What B2B Targeting? Why Sales Hates Your Leads

Olin Hyde

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The sales team hates your leads. It's true. But you're not alone. All over the B2B Demand Gen universe the same conversation is happening. What do I have to do to please these people? Why aren't my leads converting? Today we're going to talk about why the sales team hates your leads and what you can do about it. LeadCrunch[ai] uses artificial intelligence to drastically improve the performance of B2B demand generation campaigns through account-based "lookalike" modeling. Click the link for more information. https://leadcrunch.com/solutions/

Posted by LeadCrunch on Wednesday, March 20, 2019

In this episode of the Green & Greene Show, the LeadCrunch B2B podcast, seasoned marketing experts talk about B2B Targeting.

 

Hosts: J. David Green and Jonathan Greene

Topic: B2B Targeting

Subtopic: Sales Hates Your Leads

Duration: 18 minutes

 

TL;DR

B2B Sales vs. Marketing: What They’re Really Thinking 

Why B2B Lead Quality Sucks Most of the Time

How Firmographics Are Like Bad Dating Sites

How B2B Lookalikes Are Fixing Targeting

The Gap: Who You’re Targeting vs. Who Your Real Market Is  

Define Algorithmic 

B2B’s Addiction to Volume & Why It’s Bad for Business

How Better B2B Targeting Makes Everyone Happier 

 

Podcast Transcript

[INTRODUCTION]

[0:00:05.1] ANNOUNCER: Live from deep in the heart of Galveston, Texas all the way to the gleaming shores of Jacksonville, Florida, it’s the Green & Greene Show. Here are your hosts, Dave Green and Jonathan Greene, ready to unlock the mysteries of scaling demand gen. The Green & Greene show is brought to you by LeadCrunch, which has reimagined how to find B2B customers at scale.

[INTERVIEW]

[0:00:25.9] JG: Dave Green, Jonathan Greene. That’s why they call it the Green & Greene Show. Very clever.

[0:00:32.3] DG: I was wondering about that. I didn’t get it. I had no idea where the name came from. Hey, Jonathan.

[0:00:38.4] JG: We’re not exactly known for our clever naming conventions, are we? Anyway, this show is sponsored by LeadCrunch, and we’re here to talk about B2B—all things B2B demand generation, really. Today, we’re going to dive into the very sticky, very prolific topic of why the sales team hates my leads.

B2B Sales vs. Marketing: What They’re Really Thinking 

[0:01:02.5] DG: I think that’s a fantastic topic. I’ve probably talked to a thousand marketers about leads in my career. I mean, it’s a lot. I’ve talked to way more salespeople about the leads of the marketers. The perspective on that usually falls into two distinct camps. The marketer perspective is quite often, “Salespeople suck.” They don’t follow up and they don’t put much effort when they do, and they don’t know what they’re doing when they do. The other one is the leads are so unqualified that they’re a complete and total waste of time. What’s your thought on that, Jonathan?

[0:01:47.1] JG: It’s like which came first, the chicken or the egg? It’s a broken recording that plays on a continuous loop in just about every organization I’ve ever seen. It’s definitely a topic that people are going to go to jibe with for sure.

[0:02:05.0] DG: If you’ve ever seen that movie, Groundhog Day, that’s actually what it feels like. It’s almost as though you can mouth the words with people as they’re telling you what’s wrong.

[0:02:21.3] JG: Yeah, let’s get into that real quick. We have 15, 20 minutes, so let’s see if we can shed some light on it and perhaps even offer a solution or two. What do you think is the core reason? There are many reasons people’s leads suck, but let’s try to tackle the Pareto analysis of what are the big ones.

Why B2B Lead Quality Sucks Most of the Time

[0:02:42.6] DG: I think it starts with a lot of people responding to a campaign who are actually not ready to talk to salespeople. I always like the analogy of buying a car. Of course, you go online, and you do all your research there, now. At the point when you actually go out to a lot, you may still be in a browsing mode. You don’t really want to talk to the car salesman who’s going to jam you into a test drive. That’s how a lot of people are. They’re just not at that place in the journey, and you have to respect that. That’s one reason. I think there are some bigger reasons, though. What are your thoughts?

