About this episode
Eddie Reynolds, CEO and founder of Union Square Consulting, addresses one of the most persistent go-to-market problems: marketing qualified leads that fail to convert into sales qualified leads or closed deals. With years of experience helping companies diagnose and solve broken lead conversion processes, Eddie brings both strategic frameworks and real-world case studies to this conversation.
The core claim is simple but powerful: your MQL conversion problem boils down to exactly two things—either your leads are genuinely bad fits, or your follow-up process is broken. Most organizations never conclusively determine which one it is because they lack the data, rigor, and consistency required to objectively measure lead quality. Without a disciplined follow-up process, you cannot tell whether a lead failed because it was unqualified or because it was never properly worked.
Eddie's reframe challenges the common blame game: instead of dismissing leads as "bad," the better approach is to build a structured follow-up cadence, track every touchpoint, measure conversion rates by lead type, and then use that data to identify which leads are genuinely worth pursuing. This transforms MQL evaluation from guesswork into a data-driven discipline. He walks through the diagnostic framework he uses with clients—covering speed-to-lead, cadence consistency, capacity planning, lead scoring methodology, intent signals, and CAC payback analysis by lead type.
The episode also includes a detailed case study in which a client went from 0.2% lead-to-closed-won conversion to 5%—a 2,500% increase—by implementing these fixes. Eddie also explores how segmenting and unblending your funnel reveals which lead sources, channels, and buyer personas actually drive revenue, and how to use that insight to reallocate capital and tighten your ICP definition.
What we cover in this episode
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1:09
Why MQLs Aren't Converting to SQLs The root causes of poor MQL-to-SQL conversion: broken follow-up processes or genuinely unqualified leads.
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5:10
Two Reasons Leads Don't Convert Either the lead quality is poor or the follow-up process is broken; there are no other variables.
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6:44
Building a Solid Follow-Up Process Reverse-engineer won deals to understand how many touches, channels, and messaging cadence are required to convert leads.
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13:02
Case Study: 25x Conversion Rate Increase Real-world example of a company that improved from 0.2% to 5% lead-to-closed-won conversion by implementing disciplined follow-up and SDR process.
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16:17
The 5-Minute Response Rule Responding to hand-raiser leads within five minutes delivers exponential conversion gains versus delayed response times.
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24:13
Tracking and Enforcing Follow-Up Quality Use simple reports to measure follow-up counts per lead and have management hold reps accountable to consistent cadence.
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27:34
Capacity Planning for Lead Teams Calculate how many leads an SDR can effectively work based on desired follow-up frequency and activity targets.
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34:46
Starting Simple with Lead Qualification Begin with a basic lead scoring methodology and iterate based on data; avoid over-complicating early definitions.
The lines worth sharing
If you take your company from broken processes to a super tight process with fast lead response, follow-up five times on every lead, right messaging, and visibility, there's no reason you can't get a 30% increase or a 2,500% increase.
Eddie Reynolds · 0:42
There's only one of two reasons a lead doesn't convert: either the lead sucks or our follow-up process sucks.
Eddie Reynolds · 5:10
The woman I spoke with yesterday said they have hand raiser leads from the past three months that haven't received a single touch. That's insane.
Eddie Reynolds · 8:08
If you respond to a lead within five minutes versus waiting 30 minutes, the conversion rate is exponentially higher. This is how buyers operate.
Eddie Reynolds · 16:17
Common questions from this episode
Why are my marketing qualified leads not converting to sales qualified leads?
Your leads either lack genuine buying intent or your follow-up process is broken. Without a disciplined follow-up cadence, you cannot objectively determine which. Build a consistent follow-up process—track every touchpoint, measure conversion, and then diagnose whether leads are truly unqualified or simply under-worked.
How fast should we respond to inbound leads?
Respond within five minutes for hand-raiser or high-intent leads. Research shows a 23x conversion lift when responding within five minutes versus 30 minutes. Delays of hours or days eliminate most opportunities because buyers are actively researching multiple vendors in tight time windows.
How many times should sales follow up on a lead before marking it dead?
Most organizations should follow up five to ten times via email, phone, and other relevant channels before abandoning a lead. Reverse-engineer your closed deals to see what cadence actually converted those customers, then use that insight to set your follow-up standard.
What is CAC payback by lead type and why does it matter?
CAC payback measures how long it takes to recoup your sales and marketing spend through gross margin. Breaking this down by lead type reveals which channels, sources, or buyer personas generate revenue most efficiently, enabling you to reallocate budget toward higher-performing segments.
How do I know if my MQL definition is actually working?
Compare your inbound conversion rates to your outbound conversion rates. If inbound converts at lower rates, lower close values, or lower revenue per activity than cold outbound, your MQL bar is too low. Use data to tighten your ICP, lead scoring, and buyer persona definitions.
What should we audit in our lead follow-up process right now?
First, check if you're responding to hand-raisers within five minutes. Second, run a report on follow-up counts per lead and identify leads marked dead with only one or two touches. Third, calculate capacity—do your reps have enough bandwidth to follow up as many times as your data suggests is required?
SEO meta description
Eddie Reynolds breaks down why MQLs aren't converting: it's either poor leads or a broken follow-up process. See the 2,500% conversion rate increase case study.
Target keywords
MQL conversion
lead conversion process
follow-up cadence
speed to lead
sales qualified leads
lead scoring
CAC payback
ICP definition
inbound lead process
Eddie Reynolds
Union Square Consulting
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Read the full transcript · 62 KB
EDDIE REYNOLDSIf you take your company from a process where everything's broken and people are running around and they're just doing the best they can to like a super tight process where we've got super fast lead response time, where we follow up five times or whatever it is on every single lead before we give up, we've got the right messaging dialed in, everything's like reported, management can get visibility and they can see how each of these leads are followed up on. There's no reason you can't get a 30% increase or in this case with our customer, a 2,500% increase.
SPEAKER_03Welcome to go-to-market science. There's an art and there's a science to go-to-market. And in this podcast, we talk about the science by interviewing CROs, private equity investors, and other sales and marketing experts, as well as talking about what we learn every day in the trenches helping to build go-to-market engines.
RACHAEL BUECKERTWelcome back to another episode of go-to-market science. My name is Rachel Buchert. I'm the marketing manager at Union Square Consulting. And with me is Eddie Reynolds, our CEO and founder. Hey, Eddie, how's it going?
EDDIE REYNOLDSYeah, I'm great. I'm excited. What are we talking about here today, Rachel? Yeah, so today we are talking about why our MQLs aren't converting to SQLs. And Eddie,
RACHAEL BUECKERTthis was your topic idea. So what gave you the idea for this topic?
