The Cost of a Bad Lead: How Marketing Departments Can Better Serve the Sales Team

Gil Allouche

Jul 27, 2018

According to a recent survey and report by Integrate, 43 percent of leads resulting from B2B companies’ demand generation efforts contain duplicate or incorrect data. Many companies use metrics like cost per lead or cost per sale, but if they were able to reduce bad leads, these numbers would drop.

There are several reasons why a lead might not be useful for your sales team. The responder may not be in the business’ target market, the lead could be incomplete, it could be a duplicate of one already in the system, it could come in a non-standardized form and not be readable by your CRM, or it could be non-compliant, and you are prohibited from responding to it.

Seventy percent of sales reps say that more than half of the leads marketing generates are not usable.  That means that your cost per lead metric may be twice as high as you are calculating.

The costs are bigger than just eating up your marketing budget. If someone fills out a request for information and no salesperson can contact them due to low data quality, the cost of a bad lead could be tens of thousands of dollars. This inefficient marketing also produces unreliable analytics.

Further, when the sales team does not trust their leads, they lose faith in the ability of the marketing team to deliver. This can cause morale to tank in both the sales and marketing departments. Bad inputs can increase database usage costs. Finally, if someone were to contact a prohibited lead, there could be significant fines.

On the other hand, marketers who create good leads for the sales team can help their company meet revenue goals. Only 53 percent of salespeople in companies with standard leads were confident they could reach their targets whereas in companies with good data, 78 percent said they were on track according to a report by Integrate.

The report also showed that in 14 businesses surveyed, the marketing department spent between 12 and 146 hours per month cleaning up their leads. This could be the equivalent to a full-time staff person working on parsing the leads.

The delay between when the lead comes in and when a sales person is able to act on it can also cost the company money.  Between 35 and 50 percent of sales are made by the company that contacts the potential customer first. Only 26 percent of leads are contacted within 5 minutes. The average response time is 42 hours.  So, getting clean data to sales reps quickly should be marketing’s primary objective.

How to Get Rid of Bad Leads

How do you get this good data? It starts with an overhaul of your marketing program. 

Marketers know they need to create an ideal customer profile (ICP), but meeting the needs of that “ideal client” often gets lost in the marketing message. Additionally, many ICPs are based on hypothetical information rather than real customer data. Getting better leads starts with having a clear picture of who your customer is and how to meet their needs with information and outreach.

Next, you need to define what the key selling event is for your customer. Why are they looking for your solution now? How can you help them find you? How can you best explain why your solution meets their needs?

One way to communicate this is through your inbound marketing channels. Too often, blogs target keywords instead of potential customers. While you need the customer to find you in their search for a solution, you also need to provide them with the information they need to make the decision. Using inbound marketing more effectively can increase the quality of the people who ask for more information.

Finally, use marketing automation tools through your entire funnel. AI-driven campaign platform like can speed and scale your ad execution and lessen the time it takes to hone your ICP. Chatbots can answer basic questions so that when sales reps get the lead, the prospect is ready to buy. Integrated marketing automation can also provide clean data so that the sales reps can get the leads directly rather than waiting for marketing to cleanse it. Automation can also weed out duplicate leads before it ever reaches the sales team so that you don’t have two reps working one customer.

The cost of a bad lead exceeds the dollar value expended on generating it. When you have good data, your sales team is more efficient, and your marketing department comes off as stars.

Need assistance building out your ideal customer profile and then executing campaigns against it? Contact us today!

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