documents the following as definitions of a lead:

Dictionary - Lead: (leed) n. An individual or company with an actionable need for a service or solution.
Wikipedia had this to say about leads: The identity of a person or entity potentially interested in purchasing a product or service, and represents the first stage of the sales process. Sales leads come from either marketing lead-generation processes such as trade shows, direct marketing, advertising, Internet marketing or from sales person prospecting activities such as cold calling. For a sales lead to qualify as a sales prospect, or equivalently to move a lead from the process step sales lead to the process step sales prospect qualification must be performed and evaluated.
Also in the book, I suggest that the lack of a universal lead definition (agreed upon by marketing and sales) leads to the following conditions suffered to some degree by every company:

1. Forecasts are thin and inaccurate
2. No closed loop to measure the effectiveness of marketing programs
3. No consensus regarding marketing and sales strategy, including what I call M2O (market, media and offer).

So, if you are a senior executive in any size company the bad news is “the leads are weak.” The good news is the problem is fixable:

1. Establish a universal lead definition (agreed to by marketing and sales and probably NOT based on BANT [budget, authority, need, timeframe] or ANUM [authority, need, urgency, money]).
2. Establish an unbiased review team to examine EVERY lead that is not proactively accepted or is proactively rejected by sales and fix what is broken.