What you need to know:

• B2B businesses – from the top down – have been hardwired to focus on measuring leads and conversions.
• Kerry Cunningham, a former Forrester Principal Analyst now at US-based 6Sense says that’s why companies struggle for growth. “If you’re trying to understand who’s interested in your solutions, and you’re just looking at leads, you have to be missing almost the entire picture,” he says.
• His firm’s research, across 900 cross-category B2B buyers, finds that most B2B buyers have largely made up their minds before their leads even show up.
• They are typically eight months into the process and will have considered four potential brands – but 83 per cent of the time they will initiate contact with the seller they have in mind, and 84 per cent of the time that seller goes on to win the business. Which means everybody else only has a 16 per cent chance of winning it – at best.
• Which is the crux of why the traditional focus on lead and conversion is delivering feeble returns: Sellers, too focused on individual leads, have already missed the boat. Which means they need to get to the buyers much earlier in the process – and crucially, all of those buyers collectively involved in the decision.
• Specialist B2B marketing agency Green Hat is now replicating the research in APAC – and it’s drawing the same conclusions, per CEO Andrew Haussegger.
• He says very few companies have fully grasped the need to rethink both lead gen strategies and incentives for sales development reps that in some cases have been “binning” leads because they are not from a new potential customer.
• “What this research really says is that traditional lead metrics are outdated, especially in complex buying scenarios,” says ABB Process Industries’ Global Head of Marketing, Jo Woo.
• “We’ve done it to ourselves – as marketers we’ve created this obsession with counting leads. But the reality is not all leads are created equal,” says Woo. “We need to really move away from counting leads to measuring influence – and it is influence that ultimately drives conversion and ultimately drives revenue.”

Firing blanks

Kerry Cunningham, a former Forrester Principal Analyst now at US-based 6Sense, spent years trying to work out why B2B lead gen was largely firing blanks when it came to conversion. After a while, he says, “you’re kind of beating your head against a brick wall. You can get people to improve from 1 per cent to 2 per cent – or maybe 2 per cent to 3 per cent – lead to revenue conversion. But you can’t really do better than that, no matter what anybody does.”

At that point, says Cunningham, “you have to ask if you’re trying to solve the wrong problem.” So he and his team took a step back and looked at the data in a different way.

“The aha moment was when we saw time after time that when an organisation is going to have an opportunity go to pipeline from any given account, there will be multiple leads from that account prior to the time that opportunity happens.”

Then came an even bigger aha moment.

“We realised that 97 per cent of web traffic in B2B is anonymous. Almost all of the people who come to your website remain anonymous … What that immediately tells you is if you’re trying to understand who’s interested in your solutions, and you’re just looking at leads, you have to be missing almost the entire picture – and that has proved to be the case,” says Cunningham.

“If you want to understand who’s interested in your stuff, first thing to look at is do you have multiple leads? Because if you do, focus on those accounts.”

Next, he says, is try to build a picture of which accounts are hiding inside that anonymous web traffic, or what 6Sense calls the ‘dark funnel’ (and which it claims it can help crack using AI). Otherwise, “How can you possibly be seeing the full picture and optimising the output from that? So that hit us like a tonne of bricks back in 2017. We completely changed the series of decisions in the waterfall to orient around buying groups, and we’ve been talking about it to anybody who will listen ever since.”

Go broader

According to 6Sense’s research – spanning 900 B2B buyers across categories – buyers are largely making up their minds well before a potential seller is even aware of their interest. They are typically eight months into the process and will have considered four potential brands – but 83 per cent of the time they will initiate contact with the seller they have in mind, and 84 per cent of the time that seller goes on to win the business. Which means everybody else only has a 16 per cent chance of winning it – at best.

Which is the crux of why the traditional focus on lead and conversion is delivering feeble returns: Sellers have already missed the boat. Which means they need to get to the buyers much earlier in the process – and crucially, all of those buyers collectively involved in the decision.

That means going broader – and ditching the obsession with marketing qualified leads (MQLs), says Andrew Haussegger, CEO of specialist B2B marketing agency Green Hat, which is now running the same research across APAC in conjunction with 6Sense. Haussegger says the data gathered so far is showing much the same thing.

An MQL, he says, is just one individual. “And that is the problem, because it doesn’t represent anywhere near the whole picture.”

He says the practice of locking content behind a gate in order to generate those leads is therefore counterproductive.

“We almost need to run a ‘free the content’ campaign … There are still a lot of forms in front of content – because it can generate the MQL that marketing is measured on. But it is not freeing up the content so that the buying parties can consume it to help them make a decision, or favour your organisation over others when they are going through their evaluation process.”

