Data Management for ABM.

Account-based marketing (ABM) is more than a buzzword, it’s effective. Every B2B organization should dedicate a portion of its marketing budget to it. Here’s the thing though, despite how much air coverage ABM gets, relatively few articles speak to the importance of your data management strategy for to the successful mechanization of ABM. Specifically, contacts need to be associated with accounts; the leads object can’t be used at all. 

In this mini-guide we look at how the leads object gets in the way of ABM, and how to shift to a contacts-only approach instead.

In B2B marketing and sales you aren’t engaging one person, you’re engaging a buying center. Which is why it’s unfortunate that the majority of B2B organizations still use a leads object in CRM. This is NOT conducive to effectively engaging a buying center.

Think of the leads object as a junk drawer in your house that holds a little of everything but often does not harbor what you’re looking for. In a single record, you’ll find a person’s name, phone, and email—and account-level data such as company name, industry, and revenue size. Individual leads are not connected to other leads and they’re not associated to accounts. The concept of a buying center is pretty much out the window at that point.

Unfortunately, the reality in many B2B organizations is that this junk drawer (the leads object) represents a significant part of the marketing and sales database. We’re not convinced the use of leads makes sense anywhere in B2B. However, if push comes to shove, it does less damage in companies that have more transitional sales and don’t sell into a buying center.

Iron Horse advocates using contacts and accounts rather than the leads object. The primary benefits of diminishing the use of leads and promoting the use of accounts and contacts in your CRM system are:

Better segmentation and personalization.

When a person exists as a lead (and not as a contact associated with an account), the data has usually come from:

• What the person entered into an online registration form
• A purchased list
• A scanned business card.

It’s devoid of the deeper, richer information that you likely already have on the account, such as whether the lead is an existing customer, related to an active pipeline opportunity, or works at a partner account. If you have ever received a call or email from a sales rep trying to sell you a product that you already own, this is one of the major reasons why that happens—in their CRM you’re likely a lead rather than a contact, and the rep didn’t check elsewhere in the CRM before contacting you.

Beyond knowing if the person is an active client or not, think of all the fields that exist on an account versus what you typically have on a lead record. For current clients, account fields might include products purchased, renewal dates, service and support status, etc. For prospects, there are fields like incumbent, industry, and segment if it’s a target account; revenue; employee count; etc. While you may find some of these fields on the lead record, you won’t find all of them. If they do exist, how well-populated or accurate is that single point of data versus the more complete information available at the account level?

Simplified reporting.

Let’s say you’d like to pull a report from your CRM on all of the managers or directors at a CA-based software company that are not current customers. If you’re working with contacts and accounts, pulling that report is pretty straightforward; in Salesforce.com, this might take about five minutes. More importantly, this is also a report that most field marketers (or field sales reps) could make.

On the other hand, if your company is using the leads object, you would need to:

1. Pull the report for contacts.
2. Download a spreadsheet of accounts that are active customers from your CRM.
3. Download a spreadsheet of all the leads in your CRM.
4. Using the company name field and keying off the root email address, do a Vlookup or Index to identify the leads that are active customers.
5. Combine the list of contacts and the list of leads.
6. Dedupe the leads and contacts as necessary.
7. Send the report to the requestor using a spreadsheet (not a link to the report in the CRM).

So, which way is simpler? Beyond that, given the number of steps in getting this report, how likely is it that this report would even be made? Also, what are the chances that a well-meaning rep or field marketer that made this report would only pull a report from the contact or leads section? And no, you don’t have to do what was just laid out in Excel; there are BI platforms for that, and there is the linking of leads to accounts too. But the underlying issue still remains and these are addressing a symptom and not the issue itself.

Also, if you’re using leads in your CRM, any view, dashboard, or report you have on people essentially needs to be doubled—one for leads and one for contacts. Not to mention, the viewer needs to do some quick mental math to get the full picture.

Improved data management.

There’s an assumption in those last two points that there is reliable and accurate usable data. Anyone who has ever administrated a CRM system may laugh at that. The assumption is that leads have the same populated fields as an account and they contain the same responses, i.e. a lead from ACME Corp will list the same industry, revenue, employee count, location, and spelling of the company name as what’s listed on the account. That typically isn’t the case. Twenty leads from the same company will typically show variations in industry, the spelling of the company name, and more, as they are individual submissions. Not convinced? Take a look at your CRM.

