How Not to Buy Leads
A prospect defined leads as loosely as I have ever heard. Any employee of a targeted company needed only download some content to be qualified as a lead. It didn’t matter if they were ready to buy – or even qualified to buy. If they worked for a targeted company and downloaded content, they were a lead.
I challenged him on the value of these so-called leads. His response was that the recipients of the leads were interested in having a relationship at any level in targeted organizations. I doubt that is how the lead recipients feel.
Here, in my opinion, is what is wrong with this approach to lead generation:
Lower-level workers are 2.5 times more likely than higher level executives to download content. Lower-level workers give up their digital body language (score points in marketing automation) readily while more senior executives do not.
Not every deal has to be sold to the President or CEO. However, it is much easier to navigate from the top down than it is to navigate from the bottom up. The lower-level employee downloading content is likely the last person you want to start a sales cycle with.
Finally, the lead definition was being driven by the objective to reduce cost per lead and not by the objective of providing real value to sales.
During another prospect call, the contact stated that his source of leads, appointment setting, ended up with just four out of every 10 leads delivered being qualified. The cost of an appointment was $900.
More than half of the appointments generated weren’t qualified, so that means the cost per qualified appointment was $2,250.
It is highly likely that this buyer would never have agreed to spend $2,250 per lead – but he agreed to spend $900 per lead with 60% of the leads being disqualified—a waste of both money and sales’ time.
Neither one of these marketers were buying leads for low-cost commodities. They both sold relatively expensive software solutions. In the first case, the maximum allowed cost per lead was $650. In the other case, it was $900 (with an effective cost of $2,250 per qualified lead). In both cases the decisions were being made by intelligent people who cared about their jobs. Their jobs unfortunately came down to providing poor quality leads to sales. It happens all the time.
In both cases the sales rep receiving the leads would follow-up on the first and maybe the second batch of leads and then disregard every subsequent lead that came from those sources. I estimated that the qualification rate on the $650 leads was about 50%; and we know the qualified rate on the second source of leads was 40%. No sales rep is going to follow-up on leads where only half of them are qualified.
Stop bombarding prospects with poor quality, irrelevant offers. Stop pushing for the appointment. Don’t let junior telemarketers reading from a poorly written script corrupt your market. Want to know how much a lead should cost? Go here and find out. Then call me. Let’s talk.