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?
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:
- Pull the report for contacts.
- Download a spreadsheet of accounts that are active customers from your CRM.
- Download a spreadsheet of all the leads in your CRM.
- 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.
- Combine the list of contacts and the list of leads.
- Dedupe the leads and contacts as necessary.
- 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.