• March 17, 2011
  • By Koa Beck, Editorial Assistant, CRM magazine

Required Reading: Taking the Lead

Article Featured Image

Dan McDade founded PointClear, a prospect development company, in 1997 to assist business-to-business companies with complex sales processes. As CEO and president, McDade has written a 100-page book titled The Truth About Leads, highlighting the spaces in which B2B lead-generation techniques are failing and why. McDade spoke to editorial assistant Koa Beck to explain the complex process of lead generation, the difference between a “farmer” and a “hunter” when it comes to salespeople, and why marketing departments are frequently underfunded and underappreciated.

CRM: You open The Truth About Leads by writing that defining, generating, and tracking leads is a lot more difficult than people think. In what ways is it a trying process?

McDade: Most companies don’t do a good job defining a lead. If you went to 10 salespeople and 10 marketing people, even within a single company, you’d get 20 definitions of a lead. If marketing is generating leads with one definition and sales is considering a lead as something different, you don’t have a fit.

Also, the perception is that you do marketing and you generate leads. That’s kind of one-dimensional, as opposed to the way it really should be, which is a multitouch, multimedia, multicycle process. Lead generation really requires more time and effort with more touches. That’s more than what most companies allow, and that’s another reason that it’s difficult.

CRM: In Chapter 2, you write that “marketing has been rendered powerless in many companies” primarily because the department is saddled with generating a massive number of leads with very little money. Why do so many companies operate this way?

McDade: It’s primarily because there historically has been—and I think there still is today—a serious inability to measure marketing results. You have marketing throwing leads over the fence to sales, and sales is not catching them. They put them into today’s equivalent of the lower-lefthand drawer, which is probably the “delete” button, and the effectiveness of follow-up on the leads is pretty poor. Sales has gotten poor-quality leads mixed in with high-quality leads, but they’re indistinguishable and, as a result, sales doesn’t follow up on them. Sales has said they need more and better leads without the ability to measure marketing. The company says, “Well last year you generated X number of leads; this year we want X plus 20 percent, and oh, by the way, you have to keep the lead cost down to X dollars.”

CRM: In Chapter 3, you advocate generating fewer leads, but also point out that sales reps should not be searching for them. How are those two problems related?

McDade: A lot of salespeople are going to be working on deals, and deals are time-consuming. Steve (the hypothetical sales rep in The Truth About Leads) is going to make decisions based on a number of things, and one of those things is how much time he has that month to do anything. If you give too many leads to Steve, and too many of those leads are not qualified, then most of those leads are simply going to be wasted. The two problems are related based on the win-win situation where your sales reps have just enough leads to keep them busy and not too many leads that they get wasted.

CRM: Although you encourage readers to chase fewer leads, you advocate pursuing fewer leads longer. What do you mean by that?

McDade: Really there are three kinds of salespeople. There are beaters, hunters, and farmers. The beaters beat the bushes and make the birds fly, the hunters go in for the kill, and the farmers collect the birds and the harvest as they go.

Let’s say you have a salesperson; you come back from a trade show and dump 100 leads that came out of that show on him. Historically speaking, about five out of 100 will really be worth a salesperson’s time. You want to have something that sits between marketing and sales so that several things happen: The five out of 100 that are ready to go right now get out to the salesperson; the other five or 10 that are longer-term opportunities that need to be nurtured before they go to sales are segregated out; the ones that are not qualified are tossed out; and some go into some kind of automated nurturing campaign. Unless all of that work gets done in between marketing and sales, there is a lot of waste.

CRM: Toward the end of the book,  you assert that salespeople don’t understand marketing people and vice versa. What accounts for this fundamental disconnect in most companies?

McDade: Salespeople tend to be “people” people and marketing people tend to be process-oriented people. Salespeople frequently will use your first name when they’re talking to you—it seems like every two or three sentences, they’re using your first name. Marketing people don’t do that. Salespeople tend to be very one-on-one and very personal and they like that personal interaction. Marketing people tend be looking at what they refer to as “the buyer’s persona” and “digital body language” and things that are a little bit more theoretical than what salespeople look at. I think that is a basic difference in how people think.

Editorial Assistant Koa Beck can be reached at kbeck@destinationCRM.com.

CRM Covers
for qualified subscribers
Subscribe Now Current Issue Past Issues