No matter how much you spend on lead acquisition, there will never be enough qualified, sales-ready leads to support a large sales team. And unfortunately, most sales organizations toss out non-sales-ready leads instead of recycling them. A few years ago, Michael Brenner was running Global Marketing and Content Strategy at SAP. He decided to run campaigns targeting those discarded sales leads to see if he could nurture them until they were sales-ready. Over the course of 3-6 months, these leads had a great close rate, proving to the sales team the value of early stage leads.
I decided to interview Michael to find out how he did this.
I’ve admired Michael’s work for years. He’s a globally-recognized keynote speaker on leadership and marketing. He wrote the bestselling book The Content Formula, and his articles have been featured in The Economist, The Guardian, and Entrepreneur Magazine. This year, Michael was named a Top Business Speaker by The Huffington Post and a top CMO Influencer by Forbes.
I first met Michael when he was the head of global marketing for SAP. There, his innovations in marketing strategy resulted in massive growth. Michael also headed strategy at NewsCred and is now running his own firm where he works with Fortune 500 brands and smaller companies helping drive sales growth.
Michael started his career in the sales organization. This gave him an important foundation and is why he has always argued that marketing should be held accountable for delivering real business results.
When he takes on a marketing leadership role, the first meeting he sets up is with the head of sales to talk about what sales needs from marketing. He wants to know what they’re getting today, what they need, and how marketing can improve. To Michael, Sales is Marketing’s customer, and they establish a contract up front on what Marketing is expected to deliver.
I started my conversation with Michael by asking him for examples of things that those sales leaders have asked for. Listen to the podcast by clicking the “play” button above or read the transcript below.
You can also listen to previous podcast episodes about driving growth by developing a customer-centric channel strategy and managing lifetime customer experience.
Transcript for the Turning Disqualified Leads Into Sales Gold Episode
Michael Brenner: In the first quarter of the year, sales wants as many leads as possible. In the last quarter of the year, sales only wants the leads that are going to convert so they can hit their number.
Candyce Edelen: Right.
Michael: We’ve lived in this quality-quantity dilemma over the business or annual planning cycle of the sales and marketing relationship forever. That’s why I think it’s important to understand, and in some ways accept, that that’s going to happen, but also come to the realization that … When I was in this position at SAP where I was specifically responsible for delivering leads to sales, I sat down and I defined what a quality lead was. I had, and I was lucky enough to be given, the resources to essentially find every lead out there that was ready to buy. Here’s the problem: once you do that, there just aren’t enough to drive sustainable growth.
That’s why I think marketing organizations really need to start training the sales team that it’s important not to just ask for a quantity of leads in the beginning of the fiscal year, but also to understand that the need to scale growth means reaching up the funnel, if you will, to earlier stage opportunities and really try to identify in this digital world, buying signals — and triggers are so much more easily identified and measurable — to start working your way up the funnel to generate in a systematic way leads that can help drive sales, not just this quarter or this year but even for next year or the next cycle.
Candyce: One of the challenges that I keep seeing is sales wants to get leads that are ready to buy, and marketing tends to throw leads over the fence to sales and stop nurturing once the lead has been turned over. But with these earlier stage leads, in my opinion, you need to get in earlier. You can’t wait until a lead is 70% through their buying process, because they’ve already cast vision in the organization. In fact, I think CEB estimates now that about 30% or 35% of the way through the buying process, they’ve established a vision for what the solution is going to look like. If your sales team hasn’t gotten a chance to influence that, then you’re selling from behind. How can organizations do a better job of working together to nurture a lead that’s earlier, that’s not going to close next quarter, but needs to talk to sales early?
Michael: I think that there’s a couple of things, and I’ll give you one example of something we did at SAP. I think in marketing we have to understand that … I really truly believe that there’s no job that’s harder than a sales organization. They’re the ones that carry all of the burden of the top-line number that CEOs give to their boards and shareholders every single quarter. That’s a tremendous amount of pressure. I think marketing has to take on and accept the role of nurturing those leads to the point at which it makes sense for sales to have a conversation.
