How much time have you spent discussing - or even thinking about - your Lead Sources?  Probably not much.

It’s a drop-down present in literally every CRM, and its crucial to understanding so much, including where to invest both sales and marketing efforts.  Lead Source passes from the Lead to Contact to Opportunity. If the Lead Source is wrong, then so is your entire attribution model.  Said differently, if this is messed up, you cannot answer the question, “What is your best source of customers?”

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That should be a big deal to you. Yet, we often see Lead Sources untouched. The default picklist values don’t help, as they look like they have not been changed since 2004.  Let's get into into the weeds.

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The Issues

The Salesforce default list is below and most CRMs follow pretty closely.

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• Web
• Phone Inquiry
• Partner Referral
• External Referral
• Partner
• Public Relations
• Trade Show
• Word of mouth
• Employee Referral
• Purchased List
• Other

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The problem with this list is that some are an actual source (i.e. Purchased List) while others are a method of contact (i.e. Phone Inquiry).  Why is that a problem?  Look at that list through the lens of maximizing marketing ROI.  It’s not good.  For instance, you classify something as a Phone Inquiry but that may have been from a person who you met at a Trade Show.  What does that fact that they chose to call really tell you?  Nothing of importance.  And there are other problems. Partner Referral seems highly confusing with Partner, and the definition of External Referral is open to interpretation.

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Like most of Revenue Operations, the “devil is in the details” and the details of Leader Source can be difficult to set up correctly.  Too many sources, and you have a messy pivot table where you cannot see themes.  Too few sources, and you cannot see ROI by channel or gain the necessary insights.  Good news though! Everpeak has a simple framework by which to fix, and its based upon two questions.

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Everpeak Lead Source Framework

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How do we attribute revenue?

As discussed in this article, The 5 Buckets of Revenue Attribution, every dollar on your Profit & Loss statement can be attributed to one of five categories: Inbound, Outbound, Partner/Referral , Retained, and Expansion

The first three buckets are for new customers, while the fourth and fifth buckets are attributed to existing customers.  For the purposes of Lead Sources, this means that only the first three are relevant.  There are variations depending on the business model, but generally, every single Lead Source will fit into either:

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• Inbound
• Outbound
• Partner/Referral

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That’s it.  Really simple, and whether a lead contacts you as a “Phone Inquiry” or “Contact Form Inquiry” is irrelevant. You want to know if it originated from one of these three categories.  They can, of course, be broken out into further detail which we’ll outline in the next section.

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What are our primary and secondary Lead Sources?

The Lead Source is a picklist by default.  However, you should think of Lead Sources as two-tiered and setup your CRM to reflect this.  The top tier is the primary category (i.e. Outbound) which is the picklist.  The second tier is the secondary category is the greater level of detail.  This field is automatically populated or manually filled in, depending on the source.  In some cases, you may find that a third level is helpful, especially where there is a “long tail” of many possible sources.

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Below are some examples of how the three categories above could be broken out with commentary.

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• Inbound
  • Direct
  • Blog
  • Review Site
  • Newsletter

Inbound secondary categories can have a very “long tail” because any website could be listed here.  We find that categorizing at a high level like the categories above is most helpful, and digging deep into that third level is best done in Google Analytics or web tracking software. However, it depends on your business.  For instance, if 20% of your new leads come from a specific website like Yelp, then Yelp should be its own category. If the number is high enough, you might even elevate it to a primary category.

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• Outbound
  • BDR external
  • Tradeshow list
  • Zoominfo data

Outbound is generally pretty simple.  Many organizations actually do not have an outbound function.  The only phone calls made are to follow-up on inbound leads, which is still inbound.  Above are examples of true outbound actions.  A BDR (business development rep) is someone making cold calls, and that could be an internal employee or an external agency.  Zoominfo data designates emails send to data acquied from Zoominfo. However, this could be emails, LinkedIn messages, and phone calls.  Again, the method of contacts is not the important part.  The source is the important part. That could be Zoominfo, Apollo, High Growth Insights, or even a purchased list from a trade association.  You definitely should test different modes of outreach, but track that elsewhere.  Lead Sources is for the source.

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• Channel Partner
  • ABC Corp
  • XYZ Corp
• Referral
  • Employee Referral
  • Customer Referral
  • Word of Mouth

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Above, we have broken up Partner/Referral into two groups as this is often relevant.  If an organization has an actual channel partner program, that is typically a meaningful number of leads and should be its own category.  For instance, a manufacturing company could receive most of its leads through manufacturers representatives.  In that scenario, it’s best to have its own category and think of Referrals as a different category.

Referrals are usually either from employees or customers. There are many other possibilities, but these are the big two.  “Word of Mouth” tends to be the catch-all where all untrackable leads go. Seek to minimize the number of leads that get categorized here.

This is the simple, two-question framework that we use with clients to get the conversation started. The configuration of the CRM is easy.  The alignment of the right categories can be more difficult, but it is worth the effort.

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Dynamic Fields

Certain categories lend themselves to a dynamic field.  What we mean by this is rather than a free-form field for the secondary classification, the CRM would show a field instead that relates to a different field.

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Automate the tracking

Finally, there’s the tracking of all this.  The entire system breaks down if you don’t have accurate data.  Automate wherever possible.  For instance, if you are importing a list from a tradeshow, that entire list should already have the primary category of “Outbound” and the secondary category of either “Tradeshow list” or the specific tradeshow by name pre-selected. Likewise, if leads are pushed from an external BDR agency, that classification is automated.

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The toughest category is usually inbound.  With so many potential inbound websites, there is a bit of technical work to ensure that your tracking matches your methodology. UTM parameters within the URL (i.e. source, medium) should be used to automatically populate the source as well as ensure that your reporting is clean. Everpeak can help you think through this, but as always, keep it simple.

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Final thoughts

Lead Sources often gets put into the work stream of “we’ll get to it later” or “it’s good enough.”  We get that. Classifying the Lead Source is an action that doesn’t inherently increase or decrease your revenue.

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But by not giving Lead Source the attention it deserves, you miss out on the downstream insights that are crucial to an organization. You lose the ability to answer questions like, “Which employees have referred us business?” and “Where should we cut marketing spend?” You lose the ability to quickly notice changes in performance or to have an automated customer referral program.

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Once you get your Lead Source fields and adjacent reporting right, you’ll never know how you lived without.  Contact Everpeak to talk about how to set this up for your organization.

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