The danger here is that the information from those individualized submissions is what’s driving your personalization, segmentation, and reporting.

Furthermore, when it comes to data acquisition and cleansing projects, maintaining a contact-to-account relationship offers you the ability to get a bigger bang for your dollar investment by focusing on cleansing/appending/enriching account-level data and not leads, which are more difficult to connect via domain, DUNS, or what have you.

Easier account scoring without a workaround.

Account scoring is a great concept, but for a concept to drive business value you need the ability to execute. In order to implement account scoring, you need the ability to aggregate all of the people that your organization is engaging with in the same account together; the leads object does not help with that at all. Yes, there are ways to hack it so you can do account scoring while still using the leads object, but there are drawbacks to doing so like in any workaround. Beyond that, account scoring is directly impacted by the account hierarchy that the sales team uses and by the rules used to define how accounts are structured in the CRM. Are they breaking business lines into subsidiaries? If it’s a larger company, is it managed as two separate accounts in the CRM based on region or product line? This is where the workarounds typically break.

Increased sales management and insight.

Put yourself in the shoes of a business development rep (BDR) or a quota-bearing sales team. Is it easier to see everyone related to an account in one location? Or, would you prefer to split the people from your account between two locations: 1) an account with associated contacts and 2) a listing of disconnected people stored in a leads object? Using accounts and contacts makes it easier for your reps to understand the status of their accounts and who is active within them. It also significantly helps with account planning, such as being able to understand the level to which each account is penetrated. In short, maintaining contacts associated with accounts (and not leads) gives reps a much more complete view of an account and the relationship.

Achievable account funnel reporting.

In B2B, demand funnel reporting is critical as it provides insight into how your organization’s qualification and engagement process is working versus where it can be enhanced and improved. Typically, this is done at the person level. However, given advances in technology and an increased focus on ABM, firms like TOPO have encouraged the market to do funnel reporting at the account level. We’re huge advocates of this and encourage every B2B organization to look at funnel reporting at the account level.

The question is, how well can a company do account funnel reporting if it uses leads extensively in its CRM? The answer is not well. If you want funnel reporting at the account level without creating a brittle process that uses workarounds, then you need to standardize on contacts and accounts (and not leads).

There are certainly challenges with taking a contact-only approach, and some of these challenges aren’t insignificant. We’ll look at those in the next section.

Using contacts and accounts in your CRM instead of leads is the right move for B2B companies and it brings tremendous benefits, especially for those that are taking an ABM approach. That being said, taking this approach isn’t 100% perfect. About 92% is amazing and 8% holds some (mini) challenges that companies need to think through.

These challenges are broadly fit into two categories: data (how an organization manages and structures its CRM data) and process (how people use and interact with the CRM). Let’s take a closer look.

Data challenges from not using leads.

Data challenges from not using leads in your CRM fall into three buckets:

ACCOUNT-RELATED CHALLENGES.

Duplicate and errant accounts. When you stop using leads and just use contacts and accounts, more accounts are created in the CRM. What’s often glossed over are the duplicate and errant accounts that are created too. Duplicate and errant accounts impact marketing and sales reporting, and make it more difficult to actually work within the CRM. For example, a sales rep may struggle to figure out which account to place a contact under or a particular report might display an inflated and inaccurate number of targeted accounts.

Account hierarchy. How companies are reflected and managed in a CRM system is a pedantic conversation that is painfully boring to have, but it’s also an important definition that needs to be agreed upon. For instance, will larger organizations be represented in the CRM as one account or will one account be created for each of the company’s divisions or geographies, or the like? You might ask why would you ever do this. It frequently happens when there are different sales targets or sales resources associated with different parts of the same company. It can go down to the individual site or building level too. Something else to consider is whether a company is simultaneously a partner and customer. Do you still use only one account in the CRM or is it reflected as two? The point is the definition and management of account hierarchy has always been a pain in the butt for almost every company. Pushing account creation MUCH earlier in the cycle significantly increases the frequency that this decision comes up.

LEAD CONVERSION CHALLENGES.