[0:03:22.8] JG: I think this is a targeting issue, predominantly, and it has to do with the way, particularly in the B2B space, people target and the targeting methodologies that have been traditionally available to them over time. I think one problem is that, if you think about who you can target in the entire market in terms of it’s a very generic Venn diagram, on the one side, there are people we would like to engage with and on the other side, people who would like to engage with us and the overlap is you’re closed-one business.

The problem is that people try to draw a square over the top of that, and that’s their targeting, because all they have available to them are firmographic, basic tenets of targeting. What vertical is the business in? What industry? How big are they from a revenue perspective? How many employees do they have? That’s really about all you have to work with.

Come to find out, the industry information is not really good. Those NAICS industry codes are really developed for governmental reporting, not for B2B targeting. When you lay your desired targeting parameters over top of that Venn diagram, you find that you’re only really covering a very small percentage of it. Most of the percentage is people who are not really who you’re looking for, because it’s so inexact. Does that make sense?

How Firmographics Are Like Bad Dating Sites

[0:04:52.6] DG: Yeah. Imagine you’re trying to find a life partner. You have three or four pieces of demographic information. You know their age, and you know the geography, maybe their income, and I don’t know, maybe height, weight, or something. That’s already five.

That’s not really a very good filter on who you might love for the rest of your life. It’s really no different than that. There are much more nuanced things going on which connect businesses to each other and connect people to each other. I think we need to put a lot more focus on that to your point, for some of the reasons you mentioned.

[0:05:42.4] JG: Yeah, that’s a really great analogy. You need more than demographic, firmographic information to find the right leads, just like you need more than basic demographics to find the person you’re going to ultimately love. It goes much deeper than that. It goes into  your interests. Do you have friends in common? Are there commonalities between you? What’s the chemistry like?

Up to this point in history, nobody that I’m aware of in the B2B space has really tackled this issue of getting some deeper dimensionality to the targeting parameters. We try not to do a lot of gratuitous self-promotion around here, but I think LeadCrunch is cracking this egg, and it’s one reason I’m excited to talk about it. Our vector targeting scheme is beginning to move the needle here in this space. Do you want to talk about that for a second without being as yucky out there?

[0:06:42.0] DG: It’s an experiment we’re running for ourselves. I think one of the things I always like to do is find out if companies eat their own dogfood as they say. Actually, Jonathan, our digital genius is using a look-alike audience from our technology and our best customer list to then go out and run that against a more generic targeting list that you get with traditional firmographics and that sort of thing. I think, through a half-million impressions, you’re seeing a 3X difference in outcome.

[0:07:24.2] JG: The click-through rate is about 325% greater with the lookalike audience than it is with the standard. It’s basically a standard segment that’s available to anybody in trade desk for the digital marketing vertical. Basically, it just hangs there and anybody can use it. It’s what a lot of people use for targeting in their top-of-funnel, demand generation programmatic display campaigns, that generic segmentation that’s available to everyone.

We just stacked that up against our lookalike audience, B2B lookalikes, and said, “Okay, well what’s the difference?” It turns out, the difference is pretty significant, hundreds of percentages equivalent.

How B2B Lookalikes Are Fixing Targeting

[0:08:06.7] DG: Yeah. I think this is the future. Whether we’re the future or not, I’ll leave that to history in the future. I think this idea of getting a lot more insight and intelligence around people who are your best customers and trying to find people who look like that is about a thousand times smarter. I would use a couple of pieces of evidence to point to what’s wrong.

