Do Leads with C-Level Executives Outperform Other Leads?

In my last post, I discussed the common challenge that CMOs face with sales leaders who become obsessively focused on getting “premium leads” with C-Level executives.  See my post on “Glen Garry Leads.”  Your gut instinct might tell you that leads with more senior executives will result in a higher lead-to-opportunity conversion rate or faster deal cycles.  However, in my experience, leads with C-Level executives to leads do not necessarily perform better than leads with other types of contacts (Manager, Director, Vice Presidents).  Before re-directing your lead generation strategy to focus on C-Level appointments, you should perform a data-driven analysis to understand whether the additional effort required to obtain these premium leads will have the expected ROI.

Below is a basic methodology you can use to compare the performance of C-Level leads with others.  You don’t need a Ph.D. in Data Science to perform this analysis.  Most of these questions can be quickly answered with a few customizations to the standard reports in your CRM application.

Evaluate Lead Conversion Rates

Start by looking at what historically has occurred with accounts at which the first meeting was with a C-Level executives.  Look at the past 12 months in your CRM system.  When you had a first touch conversation with the CMO, CTO, CIO, COO or other CXO what happened to the lead next?  In other words, what was the lead conversion rate:

  • How many of these leads converted into an opportunity (or moved into the first phase of your sales cycle)?
  • How many of these leads went into a nurture program (for possible re-engagement at a later time)?
  • How many of these leads were disqualified?

Evaluate Deal Performance

For those C-Level leads that did move into the sales pipeline, analyze the performance characteristics of the deals:

  • How long did it take these deals to move through the various stages of your pipeline?
  • What were the average deal sizes for these opportunities?
  • How many of these deals were won?  How many were lost?  How many created a deal that resulted in a “no decision?”

Evaluate Executive Level Engagement

Another interesting to dimension to explore is the level of engagement of the C-Level executive after the first meeting.

  • Did the C-Level executive actively participate throughout the buying process?
  • Did s/he attend key meetings and approve major milestones?  Or did s/he simply show up at the end to sign the contracts?
  • How many of these leads got stalled after the C-Level meeting?   For instance, because the more junior level contacts were not “bought in” to the need to evaluate your product.

Compare the Performance of C-Level Leads to Other Leads

Now perform the same analysis on accounts with leads that started below the C-Level.  What are the answers to the questions above for leads that started with VP, Director or Manager-level first touches?  Is there a correlation between the seniority-level of the first contact at an account and conversion rates, win rates, deal size or pipeline velocity?  Compare accounts with C-Level first-touches to those with VP, Director or Manager-level first touches.  If the C-Level first touch accounts perform better, then you should prioritize getting more senior-level meetings.  If not, then it is unlikely that spending a lot of additional time and energy on these meetings is going to result in better performance.

Depending upon your target market and your product mix, you may need to further segment the results to get an “apples-to-apples” comparison:

  • Segment by Revenue – You may need to separate the comparison of deals with Fortune 500 accounts from those with small or midsize businesses.  A C-Level executive at a $50M company is much more likely to get involved with a $500K deal than his/her peer at a $50B company.
  • Segment by Deal Size – You may need to separate the comparison of large deals from small deals.  A C-Level executive is far more likely to get involved in a $1M+ deal than a $100K+ deal.  Therefore you may want to separate different deal sizes to get an apples-to-apples comparison.

Alternative Approach

What if you have not had many leads with C-Level executives?  The analysis above may not provide you with enough data points to be statistically significant.  However, there are alternative approaches that might still yield insights.  For example, you could remove the association with leads and simply compare the performance of deals that had C-Level engagement at any point in the deal lifecycle to those which did not.

Start by identifying all the deals won or lost over the past 12 months.  Bucket your deals into three categories:

  1. C-Level engaged early in the lifecycle
  2. C-Level engaged late in the lifecycle
  3. C-Level did not participate

Depending upon the nature of your sales cycle you may want to select different categories.  For example, “C-Level engaged consistently throughout the lifecycle” or “C-Level engaged only when required.”

Segmenting deals into these three categories may take some time.  Most CRM systems do not track “C-Level participation” as a field that must be populated.  You may have to search through the meeting notes, contacts and contract signatures to get answers to these questions.   If you cannot find the data in CRM, an alternative approach would be to survey the sales representatives directly.

Once you have bucketed the deals into the three categories, compare the performance of each type of deal including factors such as:

  • Deal velocity – How quickly did these deals move from stage-to-stage?  How quickly did they move from the first phase to the last phase?
  • Deal size – What was the average deal size for each category of opportunity?  What were the level of upsells or cross-sells in each category?
  • Win/loss rate – How many of each category were won, lost or resulted in a no-decision?

As mentioned above, you may need to further segment your comparison sets by company size (Fortune 500 versus SMB) or deal size (large versus small).

 

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