Lead/contact integration. Unfortunately, you can’t escape leads entirely as most of the marketing and sales applications that are integrated with CRMs (and their own online registration forms) pretty much all create leads in the CRM and not contacts associated with accounts. This is because the CRM doesn’t know which account to associate a new person with (if the account exists in the CRM) and if the account doesn’t exist in the CRM, you would want to create the account.

Time to convert. There needs to be a process for converting net new leads into contacts associated with an account, which tends to eat up a lot of time. Let’s say you’re a small company that generates 200 form submissions a week and of those, 150 are from new people. Data enrichment aside, let’s estimate that it takes 20 seconds per lead to convert into a contact that’s associated with an account. That’s 50 minutes a week and 43 hours a year, and you see where this is going, right? It’s a time commitment that scales with your company and when you’re generating 4x the number of leads you’re generating now, it’s 4x the time commitment.

Lag time. There is also the lag time between when the lead is created in the CRM (remember most of your integrations create leads and not contacts) and when it is converted. The question you need to address is do you send net new prospects to sales while they are still in the leads object or do you introduce a delay until they are contacts? Especially for “contact me now” forms, etc. you don’t want to delay follow-up, but is it realistic that you can guarantee that the lead will be converted to a contact associated to an account in a rapid timeframe?

Note: Using a vendor such as Lean Data, Full Circle Insights, and CRM Fusion to automate lead-to-account matching can help alleviate some of these issues.

PEOPLE AND ACCOUNTS THAT JUST DON’T BELONG.

Not everyone belongs. There are some leads that come in from marketing activities that are just almost never useful. These primarily come in four flavors:

• No company association. These are people for whom you’re unable to identify a company. They might have ended up in your database because they sent an email to your sales team from a personal email address or because they filled out an online registration form with a personal email address and no company name.
• Never going to be a sale. These are people from companies well outside your target universe. As an example, if your company only sells to large software and high-tech companies, this could be a person that works for a ten-person consulting firm that only works with nonprofits.
• Questionable and sketchy. There are some people that just give you pause. This is the person that fills out an online registration from and works for a company you’ve never heard of, in region where you don’t typically operate, with a website that looks like it was made in the 90s.
• Spam. Obviously erroneous, fake people. For example, Name: Donald Duck, Title: dslaijfl## !!, Company: #@$#@44, Email: Acme@Acme.com.

So, this begs the question, what do you do with them? Do you create contacts and accounts? When moving to a contact- and account-based approach, you will need to determine what action to take when these leads come in.

Process challenges from not using leads.

Here are the process challenges when kicking leads to the curb:

Findability. There’s no doubt that standardizing contacts and accounts has significant benefits for sales. However, if it is done in a haphazard manner, it can make using the CRM harder for account reps. Think about it, you’re an account rep and realistically you care about four or five people at each of your accounts. These are your primary go-to people, the people that you engage with every month, and you really don’t care about anyone else in the account. Now keep that mindset and think about going to an account page where there are dozens of contacts present (or more) with no ability to surface those that you actually care about. When shifting from a leads-focused approach, you will need to consider how it impacts the experience for every CRM user.

Legacy leads mentality. Some sales and marketing executives and operations teams can be resistant to change. They can be quite comfortable in their approach to lead management as-is. Removing the use of leads changes all of that and heavily alters their workflow. They’ve grown accustomed to the measurement and reporting they have honed through the years and “new” isn’t always seen as better unless they’re presented with hard evidence.

Switching to the contacts-only approach is not without some challenges. However, in 99% of cases, these challenges do not outweigh the significant benefits for B2B companies to make the switch. We’ll look at how to address these challenges and make the transition in the next section.

So how do you mechanize a contacts-only approach to CRM? Ideally, it’s from the very start, on the first day you activate your CRM. Most of us don’t have an opportunity to set up a new CRM from scratch without legacy data. With that in mind, let’s look at how to transition to a contacts-only approach to CRM.

Note: This section makes the assumption that the lead management construct at your company is leads reliant. In other words the “leads” object in your CRM is by definition the only way in which new individuals can be passed into your CRM by way of integration. 

Data management in the contacts-only approach.

Data management, governance, and policy directly impact a company’s ability to successfully take a contacts-only approach to CRM. Here are the key data management areas to focus on.