SPEAKER_08Well, I don't know that this was like a groundbreaking idea. It's just,
EDDIE REYNOLDSwe have calls with customers and prospective customers and partners all the time about this. So even just yesterday, and obviously we wouldn't be here today talking about this if this was the first time I ran into this. But yesterday we got introduced to the CMO in a company that's doing well over $100 million in revenue, new CMO. She seems to really get it, but the marketing engine's broken or the marketing and sales engine is broken. And she wants to go in and dial in the MQLs, dial in attribution, figure out what channels are working, et cetera, et cetera. But well, the leads aren't converting. I won't give it all away. And I will talk about exactly why they're not converting. And it's not just this particular person I had just so happened to speak with yesterday, but we see this again and again and again. And so if anybody's listening to this and they're saying, we're generating a bunch of really quality leads and we can't get them to convert. I want to talk about all the things that I would do to try to resolve that. There are a number of different things that I would want to look at, a number of things that I would do. I would then look at other things after I do those things, how we would like dissect this problem and solve this problem as we have done with many clients that we've had and how we fix this problem. Yeah. I wanted to talk
SPEAKER_10about this because I keep running into it all the time. I mean, I think it's a really common issue.
RACHAEL BUECKERTAnd we hear a lot about like the MQL debate, people saying, you know, the MQL is dead. This is why you shouldn't use MQLs, yada, yada, yada. Why do you think that this debate hasn't gone away even after years of people wrestling with it? Because I mean, MQLs are not great. In the context
SPEAKER_08of our conversation today, when I say MQL, I just mean a marketing lead or a marketing account or an
EDDIE REYNOLDSall-bound account or whatever. My definition of an MQL is we have something that is worth sending to salespeople. That's it. And if you want to say, hey, MQLs are terrible. We shouldn't like use MQLs anymore. We shouldn't incentivize marketing to generate MQLs. I agree. I mean, Rachel, you're not incentivized to generate MQLs. You're incentivized to generate revenue. Heck, like half of the way that I judge you is our inbound revenue. And the other half is all of our revenue because I think marketing touches everything. So yeah, sure. I'm on board with that. We've written a ton of content talking about how we recommend that most organizations go to all bound or ABM or whatever we want to call it. I'm all for all that stuff. But for today's conversation, we're just going to use MQL because it's easy. And what I'm talking about is how we convert some level of inbound interest into a customer. That's it. Call what you want to want to call it. I don't care, but we'll call it an MQL for today because it's easier.
RACHAEL BUECKERTIs any part of the problem about the way that people use MQLs or the way we're defining it?
EDDIE REYNOLDSYeah. Yeah, absolutely. I think that you and I talked about a lot of this on a, we did at least one other podcast on this and talking about like the PipeGen 2.0. An MQL in its purest form, marketing qualified lead being a single individual that has expressed some kind of interest is really problematic in an organization where there's 10 to 15 different decision makers. In many organizations, an MQL signifies something that has hit a certain score. And a lot of times those scores are meaningless. And so the person on the other end of that MQL doesn't actually have any buying intent. So there's lots of problems with that, which we could dissect on today's podcast. But as I said, like for the purposes of today's discussion, what I really just want to focus on is why is it that somebody that we think has buying intent and interest in our product or service that we are then reaching out to theoretically via sales, not converting into revenue and not why is that one individual or one organization not converting, but why is an extremely large percentage of those we deem as qualified to route to sales, not converting such that the this is a problem in our business and a problem in our marketing engine and a problem with our cost
SPEAKER_10of acquisition. I want to break that down here today. I mean, I guess I'll just ask the straight
SPEAKER_15up question. Why do you think the most common reasons are for that? It depends. I mean, let's
EDDIE REYNOLDSbreak this down like scientifically or mathematically. Like there's one of two reasons that a lead doesn't convert. Either the lead sucks or our follow-up process sucks. That's it. There's only one of two possibilities. It's like X times Y equals Z and either X and or Y are not good. So how do we look at that? I think like, it's really hard to objectively look at a lead and say, oh, this is a shitty lead. I mean, like that's the classic example. Salespeople are like, oh, the lead sucked. That's why I'm not calling on them. I mean, like this was literally like part of the core of Glenn Gary, Glenn Ross way back in the day. I don't know, Rachel, are you old enough to remember Glenn Gary, Glenn Ross? I'm not sure I am,
SPEAKER_16to be fair. Do you know what it is? I only know it because of you talking about it. I don't remember
RACHAEL BUECKERTactually watching. It's a super old school sales movie and there's like three guys in a room and
EDDIE REYNOLDSI won't go into it because if people have seen it, then they've seen it. If they haven't, they haven't. But there's salespeople. I mean, it's super old school. They're like, they're calling clients from a payphone. It was like 1980s, whatever. And they're complaining about the leads, right? And now we're sitting here recording this in 2025 when we've got like all these digital leads and AI and attribution and lead enrichment and all this crazy stuff. And people are still complaining about the leads. So that's my only point in bringing up Glenn Gary, Glenn Ross and showing how old I am. Although I'm not, I don't think that I'm old enough to have watched that movie when it came out, but yeah, like it's one of the movies you're supposed to watch if you're in sales. So we complain about the lead quality, but we can't objectively say that leads are good or bad with any level of assurance unless we followed up with those leads. So the first thing I want to look at, and this is something I can tell a story about something we didn't want to do the customer in this regard. First thing I want to look at is do we have a solid follow-up process? So let's sit down and let's look at the leads that we've won, the ones that we've converted and what it's taken. I would want to take a look at every single lead that we've turned in a pipeline and closed one and reverse engineer it. How many times did we reach out? How many times did we reach out once and we set a meeting? How about twice? How
EDDIE REYNOLDSabout three times? How about four times? Do we reach out via email? Do we reach out via phone? Do we reach out via LinkedIn? Did we reach out via Twitter? Did we send them a package in the mail? Whatever it is, what did it take to convert that lead into pipeline and then convert that pipeline into closed one business? If we can look at that and then drill in on like the 80-20 and understand what did we do to
EDDIE REYNOLDSconvert 80% of those leads into pipeline, then we can set a process and we can say, okay, for example, we are going to follow up with five emails and five phone calls before we mark this dead no response. Seems like a perfectly reasonable approach to me. It's what I did when we were at Salesforce. It's what I do here at USC. It's worked pretty well. Whether it's four or five, six times we can debate that, but something like that. It is amazing to me how many organizations I look at and you'll see a number of leads that like haven't been followed up with at all. The woman I spoke with yesterday said that they have hand raiser leads from the past three months that haven't received a single touch. Somebody is raising their hand saying, I would like a demo of your software. That's crazy. And no one falls off at all. Forget speed to lead. They don't fall off at all, which is insane, right? And you see this commonly and it's so weird for me to be talking about this in 2025. Like presumably somebody is listening to this and they're thinking like, I want to learn best practices and go to market and maybe Eddie has some nugget of information that might be valuable for me. And then there's this organization that like can't get sales reps to follow up on a potential
EDDIE REYNOLDScustomer that is like literally filling out a form and saying, I would like to see a demo of your software. Or they reach out once or twice over the course of two weeks and like, Hey, like this isn't
