The CRM “lead” conundrum: Why did they have to get it so wrong and cause so many problems?

Posted by Bruce Brien on 5/27/20 1:30 PM
Bruce Brien
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lead-conondrumI am talking about the word “lead” with regard to marketing and CRM systems. We have gotten it completely wrong for decades, and it has caused a great deal of problems and unnecessary expense for many organizations. 

The original concept, as used by journalists, police departments and sales organizations (before marketing), was correct. A lead represented an actionable piece of information worthy of follow-up. It did not mean a person!

When someone said “I’ve got a lead,” it did not necessarily mean "There is one person I need to follow up with." It was never meant to be so confining. Even in sales, you might hear that 3M is looking for logistics software, so without the help of marketing, you would start calling into 3M, trying to find all of the people who might have anything to do with managing the logistics process. You might even call in to IT to see what they could tell you, as well. That “lead,” even to sales, implied a group dynamic before marketing usurped the definition as a “person” because the “system” said so.

The whole “a lead is a person” thing is a construct of CRM systems treating a lead like a contact but not actually having it be a contact unless it already was a contact. You can see that, in one sentence, it gets confusing. So, we started putting lead statuses on contact records if they already existed and filing patents for “repeat responses” so we could capture multiple leads for one person. Research firms like Forrester SiriusDecisions are jumping through incredibly complex and academic hoops to explain demand in an account-based marketing (ABM) environment, creating new vocabulary and jargon around words like “demand unit” and “buying groups.”

I sometimes wonder if this wasn’t all done so that we (marketers) would all need help from the “experts” in order to get anything accomplished: millions of dollars in consulting to explain abstract academic concepts and millions more to correct for defects in the underlying plumbing in our CRM systems to accommodate a simple term like “lead” whose original definition is all we ever needed!

Let’s think this through in terms of what we already had in our CRM systems before “leads":

  • What is it that we hope leads convert into? Opportunities!
  • Are opportunities people? No.
  • Do they have contacts associated with them? Yes!
  • Can a contact be associated with more than one opportunity? Yes!
  • Can a contact play a different role on different opportunities? Yes!
  • Can there be more than one contact, more than one role and more than one contact per role on an opportunity? Yes!
  • Can we merge two opportunities into one, aggregating the history and activity when we realize that they are the same? Yes!

Isn’t this exactly how we needed “leads” to behave? Of course it is! So why wasn’t it built that way?

The only difference between a lead and an opportunity is that the lead is generally owned by marketing and the opportunity is generally owned by sales. So why didn’t we make leads (from a data perspective) just like opportunities? Contacts would be related to leads, and there could be more than one (a buying group!). Contacts could have roles within leads that differ from lead to lead and could exist on more than one lead at a time, seamlessly. We would not need demand units and leads just leads. We would be able to merge them and connect their activity (responses) into a single forensic stream (remember digital footprints?).

Even reporting would be simplified. Contacts might have dozens of responses through their campaign membership related to several leads that convert to a few opportunities, some of which are their own and others where they are participants in a larger process.

lead-hive9A simplified data model

Even under an ABM umbrella, we live in a hybrid world. You might sell enterprise software to large organizations (pure ABM!), but in your post-sale engagements, it is probably common for an individual customer to contact you to purchase some training that does not require a committee or to add on six more users without a dozen signatures authorizing the purchase.

Due to CRM system design decisions made over two decades ago, we have been forced to live in a world that is much more complex than it needs to be, and whole industries have been built around it. Models and frameworks, advice, consulting, custom software development and now, even patent filings, all support an incorrect data model that never should have existed.

At Hive9, we have to spend a lot of our time assisting organizations with taxonomies, definitions and process design, as well as making system recommendations for their martech stack just so that they can accurately report lead progression from first impression to revenue. This is really important for organizations that really want to embrace marketing performance management (MPM). In order to do so, you have to get the planning right, the funding and expense management right, and the execution and reporting right, and then pull it all back together in the context of your plans and goals. It is performance in the context of a plan that yields meaningful, actionable results for organizations and that can’t happen without a working lead progression process in your CRM system.

We are here to help with our MPM solution and our services, whether you are just starting out, fixing antiquated processes, migrating from old, on-premise systems, or simply getting ready to digitally transform your MPM function.

Contact us with any questions or request a free Hive9 demo!

Topics: Marketing Planning, Buyer's journey, Marketers, Marketing Technology, Marketing Insights, marketing measurement, marketing data, B2B, marketing strategy

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