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Why Demand Generation Shouldn’t Be Focused On Marketing Qualified Leads

ABN_-_Headshot_-_22_AUG_2011-150wBy Adam B. Needles, Author, “Balancing the Demand Equation”

We're at a crossroads in modern B2B demand generation.

Fifty-eight percent (58%) of marketing automation adopters cite “generate more leads” as a key motivator, according to Gleanster. Similarly, 78% of B2B marketers report “generating high quality leads” as their greatest B2B marketing challenge in MarketingSherpa’s 2011 B2B Marketing Benchmark Report.

Yet a 2011 joint study by Vorsight and The Bridge Group noted, “On average, sales reps report that only 31% of all leads generated fit their ideal customer profile. Said another way, sales reps believe roughly 70% of the leads they receive have a low probability to purchase.”  And data from a recent IDC Technology Marketing Barometer Study indicates that year-over-year, between 2011 and 2012, our marketing and sales alignment around demand generation has actually gotten worse.

What’s going on? 

Despite our talk of a new relationship between marketing and sales and our investments in marketing automation technology, our view of B2B demand generation remains myopic. We continue to embrace a tactical and marketing-centric view, where we have traded one set of activity-based metrics for another.

Goodbye, impressions and awareness. Hello, MQLs (AKA “marketing qualified leads,” as SiriusDecisions has dubbed them).

B2B marketers are investing more than ever in programs to automate the delivery of MQLs. Still we fall short of sales’ expectations, and we are clearly not optimizing lead-to-revenue demand processes.

This was not how it was supposed to be. The original intent was to up the ante on the level of qualification of a lead before it goes to sales. A noble goal.

But the truth is the sales-team definition of a sales developed lead (i.e., SDL) is not aligned with our marketing-team definition of an MQL. Our sales counterparts are optimizing against revenue conversion in the next month or quarter; whereas our MQLs tend to look only at “potential.”  They are focused on the end goal, but we are focused on an intermediate goal.

Ironically, MQLs may actually be what is wrong with B2B demand generation – and may have marketing and sales working against each other.

It’s time to abandon MQLs and SDLs, instead thinking in terms of a “revenue-qualified” lead – with a common marketing and sales understanding of this definition.

This is a critical step towards aligning against a strategic lead-to-revenue demand process, but there are a few other points to consider:

> An over-focus on MQLs perpetuates siloed, non-orchestrated marketing and sales engagement with the buyer.

As I noted above, when we are over-focused on MQL delivery, there is a high probability we are delivering something different from what our sales colleagues, themselves, are developing and expect. This literally causes a break in the process and discontinuity in our interaction with the buyer.

We need to educate and qualify buyers in an orchestrated and uniform fashion across marketing and sales touch points.

We also need to remember the buyer is singular. There can only be one “qualified” state for each individual buyer; thus, different definitions serve only to derail our alignment.

Moreover, that common “qualified” definition should reconcile our organization’s internal concept of “qualified” with the external, “organic” point in the buying process where a buyer is actually ready to engage with us.

And this is an important point that often gets missed in B2B demand generation:  It is the buyer’s content consumption path – and his/her needs – that should define the core logic of our demand processes, with marketing and sales efforts orchestrated around this process, not vice versa.

> Most sales organizations source the majority of the leads, anyway.

A recent Forrester report by Lori Wizdo noted, “On average, tech marketing is generating only 27% of the sales pipeline.”  This aligns with a range I’ve typically seen of between 15% and 40% of sales opportunity pipelines being contributed by B2B marketing teams.

It doesn’t matter how much new technology and process we bring into the mix, there will continue to be a natural ratio where sales team members will always contribute a portion of their own opportunities into the mix. And this isn’t bad. A smart sales person is constantly trolling for additional opportunities. This shouldn’t be squashed; rather, it should be enabled. And our model should assume sales-sourcing as a critical contributor to our pool of revenue qualified leads that we’re nurturing.

> Regardless of the source, every lead should be “marketing influenced” … and “sales influenced.”

A final point in all of this:  It’s the deciding of who “sourced” or “qualified” a lead, in a black-or-white fashion, that often is a fundamental disconnect in the process. What I’m advocating is for a more collaborative effort – shades of grey. The truth is that some leads will be sourced by marketing, and some by sales – probably the majority by sales, to be brutally honest. But every lead at every stage should be “influenced” by marketing … and by sales, and by a combination of automated and live nurturing.

So let’s re-set our perspective on B2B demand generation – realizing from the get-go that it must be integrative and must drive towards a common demand process, so that we’re all working towards a common revenue outcome.

Adam B. Needles is a passionate B2B marketing change agent — helping companies build successful, modern, buyer-centric demand generation programs and transform their lead-to-revenue demand processes to drive profitable revenue growth and build sustainable brands. He is the author of “Balancing the Demand Equation:  The Elements of a Successful, Modern B2B Demand Generation Model.”

Adam has led marketing strategy and B2B demand generation programs for dozens of companies since the late 1990s. These include publicly-traded, Fortune 500 companies such as CA Technologies, Dell, E*TRADE FINANCIAL, Lenovo, Motorola, Pitney Bowes, Platinum Technology (acquired by CA Technologies), PNC Bank, PTC and Target. LinkedIn:  http://www.linkedin.com/in/abneedles Twitter:  @abneedles