EDDIE REYNOLDSany good. So I'm giving up. And let's look at this objectively. The vast majority of organizations, the person following up with these leads is the most junior person that's ever worked in their organization or worked in sales. They're oftentimes fresh out of college grads. They're an SDR. They have no idea what they're doing. And if we don't have a clear process in place to say, you need to reach out four or five times, you need to record this in whatever tool you're using to do that. You need to like leave a voicemail, et cetera, and record that. Then we can't objectively measure whether or not these leads are converting. If we do that and we collect some other information along the way, then we can look back and say, okay, these types of leads are converting. These types of leads are not converting. And we can have an objective viewpoint on this. I'll give you a case study with a customer that we've worked with and don't know if we can name them because we still haven't had approval on this, but basically they were facing this exact issue. They didn't have SDRs, BDRs. They had the equivalent of account executives in this organization and salespeople were like, leads suck. We're not following up with them. But how do we validate this? So we worked with them and they built out a SDR BDR team to follow up with this. We helped them define the process. We helped them get the tooling in place. We helped get the reporting in place. We helped management stay on top of them to make sure they're doing the right thing. They're doing all the right things. They follow up with all these leads that got good messaging in place. Everything's dialed in. They're following this process consistently. You can see it in the reports. Here's the lead. Here's all the follow-up and no response. Guess what? The leads are awful. We can't convert these leads. Now you could say, hey, Eddie, you say that because you're on the side of sales in the scenario. I say, okay, fair enough. Let's test this theory another way. What if we just give them cold prospects? So they took that team and they just turned them on cold outbound. We worked with them to define really tight territories, did a capacity plan for them, figured out the exact number of accounts they could cover in any given period of time. We used a bunch of data to figure out the best accounts for them to cover that were within their capacity to actually cover those accounts and tweak the process for outbound and said, follow these steps, reach out. Here's the messaging, yada, yada, yada. Here's the cadence. And they reached out and literally within weeks, they're booking hundreds of thousands of dollars of qualified pipeline. And you're like, okay, it's not that the process is broken or the reps aren't working or anything like that. It's that the leads indeed are not qualified. That then gives us the opportunity to go back and say, and one of the things that I love about having an outbound motion is you actually have a basis of comparison. Cause my question would be if I have an infinite number of cold prospects that I can call and it takes X number of calls to generate an opportunity and you give me a marketing qualified lead and it takes more calls to generate a smaller opportunity that has a lower close rate that results in less revenue. Why in the world would I ever want to call that lead or ever want to spend money having someone else call that lead? Like I just, it doesn't make any sense unless I just have infinite capital and infinite resources. And then you say, ah, inbound doesn't work as well as outbound, but we would just have so much money. We have like tens of thousands of SDRs. It doesn't matter. And we're making money on both of them. Like, okay, cool. I don't run into too many organizations like that. I would just say like, well, why don't we just do outbound until you like narrow your MQL into a definition that it is at least converting into revenue as much, if not more than outbound, then it's like, okay, well, the reason we're calling these inbound leads is because they convert more than cold outbound prospects. That's how I could justify spending money on having dedicated SDRs that do nothing all day except follow up on those leads or taking my AEs valuable time to follow up with these inbound leads. It really should, in my mind, cross over that bar. So yeah, for me, the first step is making sure that we have a dialed in follow-up process so we can objectively measure whether, why certain leads are converting and not converting. And ideally, if we have an outbound motion, we have a benchmark that we can set against that's not some other company with a different product selling into a different industry that is our own company and our own product selling cold versus warm inbound.
RACHAEL BUECKERTI remember the case study that you're talking about. And just to give our listeners like a scale of what this change was like, they went from something like 0.2% lead to closed one conversions to 5% lead to closed one conversions within like, I believe it was like the first three-ish months or so,
RACHAEL BUECKERTus rolling out the changes we helped them make. Yeah, it was a 25x increase in the conversion rate from lead to closed one, which is incredible.
EDDIE REYNOLDSIt's so funny to me. It's like, it's almost like such a high number that it's unbelievable. And I remember talking to my old boss about this way back in the day. I worked for a company that built a software tool on top of Salesforce. And my boss was a little like, how do I say this? Not as rah, rah, rah as this. And so Salesforce at the time would have some stuff that would come out and it'd be like, you get a 32% increased close rate from using Salesforce. My boss is like, are you serious? Like kind of bullshit is this, right? Like, I'm just going to sell 32% more deals because I'm using Salesforce. Are you kidding me? And then I went and worked at Salesforce for three years and I saw like all of our customers that I was working with. And then I thought about it and I'm like, and this was a long time ago that Salesforce did the study, but I looked at it and I'm like, so first of all, this was like just survey data from actual Salesforce customers done by an independent third party. So in theory, in theory could be right. Obviously you don't know like about the selection bias, but at the time that this stuff was coming out, like 2010, 11, 12, 13, a lot of companies that were using Salesforce were a little bit on the more innovative bleeding, not bleeding edge by any means, but there were still a lot of companies I was talking to that were like trying to do stuff out of Excel or some on-prem system or whatever. I don't really think it matters whether you're using Salesforce or an on-prem. It's just like, do you have like a really tight process? So I think if the company is going to go and spend a bunch of money on Salesforce, they're more likely to have a nice tight process, like what we're talking about, than a company that's still operating out of Excel or off of a whiteboard or off of an on-prem system or whatever. And so then I think about it like, okay, if you take a company that has, in this example, no follow-up process, each rep just gets routed these leads and one follows up, the other one doesn't. Sometimes they follow up, sometimes they don't. They're busy one day, they're not busy the next. And you take that and you translate that into a company that has a super tight follow-up process. And they say, every time a lead comes in, if it's a hand raiser, we have to respond within five minutes. I mean, we know the stats on that. There's an exponential return if you can respond to a hand raiser or high intent lead within five minutes or less versus waiting even just 30 minutes. Then you go to like a couple hours, like forget about it. And then by the time like you wait a day, and the reason this happens is because usually people are doing research and they have maybe a half an hour block and they're doing some research on a couple of potential solutions. They reach out to one vendor, they reach out to the next vendor, they reach out to the next vendor. They have a call in 20 minutes. First vendor reaches out. Hey, what's up? I saw that you reached out. You wanted some information. Yeah. Yeah. How does this work? How does this work? How does this work? Okay. That's really cool. Like, can I get a demo of this? Yeah, absolutely. Like whatever. Let's schedule a call for tomorrow. Okay, cool. I can do that. Maybe the second vendor reaches out and they're like, Oh, Hey, do you want a demo? Uh, yeah, yeah. I'll take a demo. I I'm really busy in the next couple of days. How about Friday? Okay. Okay. We can do Friday. Then they jump onto their call. The third vendor reaches out maybe two hours later, they open up their email. Now they have two demos scheduled one tomorrow, one Friday. Let's say it's Tuesday today. I have one on Wednesday, one on Friday. And then they're like, Oh, I got so much on my plate right now. I forgot. I've got to do this other thing, this other thing. Maybe it's the end of the day. And they're like looking at that email and they're like, do I really want a third demo? Probably not. I think I'm good. I'll just compare these first two. I mean, this is how buyers operate, right? This is why the vast majority of organizations or deals are won by the first vendor to respond. Yeah. People don't realize how busy
SPEAKER_15their customers are on a day-to-day basis, especially if you're selling B2B. It's insane. I literally, literally just got an email, a call while we were on this podcast
