How Marketing Lead Generation Can Actually Hurt Sales

Focusing on MQLs can take attention away from important KPIs. By shifting the approach, Marketing can have greater impact on revenue generation.

When reading MASS Engines’ case studies, many people spot an unusual figure: our history of reducing Marketing Qualified Leads. In a world where growing lists and Marketing Lead Generation are often the name of the game, this can seem like a strange bragging right. Why would you want to send less leads down your pipeline?

What might seem unusual to some is actually a growing trend, and for good reason. In a recent survey, only 7 percent of sales reps believed that Marketing Lead Generation efforts sent them high-quality leads. The vast majority of sales reps also ranked Marketing as the worst source of leads, despite the high quantities they might see. With limited hours in a day, this trend has prompted many salespeople to spend less time trying to qualify MQLs, often time underselling or even avoiding these prospects. Who can blame them? Salespeople typically depend on commission for their income, so they don’t want to waste their time pitching to those who likely aren’t interested.

It’s time for Marketing to redefine a “lead,” rather than sending all warm bodies to sales. Marketers need to measure their success by sales quality rather than simply quantity. This means taking a closer look at the funnel stage of a prospect, taking the time to understand and nurture a lead prior to passing it along to sales. This approach allows Marketing to have a greater impact on revenue generation, rather than simply generating loosely defined “leads.”

Why the Marketing Lead Generation Model is Sabotaging Your Growth

We’ve all sat through the lead generation pitch before. An agency will introduce their tactics for collecting leads – Google Ads, social media, inbound marketing, whatever it may be. They will then promise to drive a certain number of “leads” through these efforts. From there, it’s up to your sales team to qualify, nurture, and close these leads.

By using this type of pitch, agencies are establishing a system wherein they are measured by “lead” quantity, rather than quality. That’s selling Marketing’s job awfully short.  In a B2B demand-generation focused organization, Marketing’s role should be to contribute to the company’s overarching goals – typically, this means increasing sales and driving revenue. And that requires more than just lead quantity – it also puts lead quality, lead nurture, and demand generation on the table as a critical consideration.

So, what can you do to shift this trend and have a more balanced view of how MQLs fit into your marketing strategy? Here are 3 things we recommend.

1) Sit down with Sales

In many companies, Marketing and Sales are at odds – which is a bit strange, because they rarely ever really talk to each other.

In my experience, the emphasis on MQLs is one of the leading contributors to sales and marketing misalignment. Marketing can present a rosy view of all the contacts they are driving using their own analytics, while sales is left to explain why they close so few of those so-called leads. This results in a back-and-forth of sorts; Marketing says Sales aren’t properly following up on the names they’re sending, while Sales insists that lead quality is the culprit.

Even before attribution reporting comes to fruition, conversations between Sales and Marketing can be an extremely powerful tool. Sales’ feedback can help clarify what types of audiences are more likely to close, what pain points are most critical, and what content is most valuable from a Sales perspective. This conversation will give Marketing an opportunity to adjust their thinking and take revenue results into consideration. You can also discover how best to combine Marketing and Sales metrics for a clearer view of performance.

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2) Look beyond the MQL

It makes perfect sense for Marketing to have its own indicator of a “lead” based on campaign conversion data (known in most organizations as an “MQL”). The problem is that most organizations’ definition of an MQL is far too broad and often not put into context. When an agency or Marketing department reports on MQLs, they typically include every contact that comes through via “forms” or tracking numbers as a lead – a current customer looking for tech support, a person outside of your service zone, someone looking for a product you don’t offer at all. Why should these contacts, often the result of targeting flubs, be used to measure Marketing success?  

Your KPIs should rely more on the number of SQLs that result from Marketing campaigns. Yes, Marketing should still provide its own data on form submissions and contacts made, but it should also clarify the conversion rates of these contacts into Sales Accepted Leads and Sales Qualified leads. This will provide a clearer view of how Marketing is impacting top and bottom lines. By having a conversation about what is truly considered a lead, Sales and Marketing can speak the same language and work towards revenue goals.

3) Implement attribution and influence reporting

Attribution reporting is a powerful framework for measuring Marketing success. It follows leads sourced by demand generation efforts from beginning to end, clarifying which campaigns contribute to the most closed revenue. Influence reporting, an extension of attribution reporting, captures and valuates every marketing touch related to a closed sale.

An attribution reporting framework is the best tool we have seen for understanding Marketing’s contribution to revenue – and implementing it, while challenging initially, is totally attainable.

With attribution data in hand, you will have a better understanding of which campaigns are driving the best leads, and how Marketing’s work is influencing revenue. This will help you push past deceiving figures like “number of contacts” or ill-defined MQLs to focus more on leads that can be closed. Most importantly, it will help clarify which campaigns work best (and which fall short) so you can make better Marketing investments in the future. If you’d like more information on Attribution Reporting, we offer a step-by-step guide for your business.

There’s No Longer a Reason to Let MQLs Run the Conversation

Digital data, attribution reporting and new ideas about sales-marketing alignment have opened the door to important conversations about Marketing’s role in Lead Generation. While MQLs are still useful to track, they simply do not tell us the whole story about Marketing’s contribution to revenue and other big-picture goals. For that reason, using MQLs as the main KPI to gauge Marketing success is a mistake.

More and more, I am being asked by companies to help them to lower MQL rates. This means taking a more targeted and nurture-driven approach, with the ultimate goal of increasing lead quality and closed sales. Reducing MQLs might seem counter-intuitive at first, but in the end it works – focusing more on SAL/SQL data can clarify Marketing’s role, provide Sales with better leads, and can have a positive overall impact on the ever-important bottom line.

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