NEW ACCOUNT REVIEW.

Companies are formed every day of every week. As a result, it’s likely that companies with a robust number of accounts will be missing a few. Even if your company has a pure target account strategy, new accounts will need to be created in your CRM—that’s a certainty. The challenge is that duplicate accounts get created along with malformed accounts and that causes problems with contact routing and association, as well as reporting. You might consider barring reps from creating accounts in the CRM and having all new account creation go through a limited number of people. That’s a mistake. It creates a bottleneck and leads more reps to manage their book of business outside of the CRM.

Instead, when an account is created, a process should exist where it is reviewed, at least at a cursory level, by the operations team to ensure it A) is not a duplicate and B) conforms to standards. For standards, outside of key things like a web address and address, make sure you have a clear process for how and when account hierarchies are used (and specifically how they are not allowed to be used) and make sure this agreement is consistently applied to the entire sales organization.

This review may take place once a week, or every other week, but at least once per month. This review process will be enabled by a new account creation report which outlines the new accounts recently created (e.g. the last 35 days) and excludes accounts created by operations.

CONTACT GOVERNANCE.

In addition to reviewing account creation, a company also must look at contact placement. Create a report that looks at “outlier contacts;” contacts that look like they aren’t in the right account, such as a contact whose root email address (excluding personal emails) doesn’t match with those of the other contacts under the account. Also, create a second report that identifies newly created and recently moved contacts. Ensure that Operations scans through these reports once a week to ensure contacts are being accurately placed under the right accounts.

FINDABILITY AND SORTABILITY.

Not all contacts are equal. Some are very important and account management speaks with them on a weekly/monthly basis. Others are contacts that are related to the account but are of less strategic importance. Don’t treat all contacts the same in CRM views and in reporting. Move the contacts that are most important to account management and sales to the top; don’t bury them. Create a “contact type field” that denotes if a contact is a primary contact, administrator, or what have you, and use this field to update account contact views.

PREVIOUS EMPLOYEES.

People retire or move to new organizations every day. This is going to happen regardless of whether your company is using leads or standardizing on a contacts-only approach to CRM. When standardizing on contacts, though, it tends to jam up your CRM’s views and usability more than if you’re using leads. So, be sure you have a way to identify leads that are no longer at the company and a way for reps (and marketers) to easily exclude these contacts from views and reports.

NOT-USEFUL LEADS.

Inevitably, a company will have people in their CRM that are not yet worth your effort. Marketing and sales operations teams need to jointly agree on how to process and manage these contacts. Here are the five main types of leads you might see and what to do with each group.

1. No company. Keep them in the leads object until the company can be identified either via progressive profiling, inside sales qualification, or use of inferred IP.
2. Too far from ideal customer profile (ICP). Marketing and sales may wish to call out specific industries, countries, or company sizes (e.g. under $5m in revenue) which by default stay in the leads object.
3. The ones that just give you pause. This is an area in the grey. People tend to keep these as leads with guidance for operations to review them once a quarter.
4. Spam. Obviously erroneous, fake people should be purged from your CRM.
5. Competitors. It’s common to see companies deleting “leads” from competitors. Don’t do this. It gives marketing insight into the content they are consuming, pages they are visiting, and more. Also, it gives you the ability to segment them out of marketing emails or (better yet) the ability to personalize your website to them if you have website personalization technology (e.g. a big we are hiring advertisement).

ACCOUNT STAGNATION.

This process should already exist, but it becomes more imperative for companies that heavily make use of contacts and accounts. Ensure there is a process by which all the accounts that exist in your CRM are evaluated at the end of the year. Specifically, you want to ensure your company addresses those that were acquired, merged, or went out of business.

DATA MANAGEMENT OWNERSHIP.

It’s a lot of data management/stewardship. Don’t just say marketing or sales ops is going to share responsibility and leave it at that. For each necessary data management or data governance process to successfully mechanize a shift over to a contacts-only approach to CRM, you need to bring it down to the individual. Specify who is responsible for reviewing the governance report each month and taking action and who is responsible for making sure lead routing and conversion is accurate. When it’s abstracted out to a group or even a function, that’s when accountability wanes and issues start to emerge.

