A case study in the SellingBrew Playbook — The Ugly Truth About Lead Generation ROI — generated some interesting follow-up questions about the various factors that can contribute to the success—or failure—of lead generation programs.
While it would require giant mind map to illustrate every possible factor, here are three ingredients that a lot of companies miss:
- The sales team’s ability to convert a lead into a sale.
When your conversion rates are low, you have to generate a lot more leads to produce the revenue and profit you need. And, as the “return” in “return on investment” comes from the sales that are being generated, low sales conversion rates can make your lead generation programs appear to be unprofitable. As the case study highlights, it’s all-too-easy to mistake sales process problems for lead generation problems.
- The profitability of the deals that are being closed.
Here again, the returns on your lead generation investments come from the profits that are generated on the resulting sales. The more profit your sales team is able to capture, the better your lead-gen returns. On the other hand, when the sales team discounts heavily or offers prices that aren’t where they really should be, lead-gen ROI will suffer.
- The follow-on sales that are being generated.
In B2B, lead generation is usually about acquiring customers who can buy again and again over time. The better your company is at generating follow-on sales from the customers it acquires, the better your returns on lead generation will be. This is why companies with solid customer development and expansion processes can invest so much more in lead generation and customer acquisition—effectively blocking competitors with lower customer lifetime values in the broader marketplace.
Again, these are just a few of the factors that aren’t generally thought of as contributing to profitable lead generation—there are many more.
Successful lead generation is a recipe where a number of different ingredients must come together in the right way. And it’s important to recognize that many of the most powerful ingredients have nothing to do with the lead generation activity itself.
