{"id":4346,"date":"2020-05-06T10:30:22","date_gmt":"2020-05-06T05:00:22","guid":{"rendered":"https:\/\/sketharaman.com\/blog\/?p=4346"},"modified":"2022-03-23T14:11:59","modified_gmt":"2022-03-23T08:41:59","slug":"the-secret-to-success-in-outsourced-b2b-lead-generation","status":"publish","type":"post","link":"https:\/\/sketharaman.com\/blog\/2020\/05\/06\/the-secret-to-success-in-outsourced-b2b-lead-generation\/","title":{"rendered":"The Secret To Success In Outsourced B2B Lead Generation"},"content":{"rendered":"<p>Any business endeavor has many drivers of success. Leadgen is no exception.<\/p>\n<p>But, unlike other pursuits, outsourced B2B lead generation has one driver that has an outsized influence on its success: <strong><em>Definition of Lead<\/em><\/strong>.<\/p>\n<p>If you get this right, half your success is assured. On the other hand, if you leave it to your outsourced vendor, failure is almost guaranteed.<\/p>\n<p>That\u2019s because lead means different things to different companies &#8211; even to different people within the same company. This leads to massive ambiguity in the nature and cost of the deliverable, which is a sureshot recipe for disaster in any outsourcing engagement.<\/p>\n<p>Over the years, we have come across a wide array of definitions of lead from IT product and services companies. Let me list the three most common definitions below:<\/p>\n<ul>\n<li><strong>L1:<\/strong> Lead is the name and email of somebody in the prospect company who may or may not have heard of you, the Seller.<\/li>\n<li><strong>L2:<\/strong> Lead is someone in the prospect company who has heard of you and has expressed an interest in knowing more about what you offer.<\/li>\n<li><strong>L3:<\/strong> Lead is someone in the prospect company who will place the order on you tomorrow.<\/li>\n<\/ul>\n<p>Nothing right, nothing wrong. It&#8217;s a free world, you can want whatever you want. But all leads are not equal. You need to appreciate that, depending on how a Lead is defined, its price and delivery period can vary by as much as 1:100. Yes, I repeat, 100X.<\/p>\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">Different companies have different expectations of a Lead. Which is fine as long as they understand that price &amp; delivery period for a lead can vary from 1X to 100X depending on how Lead is defined.<a href=\"https:\/\/t.co\/it2vBfyqfh\">https:\/\/t.co\/it2vBfyqfh<\/a> . <a href=\"https:\/\/twitter.com\/hashtag\/LeadGen?src=hash&amp;ref_src=twsrc%5Etfw\">#LeadGen<\/a><\/p>\n<p>&mdash; Ketharaman Swaminathan (@s_ketharaman) <a href=\"https:\/\/twitter.com\/s_ketharaman\/status\/1264941931072798721?ref_src=twsrc%5Etfw\">May 25, 2020<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>To understand why there&#8217;s such a drastic variance in price and delivery period of a lead, consider the following standard purchase funnel and sales funnel.<\/p>\n<figure id=\"attachment_6821\" aria-describedby=\"caption-attachment-6821\" style=\"width: 500px\" class=\"wp-caption alignnone\"><a href=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2020\/04\/sales-funnel-02-f.jpg\" target=\"_blank\" rel=\"noopener noreferrer\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-6821\" src=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2020\/04\/sales-funnel-02-f.jpg\" alt=\"\" width=\"500\" height=\"402\" \/><\/a><figcaption id=\"caption-attachment-6821\" class=\"wp-caption-text\">PURCHASE FUNNEL<\/figcaption><\/figure>\n<p>&nbsp;<\/p>\n<figure id=\"attachment_9375\" aria-describedby=\"caption-attachment-9375\" style=\"width: 500px\" class=\"wp-caption alignnone\"><a href=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2020\/05\/sales-funnel-12a.jpg\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-9375\" src=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2020\/05\/sales-funnel-12a.jpg\" alt=\"\" width=\"500\" height=\"513\" \/><\/a><figcaption id=\"caption-attachment-9375\" class=\"wp-caption-text\">SALES FUNNEL<\/figcaption><\/figure>\n<p>Now, let&#8217;s map the three types of leads to the combined funnel.<\/p>\n<p><a href=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2020\/05\/sales-funnel-purchase-funnel-2.jpg\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-9374 size-full\" src=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2020\/05\/sales-funnel-purchase-funnel-2.jpg\" alt=\"\" width=\"630\" height=\"325\" \/><\/a><\/p>\n<p>As we can see:<\/p>\n<ul>\n<li>Lead L1 lies at the top of the funnel (TOFU) and maps to <em>Lead<\/em><\/li>\n<li>Lead L2 lies at the middle of the funnel (MOFU) and maps to <em>Sales Qualified Lead<\/em> (SQL)<\/li>\n<li>Lead L3 lies at the bottom of the funnel (BOFU) and maps to <em>Deal<\/em>.