Who Bears the Costs of Invalid Leads?

Generating new leads is the lifeblood of every business, regardless of size. Keeping the sales pipeline full and successfully taking a potential client through the buying journey to become an official sale involves a comprehensive lead generation strategy and multiple departments—from outside lead aggregators to internal marketing departments to sales professionals. Many organizations now even have customer success managers to help with the lead nurturing and retention process.

28th Mar, 2021
TrueQC

So, when bad or invalid leads are fed into the system, who bears the cost and which department does it hurt the most? The answer: Every touch point feels the pain. A lead can be considered bad for many reasons: insufficient or inaccurate data, not the right target audience, or even due to duplication. Regardless, bad leads are bad for business. There is no way around it. But it goes much deeper than that. Invalid leads negatively impact the entire lead generation process and everyone who is involved during every point of contact.

Agency’s Loss: Many organizations farm out their lead generation efforts to an agency or aggregator. These third-party companies gather consumer and business information that they can then sell on to a business needing to purchase new leads. A lead generation company uses different categories to organize the data so it is relevant to the target market, and some may even organize leads depending on levels of interest. However, if the leads they are contracted to provide are invalid, their entire business model suffers. Their reputation will be tarnished and not only do they risk losing their current customers but future clients as well.

Marketing’s Loss: Marketing departments are ground zero for lead generation in most organizations. Its’ role is to create brand awareness, educate the marketplace and ultimately generate quality leads to feed the sales pipeline. Growing the business should be the primary objective of marketing and most of their budget is dedicated to this critical effort. If marketing is continuously passing on low quality or bad leads over to their sales professionals, it will have immediate impact on revenue. The outcome is lost time and money, which results in a broken process leading to mistrust between the sales and marketing departments.

Sales’ Loss: Because lead generation is the first step in the sales process, both quality and quantity are important factors. Quality leads are leads that a salesperson has a good chance of closing, which means they must at least have the potential to become customers. Without qualified new leads filling its pipeline, new sales opportunities are stymied. When sales professionals are chasing down unlikely buyers, they are wasting their time which could be better spent on more interested buyers or strengthening their relationship with existing customers. When sales are negatively affected, the entire company feels the pain.

At the end of the day, a successful lead generation process is essential for the success of any business. It has many moving parts starting with good customer data and includes an efficient customer relationship management system that is being used properly, a comprehensive lead nurturing process, and a seamless internal system whereas marketing turns over those qualified leads for sales to close. When an invalid lead enters the system, inefficiencies abound creating a ripple effect across an entire organization and even its third-party lead provider partners.