B2B is a quirky sector. We have lots of acronyms (obviously beginning with Business-to-business) and weird definitions that are confusing for anyone who hasn't lived and breathed in this space for years.
Revenue operations (hopefully) sits in the middle of several go-to-market teams, and each of them has its own motivations driving incendiary questions like:
When it comes to configuration and data definitions, we understand that "it depends" is the most loathed answer from revenue operations experts. We'll provide a few best-practice definitions for leads and explain which scenarios are the most likely to cause complications.
Leads are among the most significant sources of contention between marketing and sales.
Further complicating the topic is the Lead object in Salesforce/Dynamics/Zoho CRM. According to these CRMs, a Lead is an odd object that combines Company and Person. CRMs created this monstrosity of an object to simplify integrations and form fills. The Lead object allows people to fill out contact or registration forms and provide minimal information without causing the system to reject the data due to missing critical information (like "Which account does this belong to?").
This article will focus on what marketing and sales teams mean when they ask, "How do we define a lead?" which is shorthand for "How do we define a qualified lead that sales should follow up on?" In other words, HubSpot admins should get some value out of reading this piece, too.
Any consultant worth their hourly rate will tell you, "It depends," when asked how to define a lead. And they're right. How lax or restrictive a company is with its definition of a "qualified lead" depends on its growth stage and addressable market.
The most general definition of a "lead" (in sales and marketing speak) should be:
A person who has raised their hand (i.e., performed enough proactive interactions with our brand) to warrant outreach from a sales representative.
Now let's define "proactive interaction" or "hand raise":
Any signal a person performs that indicates they are "in market" for a solution. This activity is typically a form fill, chat engagement, event attendance, or other meaningful touchpoint with your brand. It may also be a very narrow set of intent signals tied to bottom-of-the-funnel research for a solution or similar solution to what you sell.
And finally, let's define "lead source" as:
The last campaign type or category of marketing touch types (i.e., Webinar, Event, Tradeshow, Form Fill, etc.) the person engaged with that triggered the company to flag the person for sales to follow up with.
Note that I didn't use the CRM construct of "Lead." That's because 90% of B2B sales are not linear, and the person may exist in your database as either a Contact or a Lead (unless you have HubSpot – then you don't have to worry about fractured records). This is your cue to create a recycling function that allows people to jump in and out of engagement with sales if you haven't already.
Now let's look at where we should set the bar by development stage and then call out a few common gotchas.
In seed or early-stage startups, sales will want to see just about anyone who has proactively interacted with the brand. The bar is very low to qualify as a "lead" because there is so little market awareness. Chances are high that any inbound lead will be easy to source because there's so little word of mouth driving random buyers to your sales team.
Because of the need for more market awareness, the sales and marketing teams perform many of the same awareness-building activities. Sales has to educate anyone searching for a similar solution about your brand and how you solve the problem. Your marketing team looks for ways to educate potential buyers en masse, whether they're in market now or not.
If your company understands its ideal customer profile (ICP) – and that's questionable with a tiny pool of customers unless you have an extremely niche offering – it probably isn't ready to start gating its lead pool. The rule of thumb is to pass everyone who shows interest over to sales. The only exception is usually third-party syndication, but that depends on your conversion rates by lead source.
Later on in your journey, it's beneficial to categorize these leads as Hot to Cold. I highly recommend using your conversion rate by lead source to determine how your leads should be categorized rather than ICP fit – unless you have a niche product.
For this article, "Growth Stage" consists of B-to-C series venture-backed startups or smaller, less mature privately held or private equity-backed companies. These companies have fewer feature gaps holding sales back and are starting to see more brand recognition in the market.
A typical SaaS company will try to sell into several use cases and industries. This complicates the definition of your ICP. However, your sales team should consistently see success when they sell to a subset of accounts. Use that information and compare it to churn rate profiles to narrow your ICP.
Growth Stage companies benefit from a combination of engagement thresholds and ICP gating. By now, you should know your UCP or Unacceptable Customer Profile. These people shouldn't be sold to because they won't get enough value from your product – and should never be passed to sales.
Some people go nuts with engagement scoring. I'm not a fan of making anything too complicated for a salesperson to understand. Consider gating the bottom-performing lead sources instead of using a point system and threshold to pass over contacts. As they continue to learn about the brand, they will either come through as a more valuable lead or qualify themselves out.
In companies with a mature product, your sales team should realize the benefit of more brand awareness, and your total addressable market should be locked in. This means your teams know (and accept – usually the most challenging hurdle to overcome) who benefits the most from your product and who it doesn't work for.
Your marketing team should also use omnichannel campaigns and have several lead sources for you to sift through.
In this stage of your maturity, I encourage you to consider gating all but the highest converting lead sources and working with marketing to create nurture programs for everyone else. This strategy may change depending on whether inside sales representatives are used and willing to churn through lower-converting sources. You'll also want to gate any leads that aren't within your ICP. You may even consider nurturing anyone who falls into the "acceptable customer profile" or people who will buy but may churn due to lower value gains with your product unless they come through chat asking for a salesperson.
Again, I recommend fighting the temptation to go nuts with engagement scoring algorithms and intent calculations. It's best to keep definitions easy to understand so you can forward a definition document and not get many follow-up questions, meetings, and open debates.
Honestly, the most common complications I see are integration failures or a lack of testing to ensure the lead sources are routing properly to the sales team. Outside of system issues or poor QA, complications can arise from the complexity of your go-to-market strategy.
Niche products will force admins to add complex logic to their lead gating early. If a product is valuable to a narrow target audience, flooding the sales team with leads doesn't make sense.
I also can't stress how important it is to analyze conversion rates by lead source. Sometimes, salespeople will be buried in the wrong kind of leads (low converting) or refuse to follow up on a high converting source because of a past bad experience. The more transparent you can be with what works (and what doesn't), the more your sales team will trust your lead definition.
Finally, question the motivation behind go-to-market peers pushing for a specific definition. Unfortunately, it's not unheard of for a desperate marketer to demand that lead gating be relaxed if they have a high lead volume quota and an executive team that doesn't understand the benefit of increasing conversion rates at the risk of decreasing lead volume. A little bit of education can go a long way in correcting this mentality.
AI has improved in leaps and bounds over the last few years. However, AI needs a significant amount of data to train against, and typically, that data should be Closed Won opportunities. Push any vendor that uses machine learning or AI to share the minimum viable data set or number of records needed. If they don't know, be suspicious. And if you're an early-stage company, it's probably not a great fit. At a minimum, allow end users to provide feedback.
When it comes to intent, some sources are more valuable than others. It can be tough to understand which signals are relevant if you have a broad array of signals. The tool becomes more useful if you have an analyst with the chops necessary to narrow down your signals and a sizable customer pool against which to train the data. Providers like G2 offer very narrow terms and categories that make them very useful immediately.
Lead routing is an entirely different bag of worms and highly depends on how complex your organization makes territory design or account hierarchies. But that's another article for a different day.
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