New Survey Shows Firms Focusing On Demand Generation Are Outgrowing Their Competition
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Companies with effective lead generation strategies are more likely to outgrow their competitors, according to the findings of a recent research study conducted by Marketing Profs and the Lenskold Group. The report titled “BtoB Lead Generation: Marketing ROI & Performance Evaluation Study,” explored the practices companies are utlizing to track the performance and return of their marketing efforts.
According to the study, more than half (57%) of those surveyed expect to outgrow their primary competitors in the upcoming year. The survey also pointed to a direct correlation between lead generation capabilities and the growth of an organization, with a combined 58% of those companies outgrowing competitors describing their lead generation performance as much more or somewhat more effective than competitors, compared to just 20% of those whose growth was lagging behind competitors.
SCORING SALES
The report also showed that those companies who are actively measuring and evaluating the ROI of their lead generation efforts are ultimately seeing better results. Where less sophisticated marketers are concentrating purely on increasing the volume of leads, the report’s author Jim Lenskold pointed out that reducing the number of leads can often result in more profitable growth.
“You could grow the quantity of the leads and start hurting the growth of the company,” Lenskold said. Putting too much emphasis on quantity over quality results in a budget overhaul—as companies may end up spending more to generate leads than they end up getting back. “You have to make sure you’re generating more profit than the cost to generate the leads,” Lenskold said. This can ultimately stunt the growth of a company, since the focus is not centered on the importance of each qualified lead to the company.
Lenskold also notes the importance of closed-loop feedback, which helps companies see how leads progress and and ultimately which leads are converting and aren’t. Dashboards and analytics tools are helping leading companies determine which leads were converted from different sources with different value. “That’s just natural because we’ll have different tactics that will appear to different buyers, possibly at different stages of the buying process,” Lenskold said.
Approximately 52% of respondents said they do not use financial metrics to measure marketing activity. Lenskold said this is where companies come to a halt in their growth. “[Companies not tracking marketing efforts] are marketing with a big blind spot,” he says. “They may even consider it effective, but they will focus on what they can track and measure, which is typically quantity, not quality. Lead scoring can be helpful, but you’re not going to get to that point unless you decide you want to score leads based on their probability of converting and the probability of generating more or less value. In that area where the information is missing, it’s a blind spot. How can you generate growth without getting the information that allows you to spend more on the prospects that are generating high value?”
Lenskold pointed to the following factors which typically drive ROI:
• How many leads are ultimately going to convert into a sale;
• What’s the average value of the conversion (how much profit made from customer);
• What’s the cost to convert leads;
The study also supported the ROI of those companies who built alignment between their sales and marketing teams. Of the respondents who projected they would outgrow their competition, those sales organizations gave higher marks to their marketing team’s performance and the alignment of sales and marketing. In addition, comparing those who rate their marketing effective to those who rate their marketing less effective shows higher positive rating for quality of leads (56% vs. 20%) and for conditioning leads to create higher preference and conversion rates (46% vs. 13%).