What is Lead Generation Fraud? And How Can it Affect Your Brand?
Kerry Coppinger
|Cyber Risks & Threats | August 12, 2022
Many organizations are realizing that fake traffic is omnipresent, and this raises concerns for many teams outside of just IT and security departments. One area of business that is largely impacted by bots and fake users is the go-to-market operation, which includes advertising, marketing, sales, and analytics teams. Lead generation is a critical play for these teams, but unfortunately, the Fake Web often stands in the way.
What is the definition of Lead Generation Fraud?
Lead generation fraud is simply any form of invalid traffic (bots and fake users) that makes its way into a go-to-market funnel and, therefore, pollutes the company’s CRM or other databases.
What types of issues does this cause for businesses?
The presence of invalid users within a funnel can cause a variety of problems on the analytics, revenue, and operations fronts. Some examples of the harm created are as follows:
Inflated CRM Bills
Many CRM systems are priced based on the number of contacts. If all contacts in a given system are either customers or potential customers, then even relatively high bills might be deemed worth the cost. However, when a CRM is polluted by bots and fake users, the company ends up paying a premium for contacts that do not have the intention or ability to become legitimate paying customers.
Skewed Conversion Metrics
One of the many metrics that go-to-market teams rely on is conversions. This indicated the level at which site visitors are turning into leads or customers. But if invalid users are mistakenly labeled as legitimate leads, conversion percentages become skewed, and so does the organization’s picture of reality.
Wasted Sales Time
Sales teams often spend a lot of time nurturing and following up with leads in order to gauge interest and product fit and potentially gain a new customer. If bots and fake users end up occupying even a small percentage of a salesperson’s day, it not only is a waste of time, but it can also cost companies potential revenue because it reduces the amount of time they can sell to those with a legitimate interest. In fact, studies have shown that $115 billion in sales labor costs are wasted on invalid fake leads each year.
What can businesses do to prevent Lead Generation Fraud?
A good place to start is by sifting through existing contacts and removing any duplicates, bounced emails, or instances that look obviously fake. But in order to truly prevent lead generation fraud, companies must make an effort to stop it at the source by blocking bad bots and fake users from converting on forms and engaging with other website content. This is most commonly done through installing go-to-market security, which can automatically identify potential threats to organizational well-being.
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Author
Kerry Coppinger
Senior Manager, Brand Marketing
As head of the brand marketing department at CHEQ, Kerry manages all things content and brand including: research reports, public relations, content marketing, copywriting, press, and other editorial features. Prior to her work at CHEQ, Kerry worked for several tech companies in New York.
