At FrodX, we disqualify 75% of our leads

FrodX / / Inbound Marketing

A couple of months ago, I had a talk with my boss regarding marketing success measurement. We were trying to figure out how to measure success in marketing and how to define whether my paycheck should be doubled or cut in half.

An absurd situation in a company where EVERYTHING is measured in marketing. The organization knows everything about their leads except their shoe size (and if they went into the shoe business, they would have that information too), and measure the success of every web page with an accuracy of two decimal points. It seems absurd that we had trouble figuring out what constitutes good or bad performance of the marketing department in an environment where a huge screen with charts of current website visitors and conversion rates hangs on the wall.

The discussion started with two usual positions. The marketing director proposed company revenue as the deciding factor, and I was claiming that this shifts the responsibility of the sales department’s performance to marketing and that the contribution of marketing should be measured directly – by generated leads.

The contribution of marketing should be measured directly - by generated leads. Click To Tweet

We quickly realized that none of us were right. Revenue is often a distant metric that cannot be used for evaluation, but on the other hand, it’s also true that marketing could provide 100 times as many leads if they offered free handouts in exchange for data. Of course, such leads would not generate any revenue for a company selling software to industrial customers.

The benchmark for successful marketing is somewhere in between. It still requires lead evaluation, but can only measure qualified leads, which become the responsibility of the sales department. That leaves a key question – what is a qualified lead, exactly? A customer who shows interest? Maybe it’s a company that you would like to reach out to? Practice shows that qualified leads are those who meet both criteria, which is what makes measurement so difficult.

This diagram provides a simple view of four lead segments that every company has to deal with. Only the ones in the top right part are ready to talk to sales. We get into trouble the moment we try to determine criteria for such segmentation. The sales department has to deal with the fact that a determined (and known) number of leads are so good, that a fizzed opportunity can only be assessed as a mistake. Sales would, of course, like to think that only the leads who have already asked for a proposal are considered qualified leads.

Marketing, on the other hand, must face the fact that only 25% of their leads are useful. Certainly, many leads flow from the blue squares into the green ones (the diagram would be too complicated if time was added to the equation), but that’s not a consolation.

… this is why 75% of Frodx’s leads are disqualified – not permanently, but relegated to a waiting list. If and when they mature, the sales department will focus on them. Until then, we will mostly communicate through blogs and webinars.

We disqualify 75% of leads – not permanently, but relegated to a waiting list. Click To Tweet

Now we ask ourselves some hard questions. Do you measure success in marketing so both the sales and the marketing departments are satisfied? Do your activities focus on the green square in the diagram? When we notice that you have seriously decided to move in that direction, you will be a step closer to being contacted by our sales department.

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P.S.: Accurate measuring of marketing activities (and lead quality) requires a structured approach to marketing. Our free marketing planner will definitely help you approach evaluate your marketing practices.

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