Now we talk about BANT and the different qualification methods, and so one of the things that we did when I was at SAP was we would use qualification criteria to get sales the leads that were ready to buy today, which is what they’re classically good at doing. Then we used the SDR teams to come up with a process for marketing and a handover to sales for those leads that, let’s say, maybe require a little bit more nurture, but certainly should be touched, as you said, by the sales organization.
So, we put together campaigns, and I’ll talk to you specifically about one example.
The highest performing campaign I ever worked on was something we called “the rock” “ROC”. Basically what we did was we took leads that were disqualified by sales, and we nurtured them. That’s why it was called response optimization. We nurtured them with some of our top performing non-promotional content. What I mean by that is we identified a lead using a white paper or using an event or using some sort of marketing outreach activity. The sales team said, “Oh, this isn’t a ‘ready-to-buy’ lead,” and they would kind of discontinue it or disqualify it.
When we nurtured those leads with middle stage content — essentially deeper forms of how do I do stuff … At SAP, it was things like, how do you implement a strategy to transform an organization in the digital age, or how do we improve customer experience, real middle stage, deep, how-to type content that wasn’t necessarily yet having the conversation about why they should choose us, but ultimately helping them see how they could solve that vision that you mentioned. It was, like I said, one of the highest performing campaigns that we ever saw.
It was essentially a recycle of previously disqualified leads that just weren’t ready to buy, because what had happened is time had gone on. These folks had gone from probably an early stage into a much more deeper investigative stage, and were looking for information. We wanted to be the source of that information. The reason this campaign was so successful was not because of the response rate, but because of the conversion to sales that we saw over the course of three to six months. It wasn’t an effective campaign because we had great conversion rates. It was a great campaign because we had great close rates. It started opening the sales team up to understanding that early stage leads really do have value, maybe not today but they certainly do tomorrow, and that marketing has to work with sales in order to figure out how to nurture them.
Candyce: Then with those leads, did sales interact with them as they were kind of going through the process, or did marketing take the full responsibility to create the vision?
Michael: Yeah, so what happened was we were … We came to this realization, both marketing and sales, that ready-to-buy leads, the most deeply qualified leads, were not … There just weren’t enough. We were buying everyone that we could find, and there just weren’t enough out there to have the sales team meet their goal. They started to feel the pain of needing to move up the funnel. We started with those disqualified leads, and these were folks that were kind of in the late, middle stage. Once we optimized them, then sales realized that we needed to move up the funnel even further.
The first step was really a marketing nurture program with a handoff to sales utilizing the exact same process they always used. Once we had kind of worked our way through those recycled leads, sales recognized the need to get involved. We started building similar types of campaigns, but we were activating the sales team to implement those. In one example, we were using essentially social selling techniques. The campaign offer in that response optimization campaign I mentioned was essentially a collection of our best assets, our best campaign assets, and marketing was essentially executing the nurturing.
What we started to do was then make those same insights and assets available directly to the sales organizations. They were then using those to directly nurture some of the top accounts and key accounts and existing customers and net new prospects that they were trying to sell, and so we were implementing a direct sales marketing nurture program. We started to see inquiry to what’s called an MQL or marketing qualified lead go from the 1% range for those kind of leads into the 3% and 5% range, which doesn’t sound like a lot but it’s a 3X, 300%, 400% increase in the amount of conversion. Because of the large size of the folks in those earlier stages, the amount of leads … You know, we actually had a good problem, which was we now had too many leads. Then we had to throttle back a little bit, so you go back into that sort of quality versus quantity discussion that we always have.
Candyce: Right.
Michael: But yeah, those were the sort of necessary steps we went through for sales to realize they needed to take responsibility for nurturing those earlier stage leads as well.
Candyce: For the CEOs that are listening to this conversation, how can a CEO get sales and marketing to sit down? What kind of steps have you seen organizations take to get to the point where they’re working together so collaboratively like that?
