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Lead generation: you're doing it wrong (Part 1)

July 6, 2021

This is what lead generation looks like at most B2B/SaaS companies:

lead-generation-doing-it-wrong-infographic

What’s wrong with this picture?

It’s a system based on volume, rather than actual, real buyer intent.

As long as 1,000s of leads are entering the pipeline every month, we’re happy.

But how many of those leads are actually converting? Just because a lead meets the MQL criteria, for example, doesn’t mean they’re actively looking to buy, right this second.

What’s the impact of this?

It means that supposedly “qualified” leads are being handed over to AEs, who then struggle to close accounts they were told were ready to buy.

And that can have some devastating consequences for the revenue team’s efficiency.

  • Sales start to mistrust the leads handed to them by marketing.
  • SDRs waste time sifting through large numbers of poor-quality leads.
  • AEs conduct demos with prospects who have no interest in buying the product.
  • Targets are missed, revenue goes down.

It doesn’t have to be this way.

What if we changed the system to focus on true, high-quality, high-intent ICP leads? Leads who have a high intent to buy and aren’t just there to fill an MQL quota?

Chris Walker, CEO at Refine Labs, has identified why lots of B2B/SaaS firms resist this change.

“Lots of marketing teams are trying to transition to Demand Gen but regress back to Lead Gen during this adjustment in go-to-market strategy because executives get scared that “leads” are going down.”

But what’s the point of generating 1,000s of leads if conversion rates are stuck at less than 1%? Wouldn’t it be better to focus resources on a smaller cohort of leads, who fit your ICP and are actively engaging with your brand right now?

Chris explores this idea further:

“‘Leads’ go down by 90%. Qualified pipeline goes up.”

“The reason is that the 90% of leads that go down don’t convert anyway. Because they’re on a lead gen model with no buying intent & never make it to a qualified opportunity.”

In this system, less is more. It sounds scary. But it can drive significant benefits for the whole organisation.

  • Sales and marketing are closely aligned, with marketing generating high-intent leads that convert at a much higher rate.
  • SDRs have more time to create their own content and engage directly with buyers.
  • AEs have the space to build genuine relationships with prospects, increasing closed-won rates.
  • Targets are hit, revenue goes up.

So how can B2B sales and marketing teams reach this new, better state?

It requires nothing less than a wholesale revamp of how lead generation is done.

Here’s how to do it 👇

Change the way you define a “lead” | Only measure revenue | Stop asking your SDRs to qualify leads | Send high-intent leads straight to your AEs

1 - Change the way you define a “lead”

According to Chris Walker, too many B2B/SaaS orgs define their leads like this:

“Anyone who gives us an email address for our eBook.”

When laid out like this, you can immediately spot the problem. There’s no correlation between downloading an eBook, say, and actually being keen to invest in a product.

A name, a job title, a company name and an email address have nothing to do with the lead’s buying intent. This is purely an exercise in contact acquisition.

So that hot lead from that big name brand has signed up for your webinar or bagged themselves your latest whitepaper. It doesn’t follow that they’re instantly ready to jump on a demo.

Chris suggests that the definition of a lead should be changed to:

“Anyone who fits your ICP and comes to you on their own and says: ‘I want to speak to sales about your product.’

This type of lead shows an extremely high level of intent. They’re interested, they’re invested. They want to sit on a demo and learn more about your product.

And aren’t those the kind of leads that every company wants?

2 - Only measure revenue

If the definition of a lead has to change, then so too does the way in which we measure those leads.

Chris Walker argues that SaaS sales metrics based on volume aren’t just ineffective, they’re highly damaging.

“If your SDRs are calling 1,000 people, and 999 are not going to buy, that’s a BIG PROBLEM.”

Generating as many leads as possible is a pointless exercise because so few of them go on to become customers.

And sales and marketing are so focused on hitting arbitrary SQO/MQO targets, that resources are wasted on low-intent leads, while real, genuine, high-intent leads slip through the net.

So what should be measured?

Success should be based purely on revenue. Did the lead convert and how much revenue did they bring in?

Chris highlights the positive impact this can have on sales and marketing:

“Instead of spending all your marketing dollars & effort collecting “leads” that don’t convert to qualified pipeline, you can deploy all those resources focused on generating more leads that convert with significantly better conversion rates (approx 20X better).”

“And when your Sales team isn't chasing around thousands of "leads" that don't want to buy, they can focus on closing the people that do want to buy.”

3 - Stop asking your SDRs to qualify leads

The typical lead handoff in most B2B/SaaS sales teams goes like this:

  • The SDR sources the lead (either via marketing or outbound).
  • The SDR qualifies the lead based on a specific formula.
  • If the lead is “qualified”, the SDR passes it on to the AE.

But does it work? For all their drive and hard work, SDRs are still the least experienced people in the process. Why are we asking them to qualify on behalf of more experienced AEs?

And what about those new high-intent leads you’ll be bringing in? Is there much point in handing them over to SDRs to qualify? As far as your business is concerned, they’re already qualified.

So - stop routing every new lead to your SDRs. Why not start sending your highest quality leads direct to your AEs?

Doing this will free up time for your SDRs. Instead of spending hours sorting through leads, they’ll be able to concentrate on:

  • Establishing credibility in their industry and building their own networks.
  • Devising their own content strategies to attract and delight buyers.
  • Researching new opportunities and starting conversations.

Clarisse Jactat, SDR Team Leader at PickYourSkills, has seen first-hand the benefits of this approach:

“AEs insights have a direct impact on our SDR team: they spend less time looking for new prospects or dealing with inbound prospects that are not qualified. They can focus on the ICP target, reminders, calls, etc.”

4 - Send high-intent leads straight to your AEs

What’s the number one source of frustration for AEs?

Presenting demos to prospects who don’t want to buy.

It happens all too often in B2B sales. The crucial point is - it doesn’t have to.

What if the majority of leads an AE received weren’t just interested in your product - they had their fingers poised over the “Buy” button? What would that do to win rates, revenue, team morale?

This is what can happen if SDRs and qualification criteria are removed from the equation.

Here’s what you should do from now on:

For leads with high buying intent - send them straight to your AEs.

Don’t put them through the SDR qualification process. They don’t need it. Give them to your most experienced people and let them manage everything end-to-end.

Your AEs will love you for it. They’ll be able to:

  • Conduct demos that have a much higher chance of success.
  • Work on nurturing prospects over time and increasing LTV.
  • Perfect the art of closing and boost their own effectiveness.

Clarisse Jactat explains how this works at PickYourSkills:

“The AEs are the ones determining what criteria make qualified leads, which allows the sales department to be more efficient.”

“In fact, AEs have a better understanding of the prospects’ challenges and great product knowledge and expertise, due to the client portfolio management.”

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