Why lead inflation is bad for sales and marketing

‘The leads are weak? You are weak!’ In the film Glengarry Glen Ross, Alec Baldwin unleashes a rant against some salesmen and refers to the sales ABC: Always Be Closing. A salesperson is worthless and does not deserve a cup of coffee if he cannot turn a lead into a deal, according to Baldwin’s character. But what exactly is the definition of lead? I am aware that opinions on the matter differ widely. In fact, you can even speak of lead inflation – a development that does not make the work of sales and marketing any easier.

For me, a lead is a person who has taken the decision to find a solution to the problem that s/he or the organization has. That person goes through different phases to that end. The search for a solution begins with research into possible products or services. In this phase, it is already clear what the budget for a solution is, who is involved in the selection, and what timeframe has to be set. A short list is drawn up on the basis of the research. Further research is then conducted into those suppliers and interest is clearly shown in various ways, e.g. by downloading a white paper or requesting a demo. It is then time to get acquainted with those persons, an offer is made and a decision is taken. Simply put, this is the buyer journey that a customer goes through.

Addressable market

But in which phase you really speak of a lead? Can a person be labelled as a lead already if he visits your website — perhaps even before he experiences a problem, in fact? Or is someone a lead when he accepts a LinkedIn invitation? Or can you speak of a lead already if a clear action has taken place where concrete interest is shown, such as the aforementioned white paper or demo? If you consider the first two examples, you can call practically everything and everyone a lead. This actually occurs in practice on a regular basis. In such a case, every employee of organizations that are found in your addressable market and with whom you communicate indirectly, is a lead. If this is the case, prospect has become practically synonymous with a lead.

As far as I am concerned, this is an undesirable situation which leads to lead inflation. If everything is a lead, the costs of a lead are also relatively low. This gives the impression that finding the right leads, including insight into the timeline, budget and the DMU, does not require time and effort. Sales and marketing professionals, however, know that the opposite is true. Labelling everyone as a lead makes it extremely difficult to launch targeted campaigns that achieve sufficient conversions, and sales becomes more of shooting at random than sharpshooting. And before you know it, sales says that the leads that the marketing provides are weak…

Identifying a lead correctly therefore constitutes the basis for being able to take the right actions. What is a real lead in your organization? Dare to be honest and look beyond the targets set in your marketing sheet also, because you want a real picture of the leads with the potential to grow into a deal. You can then take a subsequent step and try to gain insight into where a (potential) client is in the buying cycle. On the basis of that insight, you can offer relevant content or make contact in another way and gear the further process effectively towards conversion.

This will increase the chances of success – which is also rather important, because as Baldwin’s character says: coffee is for closers only!

Michiel Alkemade
Founder and manager of Computer Profile