Last week I professed my love for only using contacts and accounts in CRM (and my disdain for using leads). It’s the right approach for B2B SaaS companies to take and it brings with it tremendous benefits (especially for those that are taking an ABM approach). But, to be fair, taking this approach isn’t 100% amazing with no drawbacks. It’s more like 92% amazing and 8% (mini) challenges you need to think through.
Here are the challenges in standardizing on contacts and accounts (and kicking the use of leads to the curb). Broadly they fit into two categories: data and process. Data is focused on how an organization manages and structures its CRM data and process is focused on how people use and interact with a CRM.
Data: Accounts – Challenges in Not Using Leads
Duplicates and errant accounts. When you stop using leads and just use contacts and accounts, more accounts are created in the CRM. That just makes sense. What’s often glossed over is that this means more duplicate and errant accounts are created, too. Duplicate and errant accounts impact marketing and sales reporting, and make it more difficult to actually work within the CRM (e.g. a sales rep needs to figure out which account to place a contact under or a report displays an inflated number of targeted accounts).
Account creation. How companies are reflected and managed in a CRM system is a pedantic conversation that is painfully boring to have, but it’s also an important definition that needs to be agreed upon. As an example, for larger organizations will they be represented in the CRM as one account or will one account be created for each of the company’s divisions or geographies, or the like?
You might ask why would you ever do this. It frequently happens when there are different sales targets or sales resources associated with different parts of the same company. It can go down to the individual site or building level too. Also, what if a company is simultaneously a partner and customer? Do you still use only one account in the CRM or is it reflected as two? The point is the definition and management of account hierarchy has always been a pain in the butt for every company I’ve ever spoken with. Pushing account creation MUCH earlier in the cycle significantly increases the frequency that this decision comes up.
Integration.You might be wondering why I reference “leads” here especially as this post is about the challenges of going without leads. The problem is you really can’t escape from leads entirely as most of the marketing and sales applications that are integrated with CRMs (and their own online registration forms) pretty much all create leads in the CRM and not contacts associated with accounts. This is because the CRM doesn’t know which account to associate a new person with (if the account exists in the CRM) and if the account doesn’t exist in the CRM, if you would want to create the account.
Time to convert. There needs to be a process for converting net new leads into contacts associated with an account. This can eat up a lot of time. As an example, let’s say you’re a small company that generates 200 form submissions a week and of those, 150 are from new people. Forgetting about data enrichment, etc. let’s estimate that it takes 20 seconds per lead to convert into a contact that’s associated to an account. That’s 50 minutes a week and 43 hours a year… and it’s a time commitment that scales with your company. When you’re generating 4x the number of leads you’re generating now, it’s 4x the time commitment.
Lag time. There is also the lag time between when the lead is created in the CRM (remember most of your integrations create leads and not contacts) and when it is converted. The question you need to address is do you send net new prospects to tele while they are still in the leads object or do you introduce a delay until they are contacts? Especially for “contact me now” forms, etc. you don’t want to delay follow-up, but is it realistic that you can guarantee that the lead will be converted to a contact associated to an account in a rapid timeframe?
*Note: There are vendors that automate lead to account matching and the whole conversion process that I’ll speak about next week. So, this is definitely an issue, but the time commitment and lag time can be addressed through technology.
Data: People and accounts that just don’t belong – Challenges in Not Using Leads
Not everyone belongs. There are some people that come in from marketing activities that are just riff raff. I’ve also heard them referred to as “the chaff” (i.e. separate the wheat from the chaff, [you want the wheat]). The chaff primarily comes in four flavors:
- No idea of the company. People for whom you’re unable to identify their company. As an example, this could be an email sent to [email protected] from a personal email address or an online registration form where the person entered a personal email address and didn’t list their company name.
- When pigs fly we will sell to them. People that are from companies that are well outside your target universe. As an example, if your company only sells to large software and high-tech companies, this could be a person that works for a ten-person consulting firm that only works with nonprofits.
- The ones that just give you pause. People that come in that look dubious. This is the person that fills out an online registration from and works for a company you’ve never heard of from Malaysia, Iran, Angola, or the like, with a website that looks like it was made in the 90s and is 100% not in English.
- Spam. Obviously erroneous, fake people. For example, Name: Donald Duck, Title: dslaijfl## !!, Company: #@$#@44, Email: [email protected]
So, this begs the question, what do you do with them? Do you create contacts and accounts?
Process – Challenges in Not Using Leads
Findability. Think about it, you’re an account rep and realistically you care about four or five people at each of your accounts. These are your primary go-to people, the people that you engage with every month, and you really don’t care about anyone else in the account. Now keep that mindset and think about going to an account page where there are dozens of contacts present (or more) with no ability to surface out those that you actually care about. How does that make you feel? Personally, I’d be heated, annoyed, and I’m pretty sure the marketing or sales ops manager (and everyone else too) would know exactly how I felt about it. Why would I be heated? Because standardizing contacts and accounts (if done in a haphazard manner) can make using the CRM much, much harder because key contacts get buried in with dozens of contacts that you frankly just don’t need to care about.
Legacy leads mentality. There is also a generational gap in that “old school” sales and marketing executives and operations teams can be resistant to change. They can be quite comfortable in their approach to lead management and measurement and reporting they have honed through the years. Removing the use of leads changes all of that and heavily alters their workflow.
If there are other major challenges you’ve experienced (or believe would happen) in removing the use of leads and taking a contacts and accounts approach to CRM let me (and everyone who reads this blog know).
Next week, I’ll talk about how to actually mechanize a contact-only CRM strategy, our recommendations on how to address these challenges, and the steps to take if you’re (sadly) heavily reliant on leads.
Prior to co-founding Capstone Insights, Jay led SiriusDecisions’ Technology and Services practice, where he oversaw SiriusDecisions’marketing and sales technology and service coverage. He also launched and chaired the SiriusDecisions Technology Exchange (TechX). He is a widely regarded expert on marketing automation technologies, and how to rationalize an ever-growing martech stack into a competitive differentiator.