Select Page

Get your own copy of Driven every week.

    Library of emails

    Issue 33

    June 7, 2020


    How lead-gen inefficiency leaves your sellers hungry


    In this week’s issue…

    We continue today with the topic of demand generation.

    It’s getting full attention again this week because it’s such a high priority for most B2B SaaS companies.

    Last week’s Driven talked about the inefficiency of conventional lead-gen marketing.

    It’s a problem because only a small percentage of marketing-generated sales leads ever produce revenue.

    Firms routinely waste between 50% and 90% of the money they invest in generating, qualifying, and nurturing leads.

    This week we dig deeper into lead gen and why it’s broken. Next week, we’ll explore ways to fix it.

    The topic is likely to interest progressive marketers, sellers, and chief revenue officers–anyone whose job performance depends on building sales pipe.

    Reading time

    Your reading time this week is about 9 minutes. That’s if you read at 200 words per minute.


    How inbound lead gen leaves sellers feeling hungry

    Have you checked what percentage of your marketing-generated sales leads ever produce revenue?

    If so, I’ll bet you were disturbed to see how low the number is.

    This article explores the conventional lead-gen process and the problems it causes.

    Why it matters now

    Marketing budgets are down. Trade shows and other live events have been canceled or postponed.

    Your events budget is available for reallocation. And you need other ways to fill your sales pipe.

    Nearly every revenue team is looking for novel ways to accomplish more with less.

    Understand the differences between gen and lead gen

    Before getting into the shortcomings of lead gen, let’s consider the differences between it and demand gen.

    Some people use the terms interchangeably. But they’re different in important ways.

    The phrase demand gen implies that you can create demand.

    Unfortunately, it sets a false expectation for people who have never done marketing.

    In fact, no one can create or generate demand for anything.

    Even Steve Jobs didn’t create demand with any of the remarkable Apply technologies he introduced.

    Instead, he channeled desires that already existed.

    Eugene M. Schwartz, a top advertising copywriter from the Mad Men era, said this:

    “Copy cannot create desire for a product. It can only take the hopes, dreams, fears and desires that already exist in the hearts of millions of people, and focus those already-existing desires onto a particular product. 

    “This is the copy writer’s task: not to create this mass desire–but to channel and direct it.” 

    Schwartz wrote ad copy for consumer products in the 1950s and ’60s.

    In the heyday of mass media, he thought in terms of mass markets.

    Yet Schwartz’s insights apply equally to marketing for any audience.

    They’re also appropriate for small niche markets in business-to-business (B2B) Saas.

    Schwartz says demand generation consists of 2 key elements:

    • Identify what people already want.
    • Direct their pre-existing desires toward the products or services you sell.

    Lead gen identifies specific sales opportunities

    Lead generation has a narrower focus than demand gen.

    It identifies specific individuals or companies you can turn into sales opportunities.

    Lead gen uses such tactics as content marketing, inbound marketing, advertising, direct mail, email, social media, and trade shows or other events.

    How lead gen typically works today

    HubSpot popularized today’s dominant approach to inbound lead generation. The company, founded in 2005, prescribes roughly this method:

    1. You identify your target audiences.

    You create buyer personas for them. The buyer personas describe what they want and how they buy.

    2. You create content that interests your audiences.

    The prime purpose of your content is to generate sales leads. Your goal is to attract people to engage in sales conversations.

    You create most of your content to bring new leads into the top of your funnel.

    You also create content for leads at the middle and bottom of your funnel.

    3. You make your content available in formats your audiences like.

    You publish content as white papers, ebooks, research reports, infographics, customer case studies, videos, podcasts, webinars, and more.

    4. You help your target audiences find your content.

    You promote and distribute your content through channels your prospects prefer.

    You use a mix of organic search optimization (SEO), paid search (pay-per-click advertising), and social media.

    Maybe you also use paid content syndication.

    5. Your content contains a call to action that invites people to visit a landing page or a “squeeze page.”

    The squeeze page requires them to provide their email address and other information in exchange for access to more content.

    5. You consider each request for information a potential “lead.”

    The leads go into your marketing automation system, your customer relationship management (CRM) system, and your sales outreach system.

    6. Sales development reps (SDRs) or business-development reps (BDRs) qualify inbound leads.

    They put each lead into a pre-determined cadence of automated touch points.

    Sales-engagement software helps them execute the cadences over a set period.

    7. When a lead meets enough scoring criteria to be a Marketing Qualified Lead (MQL), you pass it to sales.

    Lead-gen marketers measure their performance by the number of MQLs they produce. So they focus on producing MQLs. They don’t care how good the leads are how much revenue they produce.

    8. If a lead doesn’t qualify as an MQL, marketing puts it into a follow-up process.

    A marketing automation system periodically sends “nurturing” information through email.

    (Many companies do this poorly.)

    9. If the MQL fits the seller’s qualification criteria, it becomes a Sales Qualified Lead (SQL).

    The seller may develop the SQL into a qualified opportunity.

    At that point, a seller adds it to the sales pipe. The seller also adds a revenue forecast and timeline for closing.

    10. A seller closes or loses the deal.

    After an MQL goes to sales, lead-gen marketers disengage.