EDDIE REYNOLDSfrom a lawyer. I was trying to do some stuff for like in our employment platform. And I was asking them a question and they're like, do you want a free consultation with this lawyer? And I'm like, yeah, sure, whatever. And then like the person was like emailing me back and forth and like, I just couldn't get to them. And then I'm like, I already have a lawyer. We already have an employment attorney. So I just call him up. Like I text him on the phone and he calls me back and he's like, Hey, what's up? Like, okay, here's the answer to your question. I'm like, okay, cool. Done. Then this lawyer calls while we're on the podcast. I'm never returning that phone call ever. I already have my solution done. And the reason they're doing this, they signed some big agreement nationwide with some large like HR organization that we work with so they could get leads. So they could land me as a client to their law firm. And because they didn't respond fast enough, their opportunity is now zero. I will not respond to their email. Not because I'm like spiteful, but just like, I have what I need. I don't need to talk to them now. And so anyway, like, I think the whole point I'm trying to make is, is that this is how customers are operating. And if you take your company from a process where everything's broken and people are running around and they're just doing the best they can to like a super tight process where we've got super fast lead response time, where we follow up five times or whatever it is on every single lead before we give up, we've got the right messaging dialed in. Everything's like reported management can get visibility and they can see how each of these leads are followed up on. There's no reason you can't get a 30% increase. Or in this case with our customer, a 2,500% increase, which is just insane. And I think a function of that is also like lead selection as well. Right. Yeah. But there's absolutely no reason that you can't dial this stuff in if that's where you're starting from. You mentioned five minutes in
RACHAEL BUECKERTyour example. Is that the actual time that people should be aiming for? I always hesitate to say this,
EDDIE REYNOLDSbut the short answer is yes. I mean, you can, I guess this is a podcast, so we can't really show a visual. You can Google this. Like this is well-established research and it is like an exponential curve and responding to somebody in one, two, three, four, five minutes, the conversion rate, I forget the exact
EDDIE REYNOLDSnumber, is like 23X what it is if you just like wait a half an hour or something like that. I don't have this
EDDIE REYNOLDScommitted to memory, but it is literally an exponential curve. Yeah. And we have a version of a graphic like
RACHAEL BUECKERTthat also in the content that we wrote on this, uh, speed to lead kind of an old newsletter at this
RACHAEL BUECKERTpoint. You might have to pick people. I think it's an old concept. Like I would hope, I hope somebody
EDDIE REYNOLDSlistened to this to like speed to lead is not a new concept for them. I don't know if it is, that's cool. Welcome. Welcome to go to market science. Speed to lead is super important, but that's just one piece of the equation. Another piece of the equation is how many times are we following up? Another piece of the equation is lead enrichment. Like, do we have all the right information? If we want to go account based, the other equation would be like, are we reaching out to other folks in the organization? I didn't really want to go down this path too much, but if there are 10 to 15 potential decision makers in an organization and you have like a super hot lead and you reach out to that person four or five, six times and they don't respond. Do you want to mark that like dead, no response without reaching out to anyone else in the organization? Let's say your average deal size is a hundred thousand dollars. I don't know. Is that really a best practice? Like even I'm guilty of this. I do this all the time because I'm very, really spread thin. I really can't tell you that that's the best practice. You have to think like, okay, this organization has interest. There's a bunch of other people that are interested. Why would we walk away from this so easily?
RACHAEL BUECKERTSo in terms of like cadence channels, trying different personas, what does a good follow-up process actually look like?
EDDIE REYNOLDSI think it depends on the organization. It depends on the price point that you're selling to. And I don't claim to be like the world's best salesperson. So it's a little bit outside of my scope. But I think like the canned answer is that you want to reach out a number of times via email, phone, maybe LinkedIn, whatever other channels are relevant. Yeah. I mean, there's like all these Slack channels right now. So like that might not be relevant for most organizations, but for us, it's amazing to me, like how many people we interact with that are like literally sitting in like the pavilion Slack channel. Yeah. Whatever channel you can reach people. I mean, I have a friend who runs a digital marketing agency that's quite large and they land a bunch of their clients that just through like sending packages in the mail. So like whatever works, I think you have to look at like what works for your organization. The key point is consistency. I don't think I've ever met a company that's like, oh yeah, we have a hundred million in revenue, but we have no idea how we
EDDIE REYNOLDSconvert a lead. Everybody knows how they convert a lead, but is the team doing it consistently?
SPEAKER_15So how do you recommend teams actually track and enforce their follow-up quality and consistency?
EDDIE REYNOLDSFor me, it comes down to something as simple as a report, right? Like whatever tool we're using, let's just use Salesforce as an example. We're going to go and like, we're going to log five follow-ups, 10 follow-ups, 15 follow-ups. I mean, I'm being conservative. Like a lot of people believe that they should be following up like 10 to 15 times on a lead before they give up. Okay, cool. Like show me the report that just counts how many follow-ups we did on each lead. And then here's all the leads that were marked like dead, no response. And how many follow-ups did we do? How many of those leads marked dead, no response? We only followed up with five times, three times. That's an easy report to run. Then the question is, how do you get management to enforce that? Like, is management going to take that data and sit down and be like, hey, Bob, by the way, I realized my example person is always named Bob. I don't know why. So, hey, Bob, like I see that you had all these leads and you followed up with this person twice and this person three times and this person once, and then you mark this as dead, no response.
EDDIE REYNOLDSI think that you should follow up more often.
RACHAEL BUECKERTAnd if you're doing everything right, like you're responding within the first five minutes when they're a hand raiser and you're tracking everything and your cadence and your consistency,
RACHAEL BUECKERTeverything's good for your follow-up process, but that you're still not responding or converting. Does that mean that the MQL is bad?
SPEAKER_25Probably. I mean, you could have bad messaging, right? But if it's not like lack of follow-up and it's not bad messaging, then it's a bad MQL, right?
EDDIE REYNOLDSI'm trying to think of any other reason why a lead wouldn't convert. They clearly don't exhibit enough interest. So, a lot of organizations will come in and they'll say, okay, well, let's try to tweak our lead score. And the score has to be 100 in order for it to be an MQL and then we'll route it to sales. And you're like, okay, cool. Like, that's a hypothesis. And there's nothing wrong with that. I think lead scoring is incredibly difficult and like few people ever really perfect it, but we got to start somewhere, right? So, let's say it's 100 and then we route all these leads and everybody falls up and they don't convert. Okay, cool. Well, like which ones did convert? What can we learn about that? That goes back into like our scoring methodology. It goes into our ICP and buyer personas. If those leads aren't converting despite consistent quality follow-up with good messaging, then we've got to look at how we can qualify the value of those leads. And hopefully some of those leads are converting. So, how can we slice and dice them and bucket them and say, oh, wow, these leads are really converting. So, like, let's focus our energies there. Another issue might be capacity, right? So, we talked about this example where we have like one, two, three follow-ups. Why is that rep only following up with a lead twice? Well, maybe that rep has too many leads and they just can't handle it. So, like, we always ask this question of customers, like, have you done a capacity plan? Most will say no. Okay, well, if we haven't done a capacity plan, then by definition, like, we don't know how many leads a rep can handle. If we want them to follow up 15 times and let's say that they're supposed to do 150 activities a day, then they could do 10 leads a day effectively, right? Let's say that, like, 15 times is like the maximum and the average that we want them to follow up is eight times. Because, you know, a bunch of people answer and they say, no, I'm not interested or yes, I'm interested and I would like a meeting. Okay, so let's say it's eight. All right. And then let's just say for simple math, we want them to do 80 activities a day. All right. So, that's 10 leads a day effectively. And so, you've got 20 days in a month. They can do 200 leads per month. Simple math.