<\/li>\n<\/ul>\n<p>In a typical sales process, cases drop off the funnel as you traverse from top to bottom e.g. purchase shelved, order lost, etc. Therefore, not every TOFU case becomes a MOFU case; and not every MOFU case becomes a BOFU case.<\/p>\n<p>Typical conversion rates in B2B technology product and services business are as follows:<\/p>\n<ul>\n<li>TOFU to MOFU: 20,000 Leads yield 1,000 SQLs ~ 5% ~ 20 Leads \/ SQL<\/li>\n<li>MOFU to BOFU: 1,000 SQLs yield 100 Deals ~ 10% ~ 10 SQLs \/ Deal<\/li>\n<li>Ergo TOFU to BOFU: 20,000 Leads yield 100 Deals ~ 0.5% ~ 200 Leads \/ Deal<\/li>\n<\/ul>\n<p>This is illustrated in the following exhibit.<\/p>\n<p><a href=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2020\/05\/sales-funnel-metrics-14.jpg\" target=\"_blank\" rel=\"noopener noreferrer\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-7891\" src=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2020\/05\/sales-funnel-metrics-14.jpg\" alt=\"\" width=\"500\" height=\"357\" \/><\/a><\/p>\n<p>As we can see, conversions vary from one funnel stage to another. Ergo, the cost of a lead will vary depending on the funnel stage at which it is located i.e. definition of lead.<\/p>\n<p>To take an analogy, a gold mining company will need a ton of ore to mine a nugget of gold. Therefore, a kilogram of gold will obviously cost far more than a kilogram of ore.<\/p>\n<p>Now, the typical cost of an L1 lead on Jigsaw \/ Data.com, Hoovers, and other B2B Contact Databases is around $2.5. By applying the above funnel metrics, we can derive the following costs:<\/p>\n<ul>\n<li>(L1 = $2.5)<\/li>\n<li>L2: $50<\/li>\n<li>L3: $500.<\/li>\n<\/ul>\n<hr style=\"width: 70%;\" \/>\n<p>What is perceived as a single deliverable (&#8220;lead&#8221;) can cost anywhere from $2.5 to $50 to $500.<\/p>\n<p>Any businessperson would spot a huge red flag whenever there&#8217;s such a wide variance in the cost of a key deliverable in an outsourced engagement. To derisk that, it&#8217;s necessary to spec the deliverable correctly. That means, all parties must agree on the exact definition of lead before an outsourced B2B lead generation engagement is kicked off.<\/p>\n<p>The default tendency of many business owners is to leave it to the leadgen service provider to define lead. In practice, most of these outsourced leadgen movies have a bad ending.<\/p>\n<p>We strongly advocate that business owners must own lead definition. To help them in that pursuit, we&#8217;re happy to publish the following exhibit in which we have provided the defining characteristics of different stages of the sales funnel.<\/p>\n<p><a href=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2020\/05\/sales-funnel-definition-15.jpg\" target=\"_blank\" rel=\"noopener noreferrer\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-7895\" src=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2020\/05\/sales-funnel-definition-15.jpg\" alt=\"\" width=\"500\" height=\"361\" \/><\/a><\/p>\n<p>Business owners can pick the definition of lead that suits their needs best.<\/p>\n<p><em>Quora Link:<\/em>\u00a0https:\/\/qr.ae\/pNrIIm<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Any business endeavor has many drivers of success. Leadgen is no exception. But, unlike other pursuits, outsourced B2B lead generation has one driver that has an outsized influence on its&hellip;<\/p>\n","protected":false},"author":1,"featured_media":4346,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5,1],"tags":[],"class_list":["post-4346","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-b1-integrated-marketing","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/sketharaman.com\/blog\/wp-json\/wp\/v2\/posts\/4346","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sketharaman.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sketharaman.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sketharaman.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/sketharaman.com\/blog\/wp-json\/wp\/v2\/comments?post=4346"}],"version-history":[{"count":1,"href":"https:\/\/sketharaman.com\/blog\/wp-json\/wp\/v2\/posts\/4346\/revisions"}],"predecessor-version":[{"id":6626,"href":"https:\/\/sketharaman.com\/blog\/wp-json\/wp\/v2\/posts\/4346\/revisions\/6626"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sketharaman.com\/blog\/wp-json\/wp\/v2\/posts\/4346"}],"wp:attachment":[{"href":"https:\/\/sketharaman.com\/blog\/wp-json\/wp\/v2\/media?parent=4346"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sketharaman.com\/blog\/wp-json\/wp\/v2\/categories?post=4346"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sketharaman.com\/blog\/wp-json\/wp\/v2\/tags?post=4346"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}