Hence, while 6Sense’s Cunningham is trying to enable a B2B marketing ‘renaissance period’, Haussegger says APAC remains “in the dark ages … there is work to do in this region”.

Outdated metrics

“What this research really says is that traditional lead metrics are outdated, especially in complex buying scenarios,” says ABB Process Industries’ Global Head of Marketing, Jo Woo.

“What this really tells me is we need to focus our resources on influencing buying groups, rather than an obsession with individual lead generation,” she says.

“We’ve done it to ourselves – as marketers we’ve created this obsession with counting leads. But the reality is not all leads are created equal, as we’ve seen from this research. We need to really move away from counting leads to measuring influence – and it is influence that ultimately drives conversion and ultimately drives revenue,” adds Woo.

“Part of the reason why there has been an obsession with leads is that it’s measurable. It’s easy to show from a funnel perspective, ‘Look how much we’re driving success and performing … [we have generated] thousands of marketing qualified leads and hundreds of sales qualified leads, and we’re continuing to grow it year on year’.

“But the reality is then when it comes back to conversion, it’s one or two per cent. Sometimes it is not even tracked. But hey, let’s look at this flashing light at the bottom of the funnel!”

Woo says flipping the model means aligning marketing, sales and top management on what’s going to move the needle – and then work to pick out the signals from the noise. She thinks the 6Sense research is a start point for that conversation – and then B2B firms must acknowledge that there is another way of doing things.

“Right now we’ve got so much noise, and we measure the noise, and we’re happy with the noise. But it’s the signal that we need to get to – and that takes a lot more sophistication.”

Added bonus

Flipping the model also requires a realignment of sales incentives. Green Hat’s Haussegger says some firms are grasping that particular nettle, citing an Australian tech company by way of example.

“They have sales development reps, or SDRs. They are the people who take the lead, do some work on it and then pass it on to the field sales people. The SDR sales people would be paid on getting a qualified lead – an individual – and passing it on. But if there was another lead from the same organisation, they got no more compensation for them. So that went in the bin.”

But as the firm moved into account-based marketing (ABM, which essentially treats each target client as a ‘market of one’ and aims to identify all the key decision-makers within that client before they come to market proper) the question started to be asked: “Why aren’t we getting more of the more of the buying party – more of the people involved in the deal – that we can pass through?” says Haussegger. Long story short, the lead gen sales incentive was changed, and the SDRs got more money when they found more people from that target business.

Haussegger says those examples are “few and far between” – but he thinks a growing appreciation of account-based marketing, which naturally brings sales and marketing closer together to focus on pipelines and “opportunities, not leads”, will drive more B2B brands to rethink their strategies. “So there is some light at the end of the tunnel. But there is more work to do.”

Overcoming inertia

6Sense’s Cunningham acknowledges moving from traditional lead gen approaches to key account conversion is a “huge shift” that requires both management and investors to question how they have always operated.

“Midsize and smaller companies, [including those] that are venture capital-backed, their board of directors grew up understanding leads and lead conversion. That is all they talk about, all they care about – and they prevent their organisation from moving forward,” says Cunningham.

“In larger organisations, there’s just an awful lot of history behind measuring leads and marketing being measured on the conversions. It’s just really difficult to move those large machines. So that’s what we’re dealing with, that’s what stands in the way of us really moving into this B2B renaissance,” he says. “I think we’re getting there, it just takes it takes time.”

Lead charge

For B2B brands keen to move out of the lead gen dark ages, Cunningham recommends drilling into their existing data.

“Every marketer should get to know their leads data really well – and you can do that without any additional technology. Go and look at your leads data and understand what it looks like. Today, you operate on the assumption that every lead represents a unique selling proposition, a new selling opportunity. That’s very far from the case. You’ll understand for yourself when you look at [your leads data] why that that assumption is wrong,” says Cunningham. “I think that’s the beginning of helping your organisation understand we need to start focusing on things other than the lead.”

ABB Process Industries’ Woo says equally critical is to “look at the leads data together with your sales people. Discuss it, debate it and have this shared goal and shared target in terms of what’s really important that will drive success for the company”.

Then she says B2B firms have to commit and go all-in.

“The insights are quite radical, and instead of shying away and saying ‘well, no, I’m still comfortable in the world of leads’. I think now is the time to just really lean in to this change.”

Green Hat’s Haussegger agrees.

“My advice to CMOs would be to understand the narrative and take the story into the room with the CEO and your revenue leaders – because we live in a sales-led B2B world and this has to shift. We need more alignment.”

See 6Sense’s research here (it’s crisply presented in 1 minute, 3.5 minute and 34 minute versions). The APAC version with Green Hat is due to be published within eight weeks.

There’s more depth and data in the podcast. Listen here.