EDDIE REYNOLDSIf you give them 1,000 leads, there's just absolutely no way that they're ever going to be able to follow up eight times. Which is not going to happen.
RACHAEL BUECKERTYeah, that's kind of like a core foundational thing that you need to be doing for your follow up.
SPEAKER_29Because how do you know that you have a good follow up process if you don't even know how many leads your reps can follow up with?
EDDIE REYNOLDSYeah, unfortunately, like we all get busy. We're busy trying to hire the right people and implement the right processes and doing all these things. And these things slip through the cracks. I mean, I'm even guilty of it. We just hired two reps and we were trying to put together territories. You were involved in this. And all of a sudden, I'm like, here's 300 accounts. And then I was like, hold on a second. Wait, did I do a capacity plan? Wait, hold on. I did the capacity plan. I did the math. Like we want people to send super personalized outreach and be really focused on people and follow up with them diligently. And I'm like, they can maybe do that with 100 accounts. There's no way they can cover 300. So then I'm like, hey, this is where we're kind of getting off topic. But I'm like, hey, guess what? You're now a data analyst. Here's 300 accounts.
SPEAKER_22Why don't you figure out which of these are the top 100? And Rachel, you have access to Clay. Why don't you do it?
RACHAEL BUECKERTAbsolutely. And it's much better me doing it than like you're paying your sales reps their hourly wage for just researching stuff when they should be spending that time trying to sell.
SPEAKER_15Right. So, yeah.
EDDIE REYNOLDSWell, it's not even their hourly wage. I was just talking to a client like an hour ago and I was like, hey, like if you give a rep a million dollar quota, that means their time is worth $500 per hour.
RACHAEL BUECKERTYeah. That's kind of what I meant. Yeah.
EDDIE REYNOLDSWell, I'm just clarifying that like you can look at it from a cost basis perspective and you can say, all right, well, you know, let's say I pay somebody $100,000 a year all in. So then that's $50 an hour. Yeah. But if the goal is to generate a million dollars of revenue, then that's $500 an hour. Not suggesting that you should pay somebody $100,000 a year for a million dollar quota. I'm just trying to use simple math. And I'm like, well, what should we focus on as an organization? Like what's more important, the amount we're spending or the amount that we need to generate in revenue?
RACHAEL BUECKERTExactly. Yeah. You want them spending their time selling. That's the most valuable activity that they could be doing.
EDDIE REYNOLDSYes, we do. Let me take this back really quickly. So let's assume we've got this process dialed in. As we mentioned, everybody's following up. And then we're also collecting some level of data to slice and dice our leads. We can see what channels they're coming through. We can see whether or not they're a hand raiser. We have maybe some semblance of a lead score. We obviously have visibility into like, let's hopefully at this point or soon we have some lead enrichment. We can see what industry they're in, what revenue they have, et cetera, et cetera. Different data points that are important to us. We have an infinite number of ways that we can run reports and slice and dice data and say, okay, well, let's look at every single company that has above or below this revenue. What was the conversion rate to pipeline or not? Let's look at every single lead that came in from this channel. What was the conversion rate? Let's look at every single lead that came to a webinar. What was the conversion rate? We can have infinite opportunities to slice and dice this, but this only works if we have a solid, consistent follow-up process across all of those leads. If we do, then we can look at that and drill in and say, okay, these are the leads that are really converting and that are really worthwhile. And especially if we have outbound, we can say, okay, these are the leads that are converting to more revenue than outbound per activity or per lead or whatever.
EDDIE REYNOLDSAnd so if we don't have enough of those, then we could do a couple of things. We could say, all right, let's double down on our marketing spend in these areas. And, or we could take those reps and move them over into outbound and have them make outbound calls and generate more revenue than they can generate with the remaining leads that aren't as worth, aren't worth as much.
SPEAKER_15Intent is a really big part of this too, right? When we're trying to figure out reverse engineer and figure out our ICPs from this stuff and our
RACHAEL BUECKERTbuyer personas and things like that. How should our sales teams be thinking about intent signals as well?
EDDIE REYNOLDSThat's a really great question. I mean, I think first I would say like we had multiple different types of intent signals, right? We have third-party intent. We've got tools like Sixth Sense, but we also have first-party intent, which is what marketing have they consumed from us, right? Like, did they go and download this white paper? Did they check out this? Did they come to a webinar? Did they come to an event, et cetera? And like, that's the whole idea of a lead score is we are trying to use those different data points to score that lead the best we can. Some organizations like us, we're a very small company. Like we don't have all these tools. We don't have Sixth Sense. We do have some first-party intent, but it's limited as to what we can measure. We have to do the best we can. Other organizations have all these tools and all the analytics and all the people to run the analytics. And so they can go wild. Whatever it is you have, I think that you want to take that and try to create your first version or your next version of a lead score. And then what we want to test is like, if the lead score is X, does it convert? Or like each of those things. I mean, the lead score is made up of component parts where you say, okay, just looking at intent, for example, we say, okay, like a white paper is worth this many points. A webinar is worth this many points. This thing is worth that many points. And once you get past this many points, then you're an MQL. Well, that's a hypothesis. We don't know if that really is going to reflect an opportunity. That's going to have a high conversion rate. So again, we can slice and dice that number and we can say, well, you know, maybe every single time somebody comes to a webinar, like there's a really high conversion point. Maybe we need to increase the score on webinars. Maybe the white papers aren't worth as much. I mean, this is a very difficult. And also be, it's not a perfect science because by definition, like you don't have like one single variable, like you would in a scientific experiment, you got multiple variables. So you got to do the best that you can. And this is why I say it's so hard to get this right. And it's just like an iterative process, but you keep pecking away at that and you try to like slice and dice the data and see what is the most likely indicator that something is going to convert. And how do we narrow in our definition of what leads we should route to sales?
EDDIE REYNOLDSAnd when we should let sales focus on other things such as outbound.
RACHAEL BUECKERTIt seems like a super iterative process that probably isn't going to like come together
RACHAEL BUECKERTperfectly within the first month, especially if you have lower volume of leads coming in, lower volumes of sales, right? So if your current lead scores aren't perfectly correlating with performance and you're trying to build that data and work on it, what should teams be using in the meantime to still try and get like the best MQLs they can or route the best MQLs they can without it being perfect?
