Top 7 Demand Gen Red Flags (and how B2B marketers should address them)
By: Rachael Ferranti | 1/13/2023
Qualified leads are the lifeblood of any successful performance marketing strategy geared towards driving measurable revenue growth. And as budgets tighten while goals skyrocket, marketers are being asked to meet higher lead targets than ever—often with only their existing resources.
Marketers turn to demand generation, and demand generation providers, as a reliable way to feed pipeline with qualified leads that, with proper nurture and follow up, will result in conversion and won business. In fact, 26% of marketing budgets go to content syndication efforts aimed at driving demand, yet only 36% of marketers are able to consistently measure positive ROI from these programs.
- 26% of marketing budgets go to content syndication programs aimed at generating leads 1
- Only 36% of marketers can demonstrate positive ROI from these programs 2
We connect with marketers every day, from all around the world, frustrated with underperforming leads and non-existent ROI. As marketing dollars become increasingly precious, marketers can’t afford programs that don’t deliver on the promise of real, qualified demand. This guide shares the top 7 red flags for marketers to look out for when receiving leads from a vendor—and how to prevent them from derailing your budget.
1 Marketing Insider Group, 2021—How Much Budget Do You Need for Content Marketing?
2 Technology Content Marketing—2022 Benchmarks, Budgets, and Trends, Content Marketing Institute
Red Flag #1: You provide your vendor with multiple content offers to generate leads against, but only receive activity against one or two
While we all have certain assets that outperform others, it’s unlikely to see no activity against multiple offers. Unless, of course, these assets simply aren’t being circulated. Often, vendors will deceptively accept as much content as you’re willing to provide, but only leverage one or two in their outreach to prospects. The most nefarious don’t leverage your content at all, but instead match a couple of accepted offer titles to a list and pass it off as engagement.
This type of deception has real consequences for marketers paying for engaged leads. It’s important that you know what content your prospects have engaged with to properly nurture and convert them. Additionally, reaching out to decision makers under the impression that they’ve consumed your content when they haven’t can be incredibly damaging to your brand.
If your content engagement report is leaving you scratching your head, dig into how your vendor is distributing your content and capturing engagement. Ask for them to walk you through their syndication process and show you how they verify engagement.
Red Flag #2: You receive the bulk of your leads in the final days of your program
This is a common red flag that signals your provider is not in control of the leads being generated for you. Most likely, the vendor’s data is not rich or abundant enough to fulfill on your quota, so they resort to 3rd-party list buying to meet fulfillment in a pinch and sell you these contacts as engaged, first-party leads.
Not only does this practice put your CRM at risk of ingesting large amounts of questionable data, but this backloaded approach also defeats the purpose of demand generation. Instead of delivering leads as they organically engage in a consistent and timely fashion, bulk lead deliveries overtax the marketing, SDR and sales teams whose responsibility it is to nurture and convert them.
Ask your provider for evenly-paced deliveries at the onset of your campaign to ensure you receive leads as they engage and before they go cold. If your provider can’t commit to even pacing, ask them why not and if they can explain their methodology in greater detail.
Red Flag #3: Your leads have a recant rate of 20% or higher
Revenue teams cringe when they hear “I’ve never heard of you” or “I don’t remember downloading that.” And while some prospects will inevitably drop this line to get out of a sales conversation, having leads regularly recant their engagement is cause for alarm.
Nurturing and calling cold prospects has negative consequences for marketers on both sides of the aisle. From an outsider’s perspective, it’s just bad for your brand to treat leads as if they’re further down your funnel than they truly are. Internally, leads with a high recant rate can drive a wedge between marketing and sales alignment, and cause SDR and sales teams to deprioritize leads they receive from marketing.
To avoid missteps in your nurture process, ask your vendor to provide timestamps of engagement for each lead. Remember, you’re paying for leads that engaged. A cold list of contacts will simply wreck your ROI.
Red Flag #4: You receive too many leads that are either already in your database or are existing customers
One of the main reasons to pay for demand generation services is to acquire net new leads to feed into your CRM and nurture streams. You shouldn’t need a vendor to engage leads that already exist in your CRM or marketing automation data—chances are you’re already doing this yourself.
While some overlap is to be expected, and more for marketers playing in extremely niche markets, a lead delivery loses much of its value if the leads already exist in your own database. Demand gen vendors should be aiming to provide the highest value possible to their clients. If your vendor isn’t automatically requesting a suppression list of accounts from you, or won’t honor one, it’s time to seek value elsewhere.
Red Flag #5: Your leads consistently have a bounce rate of 10% or higher
Bad data is a marketer’s worst enemy, and can have negative effects that ripple through all of your marketing operations. Attempting to nurture invalid email addresses can destroy your domain reputation, making it impossible to reach valid, in-market buyers when you need to.
A high bounce rate is a red flag that your provider can’t stand by the data they’re delivering—most likely because it’s not their own. Unfortunately, many vendors resort to list buying and lack the capabilities to validate and verify the data they sell to you.
To avoid the types of havoc that bad data can wreak, ensure that you are working only with demand gen partners that maintain an ample proprietary data. Ask how they collect and validate their data, how often they refresh their database, and if they can provide proof of digital engagement and timestamps as part of your reporting.
Red Flag #6: The first 100 leads are higher in quality than the other 900 combined
Whether you’re paying for ten leads or ten thousand, every lead down to the last one should be qualified against rigorous standards to ensure value and opportunity for conversion. However, a common pain point of demand marketers is that the quality of the leads they receive from vendors is inconsistent at best.
It’s not uncommon for vendors to pull out all the stops and attempt to dazzle their clients with their first few deliveries—buying themselves trust and their client’s good graces—and then quietly meet the remainder of fulfillment with 3rd-party lists that can be invalid and perform poorly.
Remain vigilant throughout your program, and establish performance reviews with your vendor as they progress through your fulfillment to ensure they are not delivering on quantity, but on quality at scale.
Red Flag #7: Your vendor’s demand gen methodology leaves you with more questions than answers
Perhaps the most classic red flag, many vendors are notorious for painting intentionally abstract pictures about how they generate your leads. The reason for this? Simply, many of them can’t defend their methodology.
Transparency has been missing from the demand gen process for so long that most marketers don’t even question their vendor’s methodology. Instead, they accept a vague and ubiquitous data story that has become adopted and normalized by rogue players in the industry—all the way to highest tier.
Marketers are entitled to knowing exactly how their leads are being generated. This means examining every aspect of your provider’s process until you understand the journey that your prospects have taken before you can feel confident adding them to your CRM. Ask where leads will be seeing your content, how their engagement will be qualified, and what sorts of data and insights your provider is able to provide to demonstrate proof of legitimate activity. Time and date stamps, source, and compliance measures should all be part of your vendor’s response.
Protecting yourself (and your budget) from demand gen arbitrage
Demand gen is a crucial part of any B2B revenue team’s path to sustainable growth. Unfortunately, deception and foul play run rampant in the demand gen world, and marketers need to be informed of what to look out for to ensure that the budget they put into acquiring leads yields positive ROI through proper nurture and conversion.
If you’re experiencing any of the red flags we’ve laid out above, it’s time to start scrutinizing the vendors you’re working with so that you can salvage your budget. And if you want to avoid these pitfalls altogether, download our checklist of 5 questions to ask your demand gen provider. This one-pager will not only prepare you with all of the questions you need to ask, but also with the types of answers you should expect from any lead gen vendor that is invested in your success.