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Column: Lead management increasingly leading to growth

Denis Pombriant explains why he expects lead management to become a major part of companies’ CRM plans in the next four years.

I saw an interesting Gartner report the other day written by my friend Chris Fletcher, MarketScope for CRM Lead Management.  What got my interest was this strategic assumption: “By 2015, 30% of Global 2000 companies that focus on improving lead management processes will increase revenue 5% to 10% through better qualification, prioritization, distribution, augmentation, allocation, tracking and closing of leads from multiple lead-generation sources.”

I liked that and felt in broad agreement, but the 30% measure seemed rather conservative. Fletcher is a good and careful analyst, and I would not say he’s wrong, just that the number seems low in light of the things that are swirling around the economy. Ironically, I agree on the revenue increase numbers, as small as they seem, but probably for different reasons. I think generating revenue at all, never mind increases, will be a challenge in the next few years.

First, 2015 is still almost four years away, and that’s almost an eternity in this market. More important, lead management and related subjects such as marketing automation, drip marketing and revenue performance management have been percolating for quite a while. Companies such as Marketo, Eloqua, Manticore Technology, Unica and many others have been making a living at it.

It would not surprise me if the next four years saw the exponential growth part of lead management’s growth curve. That’s why I feel 30% is a low number. Note that this implies more companies will actually take on the technology, but it seems like the ones that will make out well are in the 30% minority. It doesn’t have to be that way.

In my view of the world, I expect that the next four years will drive much more intense use of modern marketing and lead management for reasons that include demographic shifts and financial doldrums.

The population, at least in North America, Europe and Japan is aging. That’s about a billion of the richest people on earth, the ones with the most purchasing power. Fewer young people are entering their productive years, and more are retiring. People who retire live on fixed incomes either from savings or pensions or a combination. They also don’t buy much. Younger people forming households are the buyers, and to have net growth, young people entering the economy have to outnumber those leaving. It looks to me like demand will decline for structural reasons.

On the finance side, if you name a country in the developed world, you can probably identify a debt crisis waiting to happen. Debt-to-GDP ratio in many of these countries is so high that it is hard to see how they can borrow more money to pay their way. You might want to look over the thought-provoking book Endgame, at least for a diagnosis of the problem. Some form of belt tightening will need to happen and that could easily translate into less money in circulation. That, in a nutshell, is the financial reason for demand destruction.

Taken together and adding the soaring cost of transportation, these issues suggest to me that customers are becoming more elusive and hard to sell to partly because they don’t have the spending power they once did and partly because their lifestyles don’t demand the same things they did 10 years ago. In that environment, technology that identifies leads and helps capture customers will be in high demand. This should be good news for companies that help manage the lead development and qualification process.

A four-year horizon is not that long, and if I were in charge of a company or a marketing department, I think I’d be looking at lead development as the next important thing to consider.

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