Michael: Yeah. For us, it was a math problem, and a math problem that only came about because of a pretty fortunate situation where we were optimizing into lead generation activities that drove those late stage leads. The math problem was we recognized there weren’t enough of them. I think that if you follow the bread crumbs of the math — and I don’t think a lot of CEOs want to necessarily get into those weeds, but if they have a data scientist or they have an analytics or even a CFO who can dive into that kind of analytics, then essentially every organization that I’ve sat down and worked with — they’ve seen the same forecast where even if you have the highest converting sales organization, the most talented people, marketing is working on all cylinders and generating all of those late stage qualified leads, that doesn’t, almost always doesn’t, necessarily map up to the growth rates that a company needs to see.
I think at some point it comes down to math and analytics and forecasting, but I think just on a more emotional level, the conversation I like to have with CEOs is that you as an organization have an opportunity to be the voice of authority and thought leadership and education for the potential customers that you could convert tomorrow. The companies that are successful, the CEOs that are successful, are the ones that commit to being almost empathetic and educational to early stage potential customers.
The cultural implications of that are pretty vast. It makes sense when I think you sit down and look at the math, but it’s almost counterintuitive. What I mean by that is most CEOs think that you talk about your product and why it’s better, and more people will buy it. In fact, we live in a world where those are the messages that customers are tuning out. The things that we’re tuning into as prospects are education and thought leadership and information. The only companies that are going to win and sustain growth in the future are those that kind of counter-intuitively commit to this empathetic education for customers.
Candyce: Yeah. I think that’s a really good point, because it’s that education of how does your target audience make their business better, how did they become more successful at whatever the role is that you’re targeting, but also I think targeting that at a higher level too. I see some companies that … they target their messaging too low in the prospect organization to drive that kind of change. Do you see that?
Michael: Yeah. I mean, the line that I always use with CEOs is that the buyer journey doesn’t start with the search for your product. That’s exactly where most marketing messages are focused. Those are the messages that we’re tuning out, and we’re actually running and hiding from in many cases with ad blockers and the DVRs and the direct mail that goes in the trash. It’s really a cultural imperative, I think, for CEOs to understand that it’s … A lot of companies talk about putting their customer at the center or being more customer-centric or thinking about the customer experience, but I think we fall short in many places because the cultural imperative really isn’t fully understood. The buyer’s journey does not begin with a search for your product. It begins with a problem, and too few companies really own the problem. You have a solution. The reason you have customers is because you have a valid solution, but customers are going to educate themselves on that point. What companies need to do is own the problem and spend their marketing dollars educating their customers on that.
Candyce: Yeah, I think that’s a really great point, because usually the company that makes you aware of the problem and helps you find a solution for it first is the company that’s going to win the business.
Michael: That’s right.
Candyce: I think the numbers are something like 70% of deals go to the company that created the vision.
Michael: That’s right. That’s right. The one trick that I give CEOs that are like, “Okay, great, well, how do I do that?” and there’s one question they can ask. Whenever they look at a marketing strategy or a marketing campaign or program, what’s in it for the customer? If there’s not a good answer, if it’s clearly just promotional focused, then there’s … Yes, of course, the people that are in the late stage, the prospects that are in the late stage, may gain some benefit and insight from that piece of marketing collateral, but if the weight of the benefit is really on the company and not on the customer, then I think it should be reconsidered.
Candyce: That’s a great point. We are out of time, so let’s close with that. Thank you so much for participating in our podcast. We appreciate it and appreciate the great suggestions that you’re making here.
Michael: Yeah, my pleasure.
Takeaway From This Episode
Many thanks to Michael for sharing his wisdom and experience with us! I hope you, our listeners found value and some good ideas you can put into practice in your business.
What Michael said about nurturing discarded leads is crucial. No matter how much you spend on lead acquisition, there will never be enough sales-ready leads to scale growth over time.
But just because a lead isn’t immediately sales-ready doesn’t mean they’ll never buy. So you MUST find a way to become that voice of authority and educate potential buyers BEFORE they’ve figured out what they need. If you invest in driving future demand by educating potential customers over time, you’re much more likely to create sustained growth.
For more information about Michael and his company, explore one of the links below:
Website: marketinginsidergroup.com
Twitter: @BrennerMichael
LinkedIn: www.linkedin.com/in/michaelbrenner
The Content Formula Book: marketinginsidergroup.com/the-content-formula
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