In lead generation, verification is trumping volume.
Jeff McCollum, founder and president of Newport Beach, California-based CAKE, whose software tracks performance marketing campaigns, said the lead generation business has debated quality vs. quantity for years. Now, he said, lead buyers and sellers are getting more serious about quality.
“That’s always been the chicken-and-the-egg game. But I think more people are focused on [quality] now,” McCollum said in an interview at LeadsCon NY. “As an industry, I think we’re all focused on that.”
When LeadsCon launched in 2007, the lead generation industry “needed to make some noise, and oftentimes you make noise by producing volume, by being disruptive,” McCollum said. “Now we don’t need to be disruptive — we need to be productive.”
McCollum said lead generation professionals needed that volume to generate interest within companies and industries that would benefit from sales leads. Today, lead buyers and sellers aren’t as concerned with volume as they are with verification of customer data, he said.
A variety of vendors like LeadID, Forensiq, Neustar and Experian now sell technology that can help buyers and sellers determine whether data about prospects — such as names, addresses and phone numbers — is accurate. In recent years, companies have ramped up development of software that helps separate the good leads from the bad leads.
Lead buyers and sellers have come to the realization that the cost of sifting through bad leads is more painful than the cost of acquiring higher-dollar verified leads, according to McCollum. An IDG study cited by Marketo found that for 61 percent of marketers, generating high-quality leads presents a problem for their organizations.
With the stepped-up emphasis on lead quality, some companies are scaling back on their call centers. McCollum said he talked to one company at LeadsCon that had reduced the headcount at its call center from 100 to 15 as a result of lead verification technology.
“You’re [still] going to get bad data, but I think there’s a lot out there now that you can do to actually ensure that you’re at least getting better data,” McCollum said.
A verified lead comes at a higher price than an unverified lead, but the payoff is worth it because you’re able to better target customers, according to McCollum.
“You’re going to be spending more, but the ROI is going to be greater,” he said. “It’s not just about that initial sale. By understanding your consumer, it’s also about the lifetime value. Now I know who you are — I’m going to sell you additional products as well.”