Process considerations for lead conversions in the contacts-only approach.

If your system still forces you to create leads, here are things you’ll need to think through. Even if your company has the luxury to technically bypass the leads object, you’ll benefit by thinking through their related areas, especially, “Documented Agreement on Contact Placement.”

LEAD MANAGEMENT APPROACH.

There are three main approaches that organizations use for their lead management method.

• Point of Interest (POI) lead management. In this approach, every time there is a marketing response (e.g. form submit) a new lead is generated in the CRM.
• Hybrid lead management. A new lead is created for a marketing response if one does not currently exist within the CRM system for the person in question. It’s important to note here that if there is already a lead for the person in the CRM, a new lead will not be created; however, if there is a contact for the person in the CRM, a new lead will be created.
• Unique lead management. A new lead is only created if a lead or contact for the person in question does not exist in the CRM system.

When standardizing on a contacts-only approach to CRM, the unique lead management approach significantly reduces issues with data management, interaction management, manual effort and reporting. Read more about why we highly recommend using the unique lead management approach here.

AGREED UPON LEAD-TO-CONTACT CONVERSION POINT.

An important, critical decision that every B2B company needs to make is at what point a lead needs to be converted into a contact associated with an account. This significantly impacts marketing and sales reporting, segmentation, personalization, and more. It’s also something that the vast majority of B2B companies have no internal agreement on. At the same company, some reps convert the bare minimum of leads into contacts, some reps convert everything, and there is a whole grey area in between. When taking a contacts-only approach to CRM, a company wants to move everything out of leads as soon as possible. With this in mind, here are three conversion points to put in place as a starting point.

• Lead engagement. A lead is to be converted to a contact when a rep receives active engagement from the lead via phone or email correspondence.
• Existing customer/prospect accounts. New “leads” from existing customers and prospect accounts are to be converted to a contact. Operations should manage this conversion process, not sales.
• New account creation. When new accounts are created, leads related to the new account are to be converted once operations approve the account creation. Operations should review all newly created accounts and convert their leads to contacts within five business days, though operations will be expected to review newly created accounts daily.

DOCUMENTED AGREEMENT ON CONTACT PLACEMENT.

Clear and agreed-upon guidance on what drives contact placement under accounts needs to exist. In the case of massive organizations and organizations with subsidiaries (e.g. Microsoft, IBM, and GE) if it is not clear under what account a contact should be placed, where does it go and who does it get assigned to?  Typically, a good rule of thumb is the parent account for the company in question.

AUTOCONVERSION AND ASSIGNMENT.

Converting a lead into a contact and associating it to the right account doesn’t take that much time, maybe 15 seconds, 30 seconds? When you convert one or two contacts it doesn’t take that much time. When an inside sales rep is converting 28 leads a day on average and it takes 20 seconds each that’s an entire week of wasted time converting leads to contacts each year. Multiply that number by the number of inside sales reps. That’s a lot of wasted time, not to mention lapses in processes followed, incorrect assignments, and so on. When you take a contacts-only approach to CRM you really need to invest in automatic lead conversions (so-called lead to account matching) like Lean Data, Full Circle Insights, and CRM Fusion.

Boil one pot at a time.

Don’t attempt to shift over to a contacts-only approach to CRM all at once. That creates a lot of upheaval and disruption. Take a phased approach, which will roll out the change over a period of several weeks or months depending on the size of your organization. Start with strategic accounts and global account managers (GAMs). There, you will find a relatively small number of account managers (AMs) who typically use contacts heavily. Go to existing customers next and then target accounts. Once these are addressed and stabilized (reps are comfortable with deemphasizing the use of leads, routing and conversion functioning properly, and reports transitioned) then deal with everyone else.

If you’ve bought into the idea of not using leads in your CRM, that’s great but now you have the task of convincing others of the same thing. If you’re like 99.88% of the companies we’ve worked with, this is the right move. Here’s how you make the case for it.

Assess what needs to change in order to only use contacts in your CRM.

