• Account Based Marketing (ABM) initiatives require prospecting to find high quality leads.
  • SaaS B2B leads are expensive and even more so when considering the amount of time spent prospecting for new leads.
  • As more data is collected, the prospecting process should get smarter over time, but that usually is not the case.

Defining a B2B Lead

First things first. Every SaaS B2B company needs leads to maintain or increase revenue. Even if a SaaS B2B company took the strategic decision of not growing their revenue (unlikely, but let’s just assume that is the case), the company would still have to spend money to get new leads to cover for churn.

So, what is a lead? A lead is a very broad term used to describe a contact that has a propensity to purchase a product or service. A lead, as the name implies, leads to sales. There are several definitions we should consider when in the land of leads:

  • Prospecting: this is the activity related to finding leads. Without prospecting, there are no leads and without leads there are no sales. Prospecting is the activity to get new leads.
  • Cost per Lead (CPL): this is the cost to obtain a new ‘qualified’ lead.
  • Information Qualified Lead (IQL): IQL’s are those leads that have engaged with one of your campaigns or your content and have shared basic but important information, particularly an email address.
  • Marketing Qualified Lead (MQL): marketing qualified leads are when marketing teams identify leads that have interacted with your content or service. MQL’s are also known as “warm” leads.
  • Sales Qualified Lead (SQL): sales qualified leads are those that have been reviewed by a sales development representative and that have a strong propensity to purchase a product or service. Engagement speed is key here!

The Time and Cost of Obtaining Leads

It goes without saying that businesses have to spend time and money to get leads. Many factors are in play, but at the end of the day companies want to maximize their return on investment.

Good sales reps are very persistent and are colloquially known as “hunters”. They understand that it takes an average of eight call attempts to reach a prospect. In addition to being persistent, they have built relationships that help them quickly tap into new opportunities. But the fact remains that most businesses spend an inordinate amount of time searching for an accurate account and contact information to engage with potential customers.

According to the Demand Generation Benchmark Report from HubSpot circa 2015, companies in the information IT & Services industry obtain between 500 and 1,000 leads per month and spend between $51 and $100 per lead. It can be determined that in 2015, companies in the IT & services industry spent between $25,500 and $100,000 every month for leads (leads in this context are marketing qualified leads, or MQLs):

  • [500 leads minimum] * [$51/lead minimum] = $25,500 minimum for leads
  • [1,000 leads maximum] * [$100/lead maximum] = $100,000 maximum for leads

In 2017, this same report was published again with more recent data stating that, on average, IT & services companies were spending approximately $369.88 per lead, a major increase from 2015. On average, approximately 3,660 leads were generated and of those, 3,052 became marketing qualified leads (MQLs). Of those 416 sales opportunities arose, also known as sales qualified leads (SQLs). Of the total number of SQLs, the report states that IT & Services companies acquired, on average, 363 new customers.

This translates to around $154K per month to obtain SQLs:

  • [416 sales from SQLs] * [$369.88 per lead] = $153,870.08 per month for successful sales from SQLs

Based on the information provided between 2015 and 2017, it can be concluded that the amount that companies are spending per lead is increasing over time. In 2015, IT & services companies spent anywhere between $25,500 and $100,000 every month for SQLs, and in 2017, these same businesses spent around $154,000 per month on SQLs.

And this isn’t even considering opportunity costs!

A search on Google for “how much time do sales reps spend prospecting” returns quite a bit of data which states that prospecting takes anywhere from 20% to 40% for the sales representatives time. In many cases, the prospecting work is simply attempting to validate an email address or phone number, before any engagement can take place. Considering sales representatives are in large part the lifeblood for the business, reducing the time spent prospecting could help significantly boost business’s revenue.

Imagine for example that 20% of a sales rep’s time was refocused on selling instead of prospecting. That would help them and the business increase their top line in a big way. Other benefits arise, such as increased lead velocity and improved cash flow.

The Challenge with Prospecting in the Land of B2B

Good prospectors take a few general categories in consideration when looking for a good lead. These include:

  • Does the account match the ideal customer profile? This is also known as “fit” information and includes firmographic, demographic, and technographic data.
  • Are the contacts at these accounts involved in the committee and if so at what capacity?
  • What are the best channels to monitor changes in behavior?
  • What relationships can they leverage to get good references or introductions?
  • Where can they obtain verified contact information to initiate the sales process?

It’s possible that some automation is in place to help capture new leads from targeted campaigns, such as those offered by LinkedIn. However, prospectors still need to obtain context from other channels in order to deliver the right message, at the right time, and in the right format. Sometimes the numbers do not reflect the opportunity costs of having reps spend up to 40% of their time prospecting. Furthermore, if the organization does not have dedicated Sales Development Representatives (SDRs) available, one sales rep would have to do both the prospecting and close the sale, which is a process that is not scalable.


Selling to businesses is hard and requires a tested, repeatable process. Sales reps have to deal with the fact that a purchase decision is done by a committee and not by an individual. That means sales representatives have to call and convince multiple personas within an organization before a purchase is made. Granted, in this day and age the prospect has probably done most of their research before even engaging with the vendor, but some engagement with multiple people is necessary, especially at higher price points.

The sales rep that is able to offer the best message and get to the potential customer first has the upper hand.

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