EDDIE REYNOLDSWell, I think this like depends on the capacity of the team. You just got to start somewhere, right? So let's say, for example, that you have like a large team to cover inbound. You don't have that many leads. Let's say, for example, you've got a handful of hand raiser leads. Okay, let's get on those. I mean, I always think hand raisers are the top priority. Assuming they're ICP, buyer personas, other things that are an indication that there's a strong fit, we want to respond as fast as possible. Let's focus on that first. Let's make sure that we're all over that. In theory, those leads should be converting. If they're not converting, it's like they've exhibited an incredibly high level of intent by reaching out proactively. Let's make sure they're ICP. Let's make sure they're buyer personas, et cetera. But those should convert. Then we have all the leads that are left over. We could set the bar super, super high and we could say, well, like they have to come and attend a one hour webinar or whatever it is.
EDDIE REYNOLDSAnd I think it's different for every organization. And I also don't pretend to be an expert at lead scoring. Other people on our team are way smarter at this than I am.
EDDIE REYNOLDSBut we have to start with something. And I don't want to overcomplicate it. If we're sitting in a situation where we're just like, okay, like none of our leads are converting. We know like the woman I spoke to yesterday, she's just like, I know that our score is terrible. Like she said, you know, we're giving 65 points based on just if they're like in the ICP and the buyer personas and the threshold's a hundred points. So it's like they do one thing and they're, they're an MQL.
EDDIE REYNOLDSI think a lot of times that's the situation. We look at this. I mean, I've definitely talked to a lot of customers that are just like anybody that gives us their email addresses in MQL. It's like, okay, all right. Like, I think I know how to raise the bar on that. So just start somewhere. Like don't overcomplicate it. Right. You know, you could say like a hundred points is an MQL. And then like, just everything is, I don't know, 20 points. And so they have to do five things in order to be an MQL, whatever. That's just a random example. And again, like if anybody's actually interested in a better answer, like talk to somebody else on my team about this, but I would say confidently that I think we need to start simple and then
EDDIE REYNOLDSwe need to make sure that follow-up process is in place so we can objectively measure it.
EDDIE REYNOLDSWe also should have some level of data on the leads that we've already converted. So I'd look back at those leads and I would say, okay, like, let's just narrow in only on the leads that we've converted.
EDDIE REYNOLDSWhat are the common characteristics of those leads? Do we see that a bunch of those folks like came to a webinar? We met those folks at an event or let's use an actual example.
EDDIE REYNOLDSWhat's the deal we closed the other day that you were looking at that they spent seven months on our website?
RACHAEL BUECKERTYeah. So we had that lead come in and we ended up closing them. And then I was interested to see like, what was their journey? Like, were they a part of our newsletter? Were they doing this and that? So I looked and I did see that there were a couple of people with the company that were subscribed to our newsletter and one specifically had subscribed last year. And this year they went to our website something like 35 times. And a lot of them, they were looking at like specific pages, specific frameworks. And that was just really interesting to me to see like how that interest built over time. You know, we can only really see so much from just HubSpot data, right? So it's limited, but...
EDDIE REYNOLDSBut let's use that as an example, right? So let's say real world example. Let's workshop our own business right now. Rachel, we don't have MQLs.
EDDIE REYNOLDSWe only respond to people if they proactively reach out and raise their hand. Okay. So we've got this particular lead. They've filled out a form to subscribe to the newsletter.
EDDIE REYNOLDSSo they're in our database. We know who they are. They come back to the website. They get a point. They come back again. They get a point. Let's just say, Rachel, every time they go to the website, it's 10 points. So they come to the website five times. That's 50 points. Every time they look at a framework, let's call that 20 points. And let's just say at 100 points, we reach out. What would that mean? That would mean that they would have gone to the website, signed up. They come back to the website. That's 10 points. They come back, that's another 10 points. They come back, that's another 10 points. They check out two or three frameworks. They're at 100 points. Boom. It's an MQL. It comes to me or one of our sales reps and we reach out. We call them and they're like, I'm not ready yet. Okay, cool. No problem. And then four months go by and then they reach out and they're like, ready to buy. Well, then we might like raise our lead score.
EDDIE REYNOLDSAgain, like I said, I don't think this is an exact science. And also I'm not the expert in this arena, but I think you got to start with something simple. And I don't want anybody listening to this to think like, well, we're starting from zero and now
EDDIE REYNOLDSthis is overwhelming. I've got to go buy six cents. I've got to put a score on every single thing that we do in marketing. I've got to align a score with like the industry and their revenue and the buyer persona.
EDDIE REYNOLDSAnd it's like, yeah, okay, maybe eventually. But we got to start with something because whatever we come up with is just going to be
SPEAKER_22a hypothesis.
RACHAEL BUECKERTYeah. Until we can test it. Yeah. And it's going to be different in every business. Another metric to evaluate MQL performance. I know you've talked about this one before, lead or CAC payback to lead type.
EDDIE REYNOLDSCAC payback to lead type. Yeah, I like that.
RACHAEL BUECKERTYeah. Tell me about that because I remember hearing you talk about it before, but I can't remember what you said about it.
EDDIE REYNOLDSWell, I'm a big fan of CAC payback just as a general rule, right? And so like CAC payback, basically, I don't actually like the way the metric is phrased
EDDIE REYNOLDSjust because I would rather think about it in other terms. But what it measures is how long does it take us, like whatever we spend in sales and marketing to acquire a customer, how long does it take us to recoup that cost via the gross margin that we earn, right? Meaning, in other words, if we sell a customer for $100,000 and our cost to actually serve them as a customer between like our server costs and our customer support team and all that other stuff is, let's say $20,000. So we make 80 grand at gross margin. Well, if it costs us $80,000 to win that client, then it takes us an entire year to get our money back.
EDDIE REYNOLDSAnd the rule of thumb is that like investors want to see that you're getting your money back in a year or less. Okay. I like that metric. I would rather measure it in other terms and now all of a sudden I'm blanking on what those terms are. I think I'd rather look at it as like a percentage than like a number of months, which is usually how it's expressed, but whatever. The bottom line is like it gives us a viewpoint into how much we're spending versus how much
EDDIE REYNOLDSwe're earning. Well, we could break that down on different lead types and that might be like different channels. It might be different in our hand raisers versus like our score-based MQLs. We could slice and dice it in any number of ways and we could look at that and we could
EDDIE REYNOLDSsay, oh, wow, these leads, our CAC payback is three months because we win such a high percentage of those deals that it doesn't cost us that much to acquire that customer because all the
EDDIE REYNOLDSmoney that we're spending on XYZ to bring them in is significantly outweighed by the revenue that we earn because we've got such a higher conversion rate and close rate. Then we look at the other leads and we find out that that's the opposite. This kind of goes into like the unblended funnel, right? So we look at our CAC payback and it's a year, but then we break it down and in certain
EDDIE REYNOLDSplaces it's three months and in other places it's three years. So then that might like lend me to say, hey, if we back off of this stuff that takes us
EDDIE REYNOLDSthree years to earn our money back, or another way of phrasing this is, is like our cost is 300% of our gross margin to earn a customer, then we could reallocate that capital somewhere
SPEAKER_22else.
