7 Outrageous Lead Management Errors and How to Fix Them

In last month’s blog post we introduced the five core marketing processes essential to effective and efficient marketing operations. This month we will delve into the first, and most important of these processes, the lead management process.

First, people forget that if you buy a list, or otherwise get a set of leads that have had no communication with your firm, don’t even know how to spell your company name, you cannot import them as “Inquiry.” You need a lead status to reflect individuals who have had zero interaction with you. “Raw” is a good value for that. And whatever you do, do not market to them like they are in any of the other statuses. They are different and need special treatment.

The other error I see is that people put call dispositions into the lead status field for the LDRs; things like “Attempting Contact”, or “Left Vmail.” These are call dispositions, they are not lead statuses. If you have a LDR group, whose output is the MQL passed to sales, then the lead statuses you can add are MAQL (Marketing Automation Qualified Lead from your marketing automation lead scoring algorithm), LAL – LDR Accepted Lead, and lastly “Re-Market” – a place where the LDRs can send the leads when they are not ready to move forward. Do not put the LDR reviewed leads back into Inquiry.

Lead Processing and Routing Flow Design

So check out the graphic below; looks pretty solid right? You’ll probably tell me that Opportunities and Won aren’t actual lead statuses and so don’t belong on here, and they don’t have arrows of lead flow coming out of them really. OK, I get that, but this graphic represents how most people believe lead processing happens, and it is wrong in an important way.

How People Think Lead Processing Happens
How people think lead management happens.

The big error in the single funnel view is that it overlooks the funnel of SQLs that marketing helps produce from “Contacts.” In the most common CRMs, Dynamics and SFDC, you have a concept of Leads and Contacts. They are different objects within the CRM, and a person’s information should be stored in one or the other but not both simultaneously. Shifting a person’s information from the lead object by creating a contact to store the data is called “lead conversion.”

In the flow above people typically convert a lead in the SAL status to a Contact as it changes lead status to SQL, i.e. the final converted lead status is SQL, and it will remain as such forever since the person no longer exists as a Lead in the system, they are now a Contact.

Many companies neglect to create Contact status fields, or build a funnel, just like the one above, for Contacts. This is a big mistake, since many SQLs, who are Contacts, not Leads, will cycle back to being in a “Re-Market” state, and marketing will nurture them, warm them back up to MQL and want to pass them to sales again. Without the contact status field, which mimics the lead status field, you cannot do this, and marketing may be greatly underestimating their SQL production and consequent influence on revenue.

Lead Scoring Algorithm

The lead scoring algorithm is built into the marketing automation platform after sales and marketing have had their meeting to agree on what constitutes a qualified lead.

The big mistake people make here is thinking this is a “set it and forget it” situation. It is not. You will want to all agree on how many points from demographic, firmagraphic and behavioral data combine to yield a qualified lead.

Let’s assume for a moment that 100 points is the threshold for MQL status. Don’t change this bar. It will get locked into people’s heads and you don’t want to mess with it. However you can and should alter how many points are given to which attribute or behavior, thereby making it easier or harder to achieve the 100 point level. You can vary the rate at which points from behaviors decay back to zero. You are highly unlikely to get the lead scoring perfect right out of the gate, so be prepared to dial it in over the course of a year or more.

Document a Service Level Agreement (SLA) With Sales and Marketing

So you got agreement with sales on what consititutes a qualified lead, and they agreed to follow up on MQLs within 48 hours. Fantastic! Did you document this? I know you can measure MQL quality because that is what lead scoring helps do. You can measure the effectiveness of the lead score based on how many leads your LDRs or Reps are converting to SQLs vs sending to Re-Market or Disqualify status. But the error many firms make is that they don’t measure how long the leads sit in MAQL or MQL status, i.e. they don’t measure if sales is holding up their side of the bargain and following up promptly on leads. This is not hard to do. It could be as simple as adding a field to track “age in stage” in the lead status field, and it will show how long your hot leads have been sitting there. Failure of sales to follow up on hot leads is a tragic error.

Establish of Funnel Metrics

If you have implemented a suite of lead status and contact status values that are MECE (mutually exclusive and collectively exhaustive), then you are well on your way to being able to do funnel metrics with ‘no lead left behind’! The error that we see happening here is that people expect their funnel to operate in a nice linear fashion … leads progress from Inquiry to MAQL, to LAL, to MQL, to SAL and onto SQL. Good luck with that. They don’t.

For a start, you will have LDRs pulling leads forward when they (the LDRs) are idle, so they pluck the warmer ones out of Inquiry and make them LAL or MQL. You will run an ABM campaign that generates new leads in existing known accounts, and the best thing to do with them is convert them from leads to contacts and in so doing move them from being in Inquiry as a lead, to Inquiry as a contact. No, they are not automatically made into SQLs. These are just a couple of examples. These are tractable issues, you just need to prepare for them in your funnel metrics.

Next Steps

You probably already have a lead management process, and perhaps this litany of errors has inspired you to take a second look at it. Here is the priority order for your audit:

  1. Review the qualified lead definition with sales and marketing in the room together.
  2. Review your lead status values to ensure they are MECE and remap the values in any leads in your system that have deprecated values.
  3. If you haven’t set up contact statuses to measure SQLs generated from contacts, now is the time, especially if you are planning ABM campaigns.
  4. Examine the efficacy of your lead scoring. Plan a quarterly tweak.
  5. Start measuring the “age in stage” for leads.
  6. If you are not already doing it, start measuring not just the quantity of leads flowing through the funnel, not just the stage conversion rates, but the velocity (you will need “age in stage” for this). You’ll be surprised by which leads from which lead sources are slow movers…

For more info on lead management check out the resources on our website and grab a copy of this whitepaper. In the next post on our Revenue Marketing Journey we will discuss marketing operations reporting and analytics related processes in more detail, and how to transform your marketing organization into making data-driven decisions. Please feel free to share your insights on these topics in the comments section below or email me directly at kevin@pedowitzgroup.com.

Author: Kevin Joyce

Kevin Joyce is VP of strategy services for The Pedowitz Group. He's a marketing executive with 34 years of experience in high tech, in positions in engineering, marketing, and sales. In the past 16 years Mr. Joyce has worked with many companies on their revenue marketing and demand generation strategies. With a unique combination of marketing skills and sales experience he helps bridge the gap between sales and marketing.

Mr. Joyce has successfully launched numerous products and services as a Director of Product Marketing at Sequent, as a Director of Sales at IBM, as Vice President of Marketing at Unicru, and as CEO at Rubicon Marketing Group. He has been VP of Marketing Strategy with the Pedowitz Group for more than six years. He holds a BS in Engineering from the University of Limerick, Ireland and a MBA from the University of Portland. Connect with Kevin on LinkedIn or email him at kevin@pedowitzgroup.com. Download TPG’s new white paper: "TPG ONE: A New Approach to the Customer Journey."

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