What Is A Lead, Anyway?

Published: July 23, 2013

By Todd Davison, CEO, Demand Frontier

One of the many things I’ve enjoyed over the past 10 years in our industry is the ever-evolving definition of marketing. We’ve gone through concepts such as lead generation, demand generation, revenue performance and content marketing so fast it’s hard to know what to call yourself.

By Todd Davison, CEO, Demand Frontier

One of the many things I’ve enjoyed over the past 10 years in our industry is the ever-evolving definition of marketing. We’ve gone through concepts such as lead generation, demand generation, revenue performance and content marketing so fast it’s hard to know what to call yourself.

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It’s pretty much all the same from my perspective. What has changed — dramatically — is the true evolution of the science and art of it all. I still believe we are in the earliest phases of marketing automation, Big Data, mobile and social media. It was in this vein that I recently had an interesting debate with a friend over drinks about what is a lead these days, anyway?

Before we get into the teeth of the debate, let’s think about where lead generation has come from so quickly. Not too long ago, a “lead” was defined as a person who had taken an action to click through an invitation link to a landing page, and fill out a pretty long registration form. People who went through these steps had to be pretty motivated to get to the content, resulting in a higher quality lead pool.

Times have changed. From a marketing perspective, we’ve worked hard to increase the consumption of our content and improve the performance of our programs. We’ve shortened registration, appended data systems, improved our targeting, and integrated to more platforms to make it easier to engage. Media and lead gen companies have taken similar strides, so that they can increase the quantity of leads to sell to marketers.

The result is a blurry line of what actually constitutes a lead. When does a contact record move from being data, which you can buy pretty easily for $.25 to $1.50 per record, to a lead, which will run you $30 to $120 for the much of the same information? What about the ability to target based on predictive data? Are those targets leads? Do they have to respond to your content to count as a lead?

At more than 10 times the price, that’s a big difference. For what? The value is the activity. If you are going to pay 10 times the price for something, then having a clear understanding of what the activity is becomes a pretty important question.

So, let’s get back to the question: What is a lead? If you are an enterprise marketer these days, you probably get bombarded with lead generation and data offers. The claims of quality and effectiveness can be dizzying, and prices can vary wildly. But what activity crosses the line from data, and becomes a lead? Most lead gen vendors take click-through information — on links, articles, white papers, webinars, etc. — and append the information they already have to become a “lead.” So is a click a lead?

On the other end of the spectrum, organizations are implementing nurturing programs, pipeline definitions, lead scoring, multiple stage lead definitions, and sales engagement to define a whole new range of sales-ready “leads.” So, is that a lead? I think the answer to all of the above is yes.

I have found that the best way to manage this complexity is to keep it simple. Focus on the stage of your pipeline when a lead becomes “qualified.” This typically happens when a lead gets scored, routed and “converted” by an inside sales team. Pay attention to which lead sources convert the most and have the most efficient cost. By doing this, you can open yourself up to experiment with more lead generation sources and strategies. You may find that the most expensive lead actually does convert better, so the cost per qualified lead is lower.

Or, you may prove the opposite. You may find a low-cost provider can drive high volume and scale. Compare those metrics with the performance that you generate through your in-house efforts. In any case, by having one conversion and cost metric to watch, you’ll be able to simplify the decision process, and weed out the winners and losers more effectively.

I don’t know whether we answered any questions over those drinks, but I did enjoy the debate.

Todd Davison is CEO of Demand Frontier, an executive consulting company. Demand Frontier’s value proposition is based on addressing specific client pain points that are omnipresent in B2B marketing.

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