EDDIE REYNOLDSHypothetically speaking, saying that the way you slice that is, you know, let's just use channels as an example. And we find out that this podcast, our average CAC payback is three months versus let's say
EDDIE REYNOLDSthat we're spending a bunch of money on ads and our CAC payback is two years. And then we blend it all together and we're like, we had a CAC payback of a year. Everybody's super happy. Like we hit our metric and like, that's great. Let's pour more money into the marketing engine. And you say, well, wait a second. If we look at the podcast, like we should pour more money to that podcast and we should put more, less money in the ads. And I think this is a trap a lot of organizations fall into because at least the folks I talk to, it's like not a lot of people are looking at it that granularly. And that's a real missed opportunity, especially from a capital allocation standpoint, because I look at a business, it's a revenue factory, right? At least on the go-to-market side. And if I can better allocate capital in different areas based on my insights into how that capital is converting or that investment is converting into revenue and even better gross margin, then I have a better capability to build a revenue factory that produces more revenue per dollar that comes in the door.
RACHAEL BUECKERTYeah. And I really like this metric as well, because correct me if I'm wrong, but it seems like it gives us kind of a quantitative idea of who our real ICP is and how we can rank a different, maybe subtypes of ICP, or maybe there is a lead type that is closer to our ICP than another, just based on CAC payback.
SPEAKER_16Absolutely. I mean, I'll give you a real world example. I mean, I didn't exactly do a CAC payback equation in the first.
EDDIE REYNOLDSThree months that I started this business, but indirectly I did. I started this company and we started selling our initial engagements, just like one time, five, eight, 10, 15 grand. And then after we had a reasonable number of customers, I looked back at the data and I just said, okay, like what happens with all these $5,000 customers?
EDDIE REYNOLDSAnd what happens with all the customers that spend more than $5,000? Super simple division. Well, it was the same level of effort to win these customers. There was nothing easier about winning a $5,000 customer versus a 10 or $15,000 customer. It's just like the activities that I did. I got leads via the sources that I worked. And then some of them wanted to spend five grand and some of them wanted to spend 10 or 15.
EDDIE REYNOLDSI then looked at what that looked like from sort of like a lifetime value, as much as I hate that metric. And our average customer that was spending more than $5,000 was doubling their spend within the next 12 months. Like they would give us eight grand, we'd do the work, they'd be happy with it. And they'd say, hey, could you guys do these other things? And we'd say, yeah, pay us another eight grand. And they'd say, okay, cool, no problem. And the customer that paid us $5,000, it was like all the money they ever had in the world because they were smaller companies. And we'd say, hey, there's all this other stuff that you probably should do too. And they're like, oh, we can't afford that. Okay, cool. Well, what does that do to my cost of acquisition and my CAC payback? Without doing the exact math, it's pretty obvious. So I immediately shifted my focus to say, well, let's raise our prices.
EDDIE REYNOLDSLet's set our minimum to $8,000. And then all of a sudden, all of our customers on average ended up doubling their spend with us in the first 12 months.
EDDIE REYNOLDSAnd then we've continued down that path. And now years later, we charge significantly more than that. Ironically, we provide about the same amount of work for the same price. We just say, hey, we would like to work with folks for a longer term basis. And that's been life-changing for my business and for me personally.
EDDIE REYNOLDSBut this all comes down to looking at the data and trying to understand how much am I spending to try to acquire a customer via these channels?
EDDIE REYNOLDSAnd what is it paying off? And I looked at that, especially as an entrepreneur, and I'm like, I'm a reasonably experienced salesperson that is just hustling as hard as I can to close this $5,000 deal. And there's just no way that I can afford to hire somebody with the requisite level of experience to close this deal and make any money on it. I mean, in case anybody's interested, like these deals, not only did I need to be like a halfway decent salesperson, but they would ask really technical questions about Salesforce. And I have to answer those too. So I'm like, I actually need two individuals. I need somebody who's really good at Salesforce and somebody who's like decent at selling. And there's just no way that I can afford to pay two people to do that to then close
EDDIE REYNOLDSa $5,000 deal. There's just no way.
RACHAEL BUECKERTYeah, and we were talking about like segmenting and unblending the funnel before, and this is such an important exercise to do for this reason exactly. And we did a whole podcast on this topic, unblending the funnel, somewhat recently. But really quickly, for the sake of the listeners right now, how do you recommend teams bucket or segment their MQLs to get these meaningful insights?
EDDIE REYNOLDSI think there's an infinite number of ways, right? I think one way is obviously by channel. And that goes into lead attribution, which is really difficult, but we can look at different channels and we can try to understand like what the conversion rates look like. There's obviously intent. The simplest way to split this down is like our hand raisers versus our non-hand raisers. We could slice it in other ways, like exhibit intent, like looking at what particular actions
EDDIE REYNOLDSpeople took. There's obviously the firmographic and the technographic data as well.
EDDIE REYNOLDSLike we might say, well, let's split this and say organizations of this size versus that size. I think there really are an infinite number of ways to look at this. What I might want to do if I was doing this is I'd look at the customers we've won. Especially the ones that came via inbound for the purpose of this conversation. And I would try to just look at all of them and see if I could see any common threads. And I'd also look at like all the leads that never converted. And I try to see if I could see any common threads and I would form a hypothesis. I would say, okay, I feel like I keep seeing this here and I keep seeing that here. What if I create a report and I break this in two groups and I run that report to see like what the conversion rate looks like or the CAC payback on assuming, by the way, that I can get the information for CAC payback. Like this is also an accounting issue. What does that look like? I think that's like kind of the heart of data-driven proactive rev ops. It's like, there's not necessarily a silver bullet as much as like, let me just look at the data and try to understand what it's telling me.
EDDIE REYNOLDSWhat can I infer from this? I mean, we went through this exercise, Rachel, when I first hired you, where we had all these MQLs that weren't converting and we looked at them and we're like, okay, like what is the revenue for each of these organizations? Who's the stakeholder, et cetera. And then I said, okay, like what happens if we draw the line at X dollars in revenue? What happens if we draw the line at whether or not they have a CRO? And it was like night and day, like our conversion rates were like 20, 30% for what we now define is our ICP and our buyer personas. And the other, the rest of the leads was like 4% or like 2%. And it was like, oh, okay. I don't have a silver bullet to give you on how to identify that. It's more just looking at the data as much as you can. And in our case, we didn't even have the data. We literally had to like go lead by lead by lead and like Google it. But we did that for a hundred leads. And then we looked at it and we're like, oh, wow. Okay. This is very obviously the issue here. So now let's re-engineer everything that we do in marketing to address this type of customer and this type of buyer persona in hopes that those are the people that will reach out to us because we know that those are the leads that are going to convert.
