Blog post

Revenue Still Matters More than Leads

By Todd Berkowitz | June 17, 2015 | 0 Comments

Marketing MetricsDemand and Lead GenerationData and Analytics Strategies

As an analyst I wear many hats- sounding board, guru, therapist, visionary, bad cop and voice of reason to name a few. But at the core, my raison d’etre is to help Gartner technology provider clients be more effective in the way they market and sell. In this vein, clients come to me looking for workable solutions to specific problems or challenges. While there are often (relatively) easy answers, sometimes the solution requires looking at the problem through an entirely different lens and rethinking long-held assumptions.

Lead generation is one of those areas. While I occasionally have clients who schedule an inquiry who just want to hear about the latest best practices or validate what they are doing, it’s more common that someone comes in and says the number one priority for marketing is to increase the number of marketing-qualified leads (or MQLs for short.)  When I ask why, I’m usually told that marketing needs to prove it’s value by generating more leads at the top of the funnel, so marketing can meet an MQL and pipeline goal. As for the rest of the funnel, clients will say it is far less important.

This is where I often have to re-orient the conversation. I have to do that for several reasons:

  1. While lead generation is an important part of marketing’s job, it’s not the only part.
  2. In a normal market, more MQLs won’t lead to static conversion rates, which means we have a math problem.
  3. If marketing meets it’s MQL goal, but the company misses it’s revenue target, marketing won’t get a pat on the back.
  4. The changing buying cycle and the increasing consumption of content makes “two-dimensional” lead scoring less reliable

Yes, there are some tactical ways to generate more MQLs and more revenue. Better use of technology and data (including predictive analytics) can improve both efficiency and effectiveness. You can generate MQLs by marketing to existing customers  as long as you demonstrate value from they already have purchased. And paying attention to metrics (including MQLs, cost per lead, conversion rates and ROMI) are critical to being an effective marketer.

Tech provider marketing leaders should really be thinking about how to engage in activities, create content and enable salespeople and partners to build trust, provide value and meet the ever-changing buyer expectations. If you do this successfully, more opportunities will emerge and more deals will ultimately close. Sales and marketing alignment is also likely to improve because they two organizations will be working much more closely. If and when that happens, marketing will get both a pat on the back and the credit for playing its part.

If you are a Gartner client, you might want to read newly updated versions of two notes: “Tech Go-to-Market The Marketing-Qualified Lead Trap and What Marketers Should Measure” and “Tech Go-to-Market: Technology Marketers Need to Create Revenue, Not Just Leads.” When I first wrote these notes eighteen months ago, only a small portion of the clients I spoke with had adopted this approach. The heartening news is that in the last eighteen months, it’s become far more common as provider marketing leaders encountered issues with MQL conversions. Still not a majority (as evidenced by my comments above), but definitely an encouraging sign.

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