Friday, January 24, 2003

The Fallacy of Qualified Leads

"We don't get enough qualified leads!" How many times have you heard your VP of Sales make this statement? The common answer from marketing is "we have generated lots of leads, but sales doesn't follow up on them." "But these leads are not qualified", would be the familiar rebuttal from the sales trenches.

The reason this is such a frequent scene in the enterprise software world is rather obvious: what sales considers a Lead is not what marketing calls one. Marketing is looking for interest; salespeople look for budget, authority, and decision timeframe.

I know it may sound counterintuitive, but here is my take: the most probable way to guarantee that your lead generation efforts miss what sales calls "qualified leads" is to aim for those that are late in the buying cycle.

Let me explain. Buyers that are actively looking usually make an effort to find and evaluate potential solutions. If such a buyer is not talking to you, it could be for a number of reasons:

  • She never heard of you.
  • He doesn't think you have a viable solution.
  • They have already narrowed down the field.

All of these reasons are best addressed by finding qualified buyers early in the buying cycle, or even before a cycle has actually begun. To those of you that are aware of Michael Bosworth's Solution Selling and Seth Godin's Permission Marketing, this should all sound very familiar.

What is the Role of Marketing in Solution Selling?

The Solution Selling approach advocates farming rather than hunting. Hunting might work when large herds of buyers keep running in front of you, like we had in the high-tech boom days. But hunting is very difficult and extremely unpredictable when buyers are scarce.

The approach we propose may take longer to develop, but it is the only way that guarantees results, if you stick to it.

1. Find a Real Problem

All too often I see dismal sales and lead generation results blamed on insufficient budgets or lack of marketing pizzazz, when the real reason is lack of a compelling offer to begin with. Since all buyers have limited budgets and time, only the very few top priority problems get addressed at any given time. I frequently hear the statement "our biggest competition is no decision". That's a clear sign that you haven't made it to the top of your buyers' priority list, which is usually an indication that they don't feel enough pain related to your solution.

The problem you solve doesn't have to be painful to a lot of people, but it has to be painful enough to some people to make it to the top of their priority list. Narrowing down your target market will usually help finding such a problem. Geoffrey Moore offers a simple methodology for identifying such "must have" problems through use case scenarios in Crossing the Chasm. It is a good exercise to examine how painful the problem you solve really is.

Once you find a problem, talk about it. Don't rush to the solution. Then get your customers to talk about it. While you may solve a real problem, your target audience may still not be aware of the extent of its implications. They are also influenced by peer pressure when it comes to prioritizing the problems.

2. Know Your Target Market (by name, including all decision makers)

This theme is so fundamental that I find myself going back to it in ever discussion about successful B2B marketing. There is no point in talking about your solution to someone who doesn't suffer from the problem you can solve. Your marketing efforts should target only the companies that could feel this pain, whether they are aware of it yet or not.

Targeting the right people within these companies is just as important. As Bosworth says in Solution Selling, you cannot make a sale until a decision maker has recognized the problem and the solution. As you build your target market database, use your initial contact within a company to reach additional contacts at relevant power positions.

3. Develop Credibility and Gain Increasing Levels of Permission

Another reason for the "no decision" syndrome is that buyers don't see your solution as viable. It may be deemed too expensive or technologically immature. Your marketing dialogues should aim to gain increasing level of permission to study the specific nuances of their problem and demonstrate the viability of your solution.

Too many lead generation efforts focus on the question "are you ready to buy?" In Permission Marketing, Seth Godin compares marketing to dating. This would be like trying to get a first date by popping the "will you marry me?" question. Developing confidence and trust with your buyers takes time and requires multiple proof points.

Bosworth emphasizes the importance of the reference story to develop credibility and get the buyer's attention. Marketing has a primary role in identifying these stories, articulating them, and planting them in multiple points of interaction with potential buyers, such as your website, webinars, and other direct marketing efforts.

As you can see, Solution Selling and Permission Marketing offer a very similar approach to enterprise selling and marketing:

  • Looking for people who are "ready to buy" is a fallacy: all potential buyers are qualified leads.
  • Engage with them early and develop trust and ongoing dialogue.
  • The role of marketing is to gain increasing levels of permission to help the buyer learn more, first about the problem and then about your solution.
Can your marketing and sales organizations agree on such common approach? When should sales get involved with a buyer?

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