The next thing to do is review all your lead management processes, and marketing and sales reporting (specifically) attribution. Don’t do this in a vacuum; lead management goes beyond just one department. Be sure to conduct interviews and understand the lead management processes and how leads, contacts, accounts, opportunities, and the like are used by other functions including:

• Marketing – Programs/demand generation
• Marketing – Marketing Operations
• Marketing – Leadership
• Sales – Sales Operations
• Sales – Tele prospecting/Inside Sales
• Sales – Direct Sales
• Sales – Global Accounts/Strategic
• Sales – Leadership
• Services and support

In performing this readiness assessment, realize that in our experience, larger organizations (especially companies with $1B+ in revenue; multiple subsidiaries; multiple region organizations with net new, established, and legacy product lines) tend to have more than one singular end-to-end lead management process. This isn’t bad, because frequently, a one-size-fits-all lead management process is not recommended for companies of this size and complexity. For example, in one part of the business tele-prospecting may create opportunities when a meeting is scheduled, and in a different part of the business, tele-prospecting may pass leads to quota-bearing sales reps, where they may only create opportunities when a pipeline deal is identified.

What should you do if you’re a large, complex organization? Assess the lead management method that is most commonly utilized at your company to establish a base point. Then, after you do the analysis and obtain initial buy-in, review and evaluate the other lead management processes in your company.

On the other extreme, if you’re a smaller company, you don’t need to do nine (or more) structured interviews. Just make sure you speak to each group or function that uses the CRM and make sure you have a clear understanding of how and why they use leads, and what would need to change if they didn’t. If you’re a really small company this could just be the equivalent of talking to one or two other people.

Two areas to specifically call out in this review are data duplication and reports and dashboards.

DATA DUPLICATION.

Evaluate the duplication rate of and between leads, contacts, and accounts and the level that data between them is consistent or non-aligned. As an example, if there are two Bob Smith records for ACME Corp with the same email address (aka a tight match) does Bob Smith have the same title in both records? Is he assigned to the same account owner? Progressively quantify (from most strict to fuzzy matching) the number of records that fall into each match criteria and the merging logic to be used (i.e. duplicate records that are owned by two different individuals, how to determine who the owner will be).

REPORTS AND DASHBOARDS.

Evaluate the reports and dashboards that are currently utilized by your company and the degree to which they are dependent on the leads object and/or lead-to-contact conversion. While doing this evaluation it is also recommended to identify which reports/dashboards may be archived or otherwise purged from the system as the time to do so will be minimal.

I didn’t call out auditing a “leads” journey explicitly, conversion points, assignment rules, handoffs, service level agreements, activity, and task utilization. All of this is critical, but it’s just that data duplication and the impact of leads on reports and dashboards are two areas that get frequently neglected.

Net-net, the output you want to generate from this assessment is a synopsis along with a write-up that outlines:

• The existing lead management processes that need to be updated
• How the processes need to be updated along with why the change needs to occur
• The new lead management processes that need to be put into place
• Why the processes need to be put into place and why it wasn’t necessary before

Getting buy-in for only using contacts in your CRM.

Marketing can’t make the case to take a contacts-only approach to CRM alone. We’ve seen that done before, and each time it went incredibly poorly. It also goes badly when one doesn’t recognize that marketing and sales hold two distinct groups—end-users and operations teams—and what they are interested in, and how you need to communicate to each group, is different.

To help secure their buy-in (and to structure your thinking, too) make a pitch deck that summarizes the value to your company and the changes this shift entails. Give respect to the fact that it’s a journey and not a quick pivot over a few days. The deck should be somewhere between 8 to 15 slides and the key slides to include are:

• Proposal. Description and outline of moving from “leads” to “contacts and accounts.”
• End benefits. Overall value proposition of only using contacts in your CRM.
• Phased benefits. Specification of when your company will obtain each benefit and/or the degree of each benefit relative to a timeline and/or step in the project plan.
• Areas impacted. Definition of the existing lead management processes impacted by this project and the degree of each required change.
  • Up to four appendix slides to provide more description on the recommended changes.
• Teams impacted and required players. Specification of the teams which will be impacted by the project and the players required to successfully move the project forward. Use a continuum of 1-5 to display the critical level of team impact and player involvement.
• Project plan. Outline the major phases and milestones of the plan.
• Dependencies and assumptions. Definition of the primary assumptions and dependencies on which the project and project plan are based.
• Next steps. If approved, outline the initiative’s next steps.