Mulch volcanoes (mulch piled up 6”, 8”, 10” up the side of a tree) is a common sight in gardens and lawns across the country. And, while it keeps weeds from coming up and looks good, people not in the know mimic this practice. It turns out this is a bad practice to follow (unless you want to kill a tree), but it’s a popular practice nonetheless. It’s the same with lead thresholding: it’s common in B2B SaaS, but it’s a bad practice which negatively impacts an organization’s growth. Lead thresholding is the practice of holding leads back (in a marketing automation platform) and only sending leads to a company’s CRM that meet a specified criteria, typically a lead scoring threshold.
The main reasons companies threshold leads
- Licensing costs. The number of contacts/leads is a parameter that many CRMs use to determine license cost. Thus, when more contacts/leads are entered into the CRM the total license cost increases.
- Sandbagging. They don’t want to add leads into the CRM that are not ready for sales to engage as it will clutter up the views and reports and make it more difficult for reps to use the CRM.
- Rep focus. They want reps to focus on leads that are sales ready and not waste time on leads that aren’t. By holding the leads back from the CRM, management ensures that reps won’t see them and consequently won’t spend time on them.
Before we get into all of the pain points that lead thresholding causes, let’s look at these three items in a little more detail.
- Licensing cost. On cost, determine how much is actually being saved by thresholding. For the vast majority of B2B SaaS it tends not to be a significant amount of savings. If it is (and to be fair, there are some organizations for which this is the case) don’t threshold equally across all leads. At a minimum, agree on the criteria (e.g. titles, levels, industries, geographies, etc.) of leads that are ALWAYS going to be sent into the CRM and which should be held back. Don’t threshold by holding back leads that have not achieved a specific score.
- Sandbagging. If you put every lead generated by marketing into a CRM with no structure, of course it’s going to deteriorate usability, but this shouldn’t happen in the first place. Address this issue by creating a sortable custom field that denotes the importance of the record. Alternatively, or in addition, give the leads to a placeholder owner in the CRM so they are not actually assigned to sales.
- Rep focus. Holding back leads so a rep won’t focus on them is a strategy. But, it’s a strategy that prevents reps from more easily identifying buying groups and engaging with leads earlier in a buyer’s journey, which on all accounts helps reps sell.
At Capstone Insights we’re not proponents of lead thresholding. We don’t like it and we view it as a bad practice. Unless your organization generates millions of leads and potential buyers only represent a small subset of them you should never, ever do it. Here are the reasons why.
Lead thresholding causes the following issues
- Sales visibility. Sales cannot see all of an account’s known individuals that have engaged with their company. This makes it more difficult for a rep to identify buying centers and precludes them from using “not warm enough” marketing leads to gain entry into a target account where they have no access points and no leads that have meet the scoring threshold.
- Segmentation. Inability of the marketing automation platform to utilize account level data to segment leads (assumes account-party methodology in the CRM) and personalize emails. This could include a customer nurture that focuses on the product the client uses and its renewal date.
- Account level scoring. Inability of sales rep to see all activities that have occurred on an account and inability for the company to score at an account level. This is really important because typically in B2B, multiple people are involved in a purchase decision, not just one person. Like segmentation, this assumes account-party methodology.
- Duplicate contact acquisition. Thresholding leads increases the number of duplicate leads being purchased. For example, sales reps often have the ability to purchase contacts in the CRM (e.g. though data.com). As a result, we often see reps purchasing leads that are NOT in the CRM, but are in the marketing automation platform (i.e. buying leads that the company already has).
- Reporting. Sales tends to view the CRM as the location where all known contacts are stored and for this reason it makes sense that reps and sales management, but also marketers, pull reports from the CRM to look at contact counts for geo, target accounts, industries, etc. Leads which are thresholded are not present in these reports. Also, combing the data sets (thresholded leads + the ones in the CRM) isn’t an easy 15-minute exercise and can take several hours.
- Interaction management. In some, but not all marketing automation platforms, thresholding creates data loss. Specifically:
- Activities. Activities are pushed over from a MAP to CRM in real time and are unable to be done post-lead push. So, any activities the lead performed before being submitted to the CRM (e.g. email open) don’t transfer over to the CRM.
- Campaigns. Campaigns are pushed over from a MAP to CRM in real time and are unable to be done in post-lead push. If a lead submitted several online registration forms BEFORE it was finally sent to the CRM, all of those previous campaigns are not appended to the lead record, only the last one is added.
- Audit trail. If you have audit trails enabled in your CRM, data value changes that occurred in the marketing automaton platform (e.g. changes in title, level, etc.) are not depicted. Only the current value is visible.Still not convinced that lead thresholding and mulch volcanoes aren’t good ideas? – If so, let me know what’s holding you back from coming over to our way of thinking.
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.