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Most of you are too young to remember Art Linkletter. His radio show House Party and the television show Art Linkletter’s House Party aired five days a week from 1945 to 1969.
A segment of each television show revolved around a precocious 3 – 8 year old child giving an unassumingly comical answer to Art’s question.
Here are a few examples of kids saying the “darndest things”:
Q: Who was George Washington’s wife?
A: Miss America.
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Q: What are the qualities of a woman’s ideal man?
A: A man that provides a lot of money, loves horses, will let you have 22 kids, and doesn’t put up a fight.
We get a good laugh out of it when it comes to kids—and rightly so. But in my own experience, I’ve come across marketers who utter a good bit of “darndest things.” But it’s not a laughing matter when you’ve got millions of dollars on the line. There’s a serious problem at hand, and as someone who’s spent many years helping companies in this realm, I can’t just stand by and do nothing.
According to Wikipedia, Root Cause Analysis (or RCA) is defined as “a method of problem solving that tries to identify the root causes of faults or problems. A root cause is a cause that once removed from the problem fault sequence, prevents the final undesirable event from recurring.” I’d like to take some of the not-so-funny “darndest things” I’ve heard marketers say over the course of 2014, unearth the issues, and nip the problems in the bud.
At the start of 2014, we were brought in to support a group of sales reps who did not make their numbers in 2013. In 2014, these same territory reps exceeded their numbers. Their “reward”? No more support for 2015. Taking support of these reps out of the equation is definitely not going to “remove a cause from the problem fault sequence that caused an undesirable event.”
Simply put, the root cause of the problem in 2013 was that reps were forced to find their own leads—or had poor-quality “leads” dumped on them—most of which they ignored. Snatching support away from these territories will cause what I call a ‘bubble in the funnel.’ In three months, there will be no pipeline, and by the time they figure it out, half of their year will be gone. The result? They’ll miss their numbers again in 2015.
In the situation referred to above, the cost of qualifying poor leads is about $2,600. The cost of qualifying through proactive outbound prospecting is about half that. You do the math. You could: (a) spend $2,600 per fully-qualified content aggregation lead; (b) spend $138,900 on 6,000 leads that qualify at about 1.28% and send them straight to the field (these leads usually end up in a black hole); or (c) spend $1,300 per fully-qualified proactively sourced outbound lead.
What is the root cause of this problem? The prevalent corporate paradigm dictating that the marketing department gets paid based upon the quantity of leads that they pass along to sales, and not based upon the quality of the leads that they provide.
If marketing spends $1,000,000 in the middle of the forest, will the money still be gone? For years, the two most-wanted things by corporations have been (in order) higher quality leads and a higher quantity of leads. If marketing is not generating highly qualified leads for sales, then what are they doing?
The root cause of this problem? Very few companies know how to hold their marketing staff accountable for results. How about a simple measurement of the percent of leads provided to sales that are actually worked by sales? (And, by the way, if the lead is not accepted or is ignored by sales, that scenario should be examined too.)
This one is classic. In the rare cases where it makes sense to use direct mail (in a B2B environment), it makes no sense at all to skimp on the list. In fact, any list that you intend to target should be cleaned and qualified before you invest any funds into that direct mail campaign.
The root causes here are: (a) ignorance regarding the relatively poor quality that is inherent to most lists; and (b) lack of understanding, or naiveté, with respect to the general sleaziness of the list/database business. (Note: There are some very good list providers out there, but they are few and far between, so you should always carefully vet your sources.)
In my white paper, Mind the Gap, I define the formula for revenue success as “Revenue - Inbound - Nurturing = THE GAP.” It is little wonder that, generally speaking, inbound leads close much faster than outbound leads; however, they also typically close at a much lower average deal size. Furthermore, with the possible exception of lower-ticket commoditized offers, there are not enough of them to keep most companies afloat, much less promote growth.
It is not a matter of inbound being better or worse than outbound; it is a matter of measurement. How much inbound do you drive? How much does it cost? And what do you need to do to drive the rest of the revenue needed? Nurturing is one important element of the solution. Minding THE GAP is another. There are dual root causes at work here: (a) Most marketers have neither the tools nor the data to measure much more than the basics (number of leads and cost per lead); and (b) Sales simply measures revenue. One industry pundit I spoke with recently called this problem “a politically correct haze.”
I’m convinced that no marketer wants to do a bad job. Unfortunately, sometimes the results speak for themselves. As we prepare for 2015, you can dare to do something different, or you can ignore me and just say “that’s how we roll.”
If you have some “marketing people say the darndest things” quotes, I would love to hear them.
Dan McDade is President and CEO of PointClear, LLC, a prospect development firm that helps B2B companies drive revenue by nurturing leads, engaging contacts and developing prospects until they're ready to purchase.
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