First published in 1841, Extraordinary Popular Delusions and the Madness of Crowds is a history of folly by Scottish journalist Charles Mackay. The book chronicles what Mackay called “National Delusions,” “Peculiar Follies,” and “Philosophical Delusions.” Despite its rather sensational style, the book has enjoyed academic support as a work of considerable importance in the history of social psychology and psychopathology.
Subjects in the book included economic bubbles, the crusades, witch-hunts, and the influence the shape of hair and beard had on politics and religion in different times. Present-day writers on economics, including Andrew Tobias, laud the three chapters on economic bubbles.
“I think there is a world market for maybe five computers.”
(Thomas Watson, chairman of IBM, 1943)
“There is no reason anyone would want a computer in their home.”
(Ken Olson, president, chairman and founder of Digital Equipment Corp., 1977)
“640K ought to be enough for anybody.”
(Bill Gates, 1981)
“$100 million dollars is way too much to pay for Microsoft.”
Today, there are more follies and delusions to talk about than there were in 1841. But in this short article, we have time to talk about one: inbound vs. outbound marketing.
Our experience is that companies kill the golden goose by focusing too much time and money on inbound marketing campaigns and not enough time and money on outbound marketing and nurture campaigns.
Remarkably, with the exception of inbound lead rates in 2010, the lead and qualified rates for inbound and outbound are very close from 2010 to 2012. (In 2010, one of our clients drove a substantial number of inbound inquiries—increasing to 40% our completed dispositions from inbound sources as compared to 22% and 11% respectively in 2011 and 2012.)
In the end, lead rates are meaningless unless you convert those rates to sales qualified lead rates:
Most marketers complain that sales reps do not follow up on leads and do not provide specific feedback. Sales reps have this to say about marketing leads: “The leads stink.” Marketing is measured on the number of leads and the cost per lead. Sales is measured on revenue. Client #1 refuses to give up on content aggregator leads because two-thirds of the leads they generate are from that source. Sales reps, in this company, dismiss all marketing leads because they are not going to rummage through 3,117 raw leads to find 40 real leads.
The other challenge with inbound leads is they tend to drive smaller deals with lower level decision-makers as compared to targeted, proactive outbound lead qualification and nurturing programs because more senior executives are not as apt to exhibit the digital body language required to categorize opportunities from inbound marketing—leaving the best, most strategic and most profitable deals for those companies that don’t wait for a prospect to reach out to them.
Don’t just compare your own lead and qualified rates to PointClear’s experience. Measure the actual, fully loaded, cost-per-sales qualified lead by source and measure it over a period of time. In my book The Truth About Leads, I ask the question, “How much should a lead cost?” The answer is, probably more than you think, but probably a lot less than you are paying.