Is there anybody that gets banner blindness? Why does that happen? The targeting sucks. It’s completely irrelevant and you see the ads all over the place. The people that advertise just aren’t very good at turning that into what I might need. It’s not new. I mean, you go back to when people were sending a lot of direct mail instead of doing digital, and the term “junk mail” arose for a reason. A lot of it you threw it in the trash. There’s plenty of empirical evidence that it’s same thing with e-mails. Spam. We actually have to invent words for how bad advertising is and how off the market is.

The other one, I would say, is if you ever are able to close the loop and you’re really good at this and you’re just knocking it out of the park and you’re doing ABM, you’re doing lead scoring. You’re doing lead nurturing. You have a sales development team that follows up on the leads, all the things that they tell you that you should do. You’re lucky if you get 1% of the people to convert.

Despite or chatbots and all this cool stuff that’s out there that we all get excited about, the problem is more fundamental than that. It really does have to do with the fact that you’re bringing too many people in that you shouldn’t. That means you’re wasting huge dollars. Huge dollars.

The Gap: Who You’re Targeting vs. Who Your Real Market Is  

[0:10:09.1] JG: It’s all about the tightness and the neatness with which you can target. Our chief data scientist, Steve Biafore, likes to compare it to drawing a square on top of all the available companies and saying, “This is who we’re going to target.” In reality, the people who will work best for you, the shape that you need to draw is probably more like an inkblot. There’s just not enough dimensionality in traditional targeting factors to be able to do that. That’s what innovations like artificial intelligence are enabling us to do, to take ostensibly.

Here’s how it works. It sounds complicated, it sounds a nerdy, but it’s really not. Here’s how it works. You bring me a list of the hundred best customers that you’ve ever had, the best accounts. I’m going to take that information and feed it into our handy-dandy computer artificial intelligence. It’s going to do whatever magic it is that it does and compare those hundred companies algorithmically to everybody else who’s in the market. It’s going to come back, based on deep dimensionality, not just size of the company, not just number of employees, not just revenue, but in what ways do these companies relate to one another? Not just how many people, but who do they have? How are they related to one another? What’s their tenure? What’s their experience?

It takes this really deep dimensionality and applies it to algorithmic similarity. Then it kicks out a list, “Okay, based on the hundred companies that have worked well for you, here are the 10,000 companies that you should go after next,” or the 1,000, or the 500, or however many you need. It sounds really complicated, but that’s a really common, sensible way to approach targeting.

It’s going to eliminate a ton of waste and you’re going to stop targeting people, who ostensibly are not what you’re looking for and the sales team. The peasants will rejoice. They’ll be filled with glee, I promise.

Define Algorithmic 

[0:12:01.9] DG: Hey, Jonathan, I live in Texas and I’m pretty sure that a lot of my friends and neighbors don’t know what algorithmically means. Can you help us out with that?

[0:12:16.1] JG: Algorithms are a bit of linear algebra, actually. You probably learned this in high school and very quickly forgot it as soon as you walked away. The difference between us and you is that we have people who remember that thing. If you take a bunch of data points and plot it on a graph and draw a line connecting the ones that work for you, that’s, in essence, the most basic definition of an algorithm.

Then you see what other data points are close to that line. Those are the ones you go after next. They’re algorithmically similar. They’re in the same general area as the companies that are already working for you in a multi-dimensional analysis, basically. There’s not a whole lot of non-nerdy way to explain that.

B2B’s Addiction to Volume & Why It’s Bad for Business

[0:13:03.8] DG: I am so enlightened, man. Thank you very much. I wanted to add one more perspective to this problem. This is really a message for the marketing executives and leaders out there. I think we’ve gotten so addicted to volume. You have to get so many top-of-funnel leads, you have to build so much traffic. It’s that simple quantification that I think helps marketers, especially those who can’t close the loop, rationalize their existence. That addiction to volume drives some bad behavior.

Instead of thinking, “Okay, well, only 1% of these are going to close anyway, can I cut that in half and still get the 1%?” No one wants to do that. They want to just go get the biggest gob of folks they can and talk louder. I just don’t think that that’s the right approach and I think you need to really, fundamentally re-examine some of your underlying assumptions about things.

