B2B Lead Optimization: Why cheap leads can be so expensive


Everyone wants to improve cost-per-lead, right? And so, it would be logical to assume that the cheaper the lead is to obtain, the lower the cost-per-acquisition, the greater the margin, and the bigger the bonus in your paycheck at the end of the quarter.

Well, at MarketingSherpa B2B Summit 2011 in Boston, Brian Carroll, Executive Director of Applied Research, and Nicolette Dease, Program Manager (both at MECLABS) showed, essentially, that cheap leads can be downright expensive.

I grabbed Brian at the networking event after he spoke and asked him to explain …

The video our A/V Specialist, Luke Thorpe, put together is quite clear, but I wanted to take it one step further and provide an analogy you could use if you have to convince anyone on your team about this paradox …


Of gefilte fish and leads

So stay with me on this one. I was flying up to the B2B Summit in Boston on JetBlue (a giant TV room with wings) and watching a local news show in New York where they brought on Jack Lebewohl of the 2nd Ave Deli to make a recipe. I’m sure you’ve all seen this type of segment on your local news station. He happened to be making gefilte fish, and he made an excellent point.

In case you don’t know, gefilte fish originated among the desperately poor Eastern European Jewish population who wanted to eat fish on Shabbat, the Jewish Sabbath. They basically took a little bit of fish (which was expensive) and threw in a lot of filler (which was cheap).

Jack Lebewohl provided a real “aha” moment for me. This approach has actually now made gefilte fish more expensive. You see, back then, labor was cheaper than the raw materials, so they could spend all day trying to stretch that very valuable fish ingredient (there was no Twitter back then, they had nothing better to do anyway). However, now labor is more expensive than raw materials, raising the overall price of the labor-intensive gefilte fish. Now back to your leads …

A complex sale involves the human touch. The human touch is expensive. So if you take a bunch of cheap, poor-quality leads and waste the valuable time of your sales force, the actual outcome will likely be more expensive. Do the heavy lifting on the front end. Test and optimize to determine where your most valuable leads come from to determine the inflection point where cheap, essentially, becomes quite pricey.

Brian and Nicolette will join us again for the West Coast swing of B2B Summit 2011, in San Francisco, October 24-25. And they will once again be presenting their case study, along with their methodology to optimize your leads and make sure you truly are getting the best return on your investment. Sorry, no gefilte fish recipes, though.


Related Resources:

Optimize your marketing funnel by mapping what works at B2B Summit – San Francisco, October 24-25

Optimize your gefilte fish recipe – Rosh Hashanah cooking on NBC New York

B2B Summit 2011: 5 takeaways on social media, lead generation, building a customer-centric approach, and more

Marketing Funnel: How to optimize your Sales and Marketing funnel in 5 steps

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1 Comment
  1. kenny says

    so true, also it’;s this whole concept of a lead that is still; a major problem. ( Especially when it comes to IT technology buyers)

    They may be on a forum and a vendor discusses a product, problem issue the IT pro is having. He/she then goes to the IT vendors’ website checks out the product. ( does NOT want to download a whitepaper becuase the IT vendor FORCES him/her to registercontact info) Oh god NOT another download a free sales call paper.

    I know what i am going to discuss this with the Vendor in a community. He get’s help and then goes and makes a purchase from CDW.

    SO THIS GUY WAS never a lead CORRECT? Vendors need to get out of this # of leads ( whitepaper downloads etc) and start engaging the IT buyer on their terms and their turf.

    Ironically it’s a lot cheaper.

    However this is still the prevailing attitude ” Kenny I do not have time to talk about sales, I have a lead gen number to hit”. Actual VP of Marketing quote.

    who can blame him. He gets a $$$$$$ bouns at the end of the quarter for hitting some meaningless metric like number of whitepaper leads ( names and e mails address for the sales people to go after)

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