This is seriously the worst marketing measurement a SaaS company can put in front of a marketer. My typical response, "If all you want is leads I can buy you some leads." If an agency is telling you they can get you 4X leads in 6 months without asking you some very tough questions, don’t hire them - RUN!
I have written about this topic before but it amazes me that I still get asked if I can increase leads. Luckily I know what a company really wants when they ask this. By now smart businesses know a real marketer wants to participate in a serious ROI conversation. A real B2B marketer understands that putting junk in the top of the funnel results in junk across all areas of the business.
A company recently asked me to generate more leads for them but after looking in their CRM I realized they had a large number of leads just sitting there. When I dug further asking why they wanted more of the same with a conversion ratio of less than 10% their response was, well we did not do a good job at following up on those leads. So, their problem wasn’t generating more leads, their problem was converting the leads they already had. Just putting more leads at the top of a broken funnel was going to result in more of the same.
79% of leads never convert into sales due to poor performance, nurturing, and/or engagement. (Source)
If your marketing effort is entirely focused on growing leads 4X without consideration for how you will nurture and convert these leads or how you will keep, maintain and even grow your customer relationships, you will continue to need to grow your leads 4X time and time again just to maintain revenue. Are you leaving the biggest potential source of revenue out of the conversation?
If a typical SaaS business loses 2-3% of their customers each month to churn, they must grow by at least 27%-43% annually to maintain the same revenue. (Source)
I have worked with 3 companies in the last 2 years that did not have a single initiative for customer marketing. In fact, once the customer was onboarded there was little to no proactive communication. If customers are considered a support problem vs. a revenue opportunity and not a big part of your marketing plan, I guarantee you are leaving money on the table.
Loyal customers are worth up to 10x as much as their first purchase, on average. (Source)
So what should you be discussing with you marketing team/agency if it isn’t leads? This depends on what is important to your business right now. In some cases, it may make sense to have a higher CAC (customer acquisition cost) and focus on creating a strong plan to maximize LTV (life-time value), in which case, customer delight and expansion marketing should be at the top of your list. Or, you might be in high growth mode in which case you want to acquire as many customers as you can at the lowest CAC while still maintaining a certain churn rate. So understanding how to reach your ideal customer while still avoiding the noise and costly marketing channels should be your focus. Driving 4X leads should only come into the conversation if you have a solid funnel process that is already hitting all your goal metrics and you are ready to scale this process with more volume.
with contribution from Ryan Andrew
My name is KC DeKorte-Cox and I am a demand generation marketing expert with over 15 years of experience focused primarily on helping businesses with marketing and sales alignment strategies aimed at driving growth. I help design marketing and sales programs that scale by leveraging the power of technology, specifically CRM and Marketing Automation.