In B2B Lead Conversion, B2B Lead Generation, Industrial Marketing, Lead Conversion
0

Marketing Qualified Leads (MQLs) on the decline?

There is a lot of discussion right now around the fallacy of Marketing Qualified Leads (MQLs) and their intrinsic value to an organization. Plenty of marketing agencies built around paid ads/paid social (demand generation) are touting the death of MQLs. For B2B/Industrial manufacturers, driving MQL campaigns is becoming more difficult because the consumer buying journey has shifted dramatically.

It’s fairly common knowledge that most MQL campaigns:

  • generate only low-intent, high-volume “leads” that rarely translate to revenue
  • require extensive “nurturing” and outbound activity to extract possible deals
  • are not tied to revenue and thus are a poor measure of marketing’s value

If MQLs are reaching the end of their useful life, what will modern marketers need to do differently to help companies grow in this new environment?

A new approach must:

  • capture high-intent prospects that self-qualify via their own research
  • create a high-interest level to compel interested prospects to engage with sales
  • help marketers measure a prospect’s true value based on the actual value of their products/services

We’ve dubbed the new definition Revenue Qualified Leads.

Revenue Qualified Leads

Revenue Qualified Leads are different. They represent serious potential customers AND THE POTENTIAL SALES VALUE of that customer.

For example, if a marketer tried to measure the value of an MQL, they would probably come up with an arbitrary dollar amount, i.e., “100 white paper downloads usually equates to 1 customer that buys $100,000 of product so a white paper download is worth $1,000”. This, of course, is totally preposterous but it is the disconnect of the offer that generated the lead (the whitepaper) from any semblance of revenue.

A Revenue Qualified Lead, on the other hand, is DIRECTLY related to the revenue potential. Say a prospect is captured using a system that allows them to “Request a Quote” using actual products and prices. If the prospect selects an items that has a List price of $100,000, then the Revenue Qualified Lead value is $100,000. It doesn’t mean that the deal will necessarily close, it simply means we now have a direct correlation between a lead being generated by marketing and revenue.

Twelve years of proof

Does this model work in the real world? Absolutely.

Since starting EchoQuote in 2008, we’ve observed almost 100% of the time that marketing teams using a Revenue Qualified Lead approach are capturing 5-10x gross sales in potential lead value.

Take Texas Memory Systems (acquired by IBM) for example. They sold high-end commercial equipment that ranged in price from $50,000 to $500,000. Before converting to a Revenue Qualified Lead method, they simply counted the number of leads generated and used that to measure Marketing’s success. They routinely only captured about 20 “leads” per month with no indication of value.

With the introduction of RQLs, they were able to significantly increase the lead count AND prove that they were capturing $80 Million per month in potential value. This translated to almost $1 Billion in RQL value per year. Compare that to the actual annual sales of around $100 Million and you get a 10x multiple; Marketing was generating 10 times gross sales in RQL value. That enabled the VP of Marketing to get future marketing budgets approved much easier.

Summary

Marketing Qualified Leads (MQL) have always been difficult to define and prove their value. Weak conversion offers like whitepapers have contributed to the negative results most companies see from their marketing efforts. With new services available that can capture high-intent, “Revenue Qualified Leads”, companies are now able to more accurately measure their Marketing department’s value to the organization and plan future marketing expenditures with more certainty.