[0:14:08.3] JG: Yeah, you really have to measure pipeline and the performance of leads through pipeline and hold that in juxtaposition against some lead volume. If you produce half as many leads where they ultimately convert at three times the rate, you’re winning.

[0:14:23.9] DG: Yes. I think that’s the math. I’m actually really grateful, and of all the different things that I’ve seen in my career come through B2B demand gen, I think account-based marketing is one of the most profound. I think it really helps people understand that not every lead has equal value, because not every company has equal value. Maybe we ought to put a more concentrated effort on the few and not on the many.

That doesn’t mean you ignore, because sometimes it’s hard to know exactly, no matter how good your targeting is, but I would use search engine optimization and things like that to try to find the people that are outliers and let them find you, rather than wasting huge media dollars on it.

[0:15:07.6] JG: I think waste is the key word there. If you’re approaching the market with any top-of-funnel, general segmentation that’s available to the mass market, there’s probably 10%, 20%, 30% of waste in that. Just figuring out how to target more efficiently at the top of the funnel will free up a lot more marketing dollars to do things that really matter, like move people through the funnel. It’s a fundamentally broken concept, and hopefully, we’re engineering the solution that’s going to be able to help people.

How Better B2B Targeting Makes Everyone Happier 

[0:15:40.3] DG: We absolutely want to start a movement. If you have the same belief, we’d love for you to help share the message with everybody. I really want to see CMOs and marketing VPs and budget owner types rethink their commitments to volume and start thinking much more clearly about quality. I think everybody will be happier. Sales will be happier, your team will be happier, and you won’t waste so much money. It’s like the old saying where the marketing executive says, “I know I’m wasting half of the money, just not sure which half.” I think a lot of people fall into that bucket, unfortunately.

[0:16:22.5] JG: Yup, I agree. That’s the core issue, just understanding what you’re doing and being able to measure it. Then, if you can move the needle to the top of funnel and draw that box a little better, it just makes it easier for everybody in the long run. 

I think that’s my parting thought. I don’t have much more. It’s a fairly well-defined problem. I think, up until now, there really hasn’t been a solution. Now we’re starting to see some in the market. Certainly, LeadCrunch has a solution that we’d love for you to take a look at. That’s pretty much my thoughts on the subject. Do you have anything further to enlighten us with?

[0:16:58.4] DG: I don’t, unfortunately. I’m actually all done, man. Thanks so much for having me on the show.

[0:17:03.3] JG: Oh, no worries man. Thank you to all of you. Please go ahead and click through and view our Solutions page. There’s a link down there in the description. We’d love to have a conversation with you about your business, see what you’re up to, what you’re doing, how we can help. Maybe we can, maybe we can’t, maybe it’s a fit, maybe it’s not. I don’t know. If not, maybe we’ll just grab a margarita at the next trade show or whatever, but it’ll still be great to hear your voice, to see your face.

This has been another fantastic, wonderful, life-changing episode of the Green & Greene Show.

[0:17:36.6] DG: Oh, I do have one thing.

[0:17:38.4] JG: Okay.

[0:17:39.4] DG: We will both be at the Sirius Decision Summit and we would love to meet you and say hello and talk to you if you happen to be there.

[0:17:48.7] JG: Yeah, that would be wonderful. Always love people buying you drinks and such.

[0:17:55.9] DG: All right, very good. Thanks Jonathan.

[0:17:57.6] JG: It’s been unreal. ‘Til next time.

[0:17:59.8] DG: Peace and love.

[END OF EPISODE]

[0:18:00.8] ANNOUNCER: Thank you for tuning in to the Green & Greene Show by LeadCrunch. Green & Greene think differently about B2B and want to start a movement to transform demand gen. If you have ideas for topics or would like to be a guest, send an e-mail to david.green@leadcrunch.ai. If you’d like to find more customers, visit our website to talk to one of our demand gen guides, www.leadcrunch.com.

[END]