RACHAEL BUECKERTAnd just like magic, our MQL to close one conversion rate went up quite significantly. And our MQL to SQL rate and the MQL to SQL conversion rate as well. We are converting a lot more of our leads that we're getting because we're just targeting
RACHAEL BUECKERTa very, very specific subset of people, right? And we still have more work to do.
EDDIE REYNOLDSI mean, like we're guilty of it as well, of like not being perfect. Oh, no, it's not perfect.
SPEAKER_54Yeah.
EDDIE REYNOLDSWe still don't even like have any kind of like filter criteria. Like everybody that raises their hand is still like considered a lead, which is terrible because like everything that we just discussed is kind of being ignored. When you run a report and you show like the MQL conversion rate, the only way we've improved it is by generating different content, but we actually don't even like, we haven't even technically changed our definition of an MQL just because we've been busy and we need to go enrich the lead data and adhere to that definition. And so what you're talking about is an improvement of MQL conversion without changing our follow-up process and without changing our definition of an MQL. Actually, there we go. You asked me this earlier and what we did is we changed our content.
RACHAEL BUECKERTYeah. And we're still changing. We're continuously still changing, trying to tweak so that we, uh, to find the sweet spot of where we're like best serving that ICP. Right.
EDDIE REYNOLDSYeah. But it's pretty obvious to me that like, I mean, we had a lead come in the other day and it was like, I mean, it was just a person from an organization that had no salespeople. And I'm like, yeah, that's like, that's obviously not a fit for what we do, but that's still
EDDIE REYNOLDSshowing up in our MQL numbers. And like, I don't know, I have no excuse for why we haven't fixed that.
SPEAKER_57Yeah. No, me neither. We'll get there. We'll get around to it. I tell people, it's like, we do this stuff for other people.
SPEAKER_10Like, I think we do a lot of stuff for ourselves too, but there are gaps. We do. We do. Yeah.
SPEAKER_29Yeah.
SPEAKER_10Well, what else?
SPEAKER_59I feel like we're running up on time here. Yeah. What else do we cover?
SPEAKER_29There's not too much else to cover, to be honest, but I wanted to ask, so just to clarify, we
RACHAEL BUECKERTtalked about like CAC payback by lead and stuff like that. Would it be smart then to say we should actually be defining our MQL itself based around CAC performance?
EDDIE REYNOLDSI mean, I do want to be hesitant here. Like there's only so much you can do with CAC and CAC payback. I mean, first you have to even be able to get the data, right?
EDDIE REYNOLDSAnd so like, I can go to accounting and I can get like the total amount of money that we're spending on sales reps and then total amount of money we're spending on marketing. I mean, even that is a little bit difficult. It's like, where do you put the Salesforce license? Is that a cost of sales or is that somewhere else? And like that right there just becomes complicated, but we figure that out.
EDDIE REYNOLDSAnd then you say, okay, well, like what is our CAC for our podcast leads? Well, we could just take every single lead that we have and just divide by our total cost of sales and marketing and then land on a figure for CAC payback. A simpler way to do this is we might just look at like, what's the lead value? I kind of like that metric as well, where we just say, okay, you know, we have X number of leads and they convert to X dollars of revenue. So each lead is worth X because it's basically just a very simple way to measure this. So let's say that we generated $10 million of business off of our podcast last year. And in order to do that, we had to generate a hundred thousand leads. Well, that means that each lead is worth a hundred dollars, super simple math. And then we say, okay, we generated $10 million of business off of ads as well. And in order to do that, we had to have like 500,000 leads. All right, cool. So then the value of a lead that comes in via ads is $20 and not a hundred dollars.
EDDIE REYNOLDSAnd then we could also just look at like, what is our cost to produce a podcast versus our
EDDIE REYNOLDScost on ads? So, okay, like we could maybe be a little bit objective about that, but there are definitely limitations where you hit a wall and it's just like, we don't have the data to measure that. So I want to be careful there. And also it's sometimes like you asked me these questions that were like live on a podcast and I'm like, I have to think about that for a minute to answer that question. But I don't want to like over-prescribe that we like go too far down the rabbit hole on trying to measure everything perfectly.
EDDIE REYNOLDSI think what's really important is that we get a really firm process in place. We make sure we're following up with leads and then we just take a step back every once in a while and try to look at this and say like, okay, what kind of leads should we try to be generating more of? What ICP, what buyer personas, what channels, what MQL definition should we focus our energy
EDDIE REYNOLDSand resources on? And let's just do the best that we can and we just keep iterating.
RACHAEL BUECKERTSo what would be like the first thing CRO or a revenue leader should go and audit after
SPEAKER_15listening to this episode? The very first report or thing that they should check.
EDDIE REYNOLDSIt depends on like where they're at. I mean, if they're at an early stage, not as a company, but in this regard, what we're talking about here, the first thing that I would want to look at is what does our follow-up process look like and, or what is our speed to lead on our hand raisers? And oftentimes the answer is we can't measure that because we don't have a process that we're consistently executing and, or we don't have the tooling in place and, or we're not holding people accountable. So that's the very first thing. The second thing that I would want to look at is, are we collecting data that we can use
EDDIE REYNOLDSto measure the things that are important? This gets into lead attribution. It gets into lead enrichment.
EDDIE REYNOLDSI mean, part of the reason that, you know, we had a problem with looking at our own leads is because we, I guess we have clay now. I don't think we had clay then.
EDDIE REYNOLDSWe didn't have any lead enrichment tool just because, you know, small business type budgets, et cetera. Lead enrichment tools. You and I like Googling stuff.
SPEAKER_13I don't even know if clay was like a thing back then.
EDDIE REYNOLDSI don't know. Probably. We'd probably know about it. You know, that'd be like the second thing that I would, I would look at is are we collecting data so that we will then have the opportunity within reason to slice and dice our data? I'm a big fan of what refined labs calls self-declared attribution or self-reported attribution. Just like we have a forum on our website. How'd you hear about us? I've found that field.
EDDIE REYNOLDSWe've been doing this for years at this point to be quite accurate. Like, it's really interesting. People will go on there and they'll say newsletter, podcast, LinkedIn. I'm like, oh, funny. That's, those are the things that we spent our time and money on.
SPEAKER_64Yeah.
EDDIE REYNOLDSWhat a coincidence. And it's really interesting to see how often they mentioned the newsletter versus how often they mentioned the podcast. And then you also, I don't even know how you do it. You have all this insight via HubSpot as to like all this stuff people are doing on our website, which is really nice too.
SPEAKER_29Secret secrets. No, it's not much of a secret.
RACHAEL BUECKERTIt's just HubSpot. I just don't spend a lot of my time in HubSpot.
SPEAKER_16Well, those were all the questions that I had for this topic today,
RACHAEL BUECKERTwhich is perfect because we're coming up right on time.
SPEAKER_16Awesome. Thank you, Rachel. This was fun as always.
RACHAEL BUECKERTYeah. Thanks, Eddie.
EDDIE REYNOLDSThanks for listening to the show. If this resonated and or you'd like help with anything we talked about in the show, please reach out to us. You can find us at unionsquareconsulting.com and the info will be in our show notes.
