When you work primarily with high-tech clients, you learn to cope with a great deal of short-term thinking. Tech companies have short-term horizons for a number of reasons:
* Many are private and depend on short term results to prove viability and therefore ensure their ongoing funding
* Many are competing in early stage markets and need to get in front of their competitors quickly before consolidation and attrition take their toll
* Technology changes rapidly, and tech companies often have windows of opportunity to realize revenue from products or services before they become obsolete.
Inevitably, this short-term outlook trickles down to a company’s demand generation strategy. I talk regularly to marketing execs who feel they don’t have the luxury to build a customer base over the long term, so instead of cultivating and nurturing prospects, they focus instead on sales-driven, tactical marketing programs designed to seek out “hot leads”.
The problem is that programs designed exclusively to uncover highly qualified leads in a very short time frame tend to be 1) challenging and 2) expensive. Here’s why:
* Many tech products are first of breed solutions and/or of a complexity that demands a more long-term, consultative selling process. Prospects may simply not be ready to engage with sales because either 1) they don’t know such a solution exists, or 2) they may not be aware they have the problem in the first place.
* Focusing on only the most qualified prospects leaves many potential (albeit, more long term) deals on the table. A potential customer might have precisely the problem that a particular product or service solves and are anxious to solve that problem, yet may not feel as though they’re ready to buy and so fail to respond to the campaign.
* Similarly, even if less qualified prospects do respond to the campaign, they’ll likely be ignored by sales reps focused exclusively on meeting a monthly or quarterly quota and who therefore don’t want to spend the time cultivating more long-term opportunities.
* Response rates from tactical, sales-driven campaigns are likely to be lower (because they only attract highly qualified, late stage leads), so companies need to spend more money to generate relatively few opportunities.
* Lastly, because the campaigns weed out all but those prospects in active purchase mode, it leaves the sales pipeline empty once those deals have been either closed or lost. This requires a constant re-loading of the sales funnel with new, expensive leads.
Look, I get it. I understand that your CEO, the board, and your VCs want results, and they want them now. Or that you need to fill the pipeline with qualified opportunities quickly, so that your sales team can close that business before year-end. But here’s the reality: most demand generation is a long-term process. And you’ll generate more qualified leads, at a lower cost, if you adopt a longer-term approach.
An effective demand generation strategy is one that not only captures hot sales leads but also maximizes the value of more long-term prospects. Such a strategy requires:
* Casting a wider net to include those prospects who meet your demographic criteria (right person at right company) but who may not be in active purchase mode
* Building a marketing database of both short- and long-term prospects that at minimum meet specific demographic or target account criteria
* Focusing campaigns, content, and resources on BOTH generating net new leads but also nurturing existing prospects
Over time, such a long-term approach reduces the demand for expensive, tactical campaigns because more and more qualified leads will be generated through lead nurturing, from prospects that have been educated, cultivated, and are finally ready to engage with sales.
Adapted from the Spear white paper: “Lead Recycling: A More Cost-Effective Approach to Demand Generation for High-Technology Companies”.