The Life of a Lead

Nobody will ever write the biography of a Lead.  Leads are people we never know that much about -- because as soon as we do know enough about Leads, they will be promoted to Contacts.  And that process of conversion is complex and mysterious -- you wouldn't call Lead conversion a religious experience, but most SFA users still don't understand its ramifications.  Welcome to this month's excerpt from my upcoming Addison-Wesley book on Salesforce.com best practices.

Today's excerpt covers the life of a lead from cradle to grave.  I'm hoping that you'll find areas in this one that I'm dead wrong about!  Please email me with feedback where you think I'm full of it.  Through vigorous debate, the ideas will get even stronger.  The best argument of the month wins a prize.
 

What's in a Name

There's a reasonable amount of confused semantics in the lead processing world.  Before we can have a clear discussion about the Lead lifecycle, we've got to agree on nomenclature.  Here are the standards we use, and I hope you can adopt them at least for now.

• A Name is the identity of someone in our target audience.  You can buy names on a list (e.g., all doctors in north America or attendees at a tradeshow), but they are of very little value because they neither know nor care about your company and its products or services.  A Name is, at best, a receptive ear.  But the probability of Names being actively interested is so low that you should communicate with Names only via bulk internet media.  I am not saying spam people -- develop a sequence of interesting, relevant material to send in a low-key "drip marketing" campaign.
• A Lead is someone who has specifically expressed interest in your company's product or service, typically by attending an event or registering on your website.  We know a little bit more about Leads than we do about Names, but typically the only thing we know for certain is a valid email address from the time of registration.  If the Lead has come back to your website or taken some other follow-up activity, all the details should be recorded in your SFA system so you can do some behavioral targeting and lead scoring.  We urge everyone to be using Campaigns to cover any possible activity or response that a Lead could be involved with.
• A Qualified Lead is someone who could reasonably participate in a sales cycle, and we know this because somebody in our company has had a highly directed conversation with them about their level of interest, requirements fit, budget, and timeline.  Typically, a Qualified Lead should be converted to a Contact in a matter of hours, thanks to a follow up call by Sales.  If the sales conversation doesn't go well, the Qualified Lead should be disqualified as bogus.
• A Rejected Lead is a lead that has been rejected by sales as being unqualified, or a contact that has been identified as uninterested or incompetent to participate in a sales cycle.  Rejected Leads should still be given the best treatment by Marketing, but they will be ignored by Sales until they have done something new to prove their worthiness of proper attention.
• Contacts come in two flavors:  a qualified lead that has been converted in order to initiate a sales cycle, OR a person who works for a company that is already in a sales cycle.  Unfortunately, for zealous supporters of the named account model of selling, this dual definition gets very blurry.  For the sake of clarity, let's ignore the needs of named account zealots, as they don't deal in Names and Leads the same way we plebian types do.
• Customers are Contacts who work for a company that has a contractual relationship with us, and who have paid us $1 or more. 
• References are Customers who are foolhardy enough to have their name bandied about in the press.  Often, this has as much to do with their status in the job market as it does with their satisfaction with our company's product.  Some references aren't willing to be seen in public, but are willing to do private, one-one reference calls.  Reference status and usage must be carefully tracked to prevent their being over-used by Sales and Marketing people alike.
   

Who Lives Where

At first blush, you'd expect the SFA database to hold everything having to do with prospects and customers -- names, leads, contacts, customers, and references.  But things aren't that simple in sophisticated organizations.  In larger operations, it makes sense to use a split-brain approach that separates the marketing database from the sales database.  There are two reasons organizations do this:  they have a large number of low-quality Leads (really, they’re little more than Names) that aren’t relevant to the sales folks, and they use a marketing automation tool (service, really) that needs to operate from its own copy of the data.

What’s involved with the split-brain?  The marketing pool of Names is stored in a separate database, and the transaction history of campaigns and responses is managed there.  When a Name starts behaving more like a Lead (as reflected in its internal lead score), it is promoted from the marketing pool to the sales Lead area.  Its record is deactivated in the marketing Names database and entered into SFDC as a hot Lead. 

Leads also migrate the other direction.  When a Lead has been unresponsive, hasn’t been active recently, has been demoted by Sales (by explicitly disqualifying them), or has simply been ignored by Sales for too long, the Lead it is deactivated in SFDC and re-activated in the marketing Names database.  Neither Names nor Leads should ever be deleted from their databases (to prevent dupes and to maintain history), but the inactive records should carry flags marking them as such.

By keeping these databases separate, the metrics and operations of marketing can be tuned more finely without interfering with the natural way that sales works with Leads.  However, there is a side effect of the split-brain model:  Sales will not be able to easily see all the activity from a Big Account, because some of it will be done by Leads and some by Names.

If you’re already using a marketing tool like Eloqua, Vertical Response, or Exact Target, you’re probably on the split-brain path. 

If you aren’t using tools like these, you do have a choice to make:  do you need to have all your Leads – regardless of quality – in one place, or do you want to create a category of Leads that are so low quality that they’re handled outside of your SFA system?  While there’s no overwhelming cost advantage in going either direction, the split-brain approach allows for more sophisticated marketing operations.

Unfortunately, changing the path you take after system deployment will involve considerable one-time costs and changes to the workflows surrounding Leads.
 

Lead Cultivation Workflows

Most of the early cultivation of Leads is focused on increasing their level of interest, to the point where they really qualify to be Leads.  The workflows for Names and demoted Leads should be nearly 100% automated, using clever combinations of email blasts, web site materials, and recorded webinars.  Make sure the content is relevant to the audience!  If you are doing community-of-interest marketing (3 separate links there), you'll want to monitor individuals' activity levels in the community, as well as their download history on your site.   Your marketing automation system should be managing this for you, and maintaining behavioral scores for each individual. 

Once a Lead is sufficiently warm to require human attention, Marketing should almost never be involved.  As I wrote 3 years ago, Telesales (or Telemarketing, or Inside Sales) should be doing the phone calls, demos, and qualification steps.  In most organizations, the final decision on qualification is made by the sales rep, but the appointment for that call is made by the Telesales team.

If you take the time to systematize your lead cultivation (actually writing it down with a simple flow-chart and scripted steps), it becomes much easier to outsource the process or supplement it with an outside service.  A very common mistake is to have too many sales reps for the number of qualified leads, which means the reps won't be busy enough with high-value work.  It's usually a better business decision to invest more in the Telesales/Telemarketing function (inside staff or outsourced) so that your expensive sales reps have enough high-quality leads to keep them fully occupied.
 

Conversion

Once a Lead is fully qualified, it should be only a matter of moments before it is Converted into a Contact.  Conversion does an amazing array of things in your SFA system, and the user is typically given a few options at conversion time.  On conversion (and we recommend that this is done by the Telesales group for the sake of consistency), best practices are to create an Opportunity (typically, for $0 at 0% probability, unless the Contact is being attached to an Opportunity already in progress) and to attach a Contact Role and a Campaign to it (to support sales and marketing effectiveness analyses).

What if the Contact turns out to be bogus, or falsely qualified?  Never, ever, ever (not ever?  NEVER!) delete the Contact or Opportunity.  Instead, set their status flag as "rejected by sales."  Through clever report design, the Rejected items won't mess up anybody's operational metrics yet they will provide quantitative feedback to the Marketing and Lead Cultivation functions.  Only by providing unambiguous feedback can the Telesales and Marketing people get better at what they do. 

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Chapter Excerpt -- coming in August

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