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Leads, Bad Leads, and More Bad Leads

There are two types of leads in business: Leads that result in new closed business, and bad leads that do not. Bad leads cost businesses in the US over $115 billion dollars in 2023. Read that again. That’s a lot of money. Most companies are following an ineffective “lead generation strategy.” Looking for leads results in Are you tired of chasing bad leads?

Bad Leads are either fake or non-productive leads that will not result in a sale. There are different ways you might end up with a bad lead. It might have been a competitor clicking on your ad or completing your form (yes, they do this – and more often than you may realize). It may have just been someone price-shopping you for a comparison to their already chosen provider. Regardless of what generates them, bad leads waste time and money. And that drives up the actual cost of a Lead Generation focused “strategy.”

Bad Leads happen most often when a company relies on the partners providing “lead generation solutions.” Typically the “solution” is a single tactic, or could be a few related tactics, based on your available marketing budget. The promise of leads sounds very promising to business leaders who are all trying to increase revenue. The “solution,” however, may distract business leaders from other things that will drive closed business. When they don’t produce sufficient leads or enough closed sales, the business leader is usually told they need to increase their budget if they complain about the results.

There are two points I want to emphasize for business leaders:

  1. Tactics are not a “marketing strategy,” and
  2. “Generating more leads” is never the actual goal.

Tactics are actions you take with an objective in mind. Lead generation has the objective of bringing in more leads. But “more leads” is not the true goal. The goal is to increase sales or revenue. Strategies have goals that move the needle for your business. Tactics are never a “strategy.” Tactics are designed to achieve smaller steps that have more concrete outcomes, usually in a shorter time frame. A strategy defines your long-term goals and outlines the steps (or tactics) you plan to take to achieve those  goals.

When you set out to generate leads, you get leads. Not good leads; just leads. And some of those will never result in new business, so they are bad leads. Bad leads cost your sales team time and money for follow up. In 2023, these were estimated to have cost the average company 550 hours of sales team time and $32,000 per sales representative. That’s a lot of wasted resources. No amount of any type of lead helps you improve the closed business rate if your “strategy” is to generate leads.

Marketing agencies can be a very important partner to your business. They are an affordable alternative to bringing marketing in-house, but that they do not create marketing strategy. As for results, agencies optimize campaigns and ads, but that’s not the same as optimizing your ROI or revenue growth. action (tactics) without a strategy is a recipe for generating bad leads.

You need to develop a Marketing Strategy before you bring in any agency. If you do not have the skills to create that strategy, hire a Marketing Consultant or Fractional Chief Marketing Officer who has experience working in the C-Suite. Implementing marketing tactics without a fully developed strategy is a recipe for generating more bad leads.

So how do you grow your company if you take the focus away from generating leads?

  1. Create a budget for marketing, and measure your results and ROI.
  2. Start with a comprehensive marketing strategy that includes revenue goals, KPIs, and OKRs.
  3. Design a Marketing Plan for implementing the strategy and measuring the results.
  4. Consider using technology that helps you maximize results and minimize cost.
  5. Make sure every campaign has specific outcomes that will move you towards your goals.

These are all tasks you should not be delegating to a marketing agency partner. In some cases the agency cannot accurately measure the results in the way you need them to. ROI is one example of this. They don’t have your financial data or other information that needs to be factored into your ROI calculation.

 “More leads” is never the reason you’re not growing. It’s a symptom of something else that is shutting down leads. Marketing strategy – including an attribution model – is crucial, but it can be even more difficult. In the end, accurate measurement of marketing results is very important if you’re trying to grow your revenue and income.

Do you think more leads is really the solution to your growth issue? Set up a complimentary consultation and challenge us to show you why we know it’s not.