    They may not know whether it ever produces revenue.

    Why this kind of lead gen is ineffective

    With this kind of lead gen, you cast your net wide.

    The net pulls in a lot of “shrimp” that will never become customers.

    Most of what you get are not “leads.” They’re just contact names and email addresses.

    You collect email addresses for university professors, students, consultants, job seekers, sellers for would-be vendors, and many other random people who aren’t good prospects.

    You have to sift through them anyway.

    The people who fit your ICP may never read your ebooks and white papers. Your content may go on their hard drive, unread.

    You have few ways to know how much of your content they consume.

    SDRs and sellers waste time

    You delegate the tedious work of lead qualification to hapless SDRs. Most SDRs hate the work and soon burn out.

    Turnover of SDRs is high. You must keep hiring and onboarding fresh ones.

    If you pass too many low-value leads to sellers, they get frustrated.

    They waste too much time chasing “leads” who aren’t interested. They stop calling the leads.

    Sellers blame marketers for being clueless. Marketers blame sellers for not doing their job.

    Prospects hate being bothered

    Your prospects hate being badgered. Most want to talk to a seller only when they’re ready.

    Pushy tactics damage their perception of your company.

    This is a problem especially for high-ACV sales, because you have relatively few prospects.

    And they must trust you before they’ll buy from you.

    You can’t afford to burn any bridges.

    When lead gen doesn’t work, sales and marketing blame each other

    Sales and marketing become hostile toward each other.

    Misaligned sales and marketing teams reduce revenue productivity.

    They also damage the customer experience.

    Customer acquisition costs go up

    Because few of the leads marketing generates ever bring in new revenue, customer acquisition cost (CAC) increases.

    A high CAC eats into your company’s profit and reduces its valuation.

    It may take months to see results

    Companies that try inbound lead gen often see that it takes longer than they expected.

    They may not achieve first-page organic search rankings for months–especially in market segments with well-established competitors.

    Sellers supplement lead gen with outbound prospecting

    Many companies want faster, surer revenue growth than inefficient inbound lead gen can produce.

    It’s unlikely that even the best marketing can contribute enough pipeline to achieve their revenue numbers.

    In top-performing companies, marketing contributes in the range of 50% to 65% of sales pipe. So sellers, partners, and current customers must fill the rest of the pipe that marketing doesn’t.

    Outbound prospecting is likely to be strongest in companies with a dominant sales culture and relatively weak marketing.

    It’s also common in companies where private equity or venture capital investors push for faster growth.

    Account-based marketing may offer a good alternative

    Account-based marketing (ABM) is a misnomer. It’s little more than marketing-assisted outbound prospecting.

    ABM requires almost equal involvement of sellers and marketers.

    If conventional lead-gen marketing is like fishing with a net, AMB is like spear fishing.

    Its goal is to facilitate sales engagement in a narrow list of targeted accounts.

    Marketing gets “credit” only for helping sellers engage in those accounts.

    ABM can solve many of the problems of lead gen, but many companies are slow to adopt it.

    It requires a different mindset, specific marketing skills, and new performance metrics.

    It also requires close cooperation between sales and marketing.

    Brand-led demand generation offers key advantages

    Finally, we come to a demand-gen approach that’s so new it doesn’t have an established name. I call it brand-led demand gen.

    Its proponents say it’s much more efficient and effective than conventional lead gen.

    Companies see results faster, and their CAC is lower.

    Marketers and SDRs like it because it gets them off the “lead-gen hamster wheel.”

    Sellers like it because they get better leads that close faster.

    The relationship between sellers and marketers improves.

    The customer buying experience is better.

    Brand-led demand gen may be a better fit than ABM for some small SaaS companies.

    We’re out of time and space for this week, so I’ll explain next week how brand-led demand gen works.


    Breakthrough Advertising. Eugene M. Schwartz. 1966 and 2004. [The 2004 edition is published by Bottom Line Books.  It’s insanely expensive, at about $125 a copy.]


    I can’t close this week’s issue without mentioning the traumatic U.S. news of last week.

    George Floyd in Minneapolis. Ahmaud Arbery in Brunswick, Georgia. Breonna Taylor in Louisville, Kentucky.

    All were African-Americans killed by whites.

    Recordings showed that all died from unjustified use of force.

    If it weren’t for the recordings, the killers would probably go free.

    What actions do you favor to fight systemic racism and bias?

    What commitments have you or your company made to help?

    Please share your thoughts with me by email. I’ll publish them next week for other Driven readers.

    That’s it for now.

    See you next Saturday, June 13.

    Have a great week.


    Dave Vranicar


    Driven is a free weekly email for hyper-busy revenue leaders in business-to-business SaaS companies.

    Its goal is to keep you informed about a broad range of topics related to revenue growth.

    We scan the horizon for insights and ideas from sources you may otherwise miss.

    You can receive your own copy of Driven at no charge by sharing your email address here.

    About links, endorsements, and recommendations

    When I provide links to articles from vendors, it does not imply an endorsement of their products or services. I link to them because they offer good content.

    I’ll make it clear when I’m recommending a product or service. 

    © 2020. SilverStream LLC. All rights reserved.