Changing The Lead

Posted on May 24, 2008 by Tony Uphoff

Economists regularly produce reports that show the bias in demographic samples. For instance the latest statistics show the majority of wealth in the United States, over 71%, is controlled by less than 10% of the US population. The same sort of statistical bias is true in technology purchasing or in the purchase of any expensive, complex and highly differentiated product or service. There is an 80/20 rule where 80% of the purchasing is done by 20% of the customer set.

In technology it used to be simple to identify where this purchasing sweet spot was, as it was concentrated in large companies in technology dependent industry sectors like manufacturing, financial services and government. Today it’s far harder to locate volume buyers as they could be in any sized company and in any industry. Facebook ,as an example, a small to medium business by traditional metrics, is buying over 1,000 servers a month. YouTube is adding technology at a similar pace. The reality is technology has become a have to have for companies of all sizes and across all industry sectors, as our economy makes the shift from analog to digital.

So if volume buyers today aren’t so easy to spot, how do you find them? To a great extent they self indentify based on their information and technology consumption. Simply put, buying and managing technology in business requires up to date information and knowledge. So does this mean that anyone with an interest in technology is a volume buyer? Of course not. Oddly enough however we are living through a phase of marketing that would suggest this is true.

Demand generation has driven much of the growth of online advertising and marketing over the last several years. The efficiency of the web as a platform to drive engagement is astounding and operates like the ultimate direct marketing engine. The challenge is however not all interest suggests customer potential and the vast majority of companies today really aren’t tracking back to any sort of actual ROI or even evaluating media based on demographics. As a case in point a product group at a major software company shared with us recently that they spent over $1 million dollars last year on a demand program with the largest lead gen platform in existence. When their enterprise sales org sifted through the thousands of leads that were generated they found 2 viable prospects.

A few months ago I was brought into a leading advertising agency who represent one of the major technology brands to talk about trends in the industry and online media. The agency took me through an elaborate presentation on the sophisticated online lead weighting system that they were using on behalf of their client. At the end of this truly complex system overview I noted that it appeared that their system valued a college student in a dorm room down the street at NYU and the CIO of a Fortune 1,000 company exactly the same in terms of sales lead value. There was a long pause, some glances around the room and the head of the group said “well I guess in some respects that’s true”.

The reality is the vast majority of online lead gen that we see today is the equivalent of standing on the street corner of a highly trafficked intersection, yelling at cars as they go by and valuing a car honking at you as a lead. To sell technology or any other valuable, complex, product or service you have to find the buyers who have the largest propensity to buy your product or service in the highest volume. It’s about volume buyers

It’s a safe assumption that the marketing world is going to drive a shift from the primary focus on CPL (cost of lead) to QPL (quality of lead). Marketing managers who are being judged simply by the number of leads they generate are going to either drive this shift or be driven. It’s inevitable as the level of sophistication about online as a medium evolves. What do you think? Time for a changing of the lead?,

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