Tracking the true source of your leads

As most marketers are looking forward to 2008 through their budgetary planning process, chances are they're also looking back at how well certain activities performed. How can you plan for 2008 if you don't know what types of marketing activities worked in 2007?

I was chatting with a peer of mine recently about lead source and the hows and whys of tracking where your leads are coming from. Here's a recap of our conversation and my thoughts on the topic:

1) Lead source should tell you how the lead found you - Did they click on a paid search engine listing or cruise by your booth at a tradeshow?
2) It should be limited to 20 or so high level categories which cover the most common types of ways that people find your organization - e.g. Paid Search, Organic Search, Banner Ad, Tradeshow, etc.
3) Report on your lead source values and how they're performing at all phases of the conversion funnel, e.g. conversion to qualified lead, opportunity and closed business.

I know a lot of people want to create a new lead source everytime they launch a new campaign, especially people who are using salesforce.com's Professional Edition and who don't have campaigns, however I urge agaisnt this.

Consider instead creating a custom field called Campaign source. Make sure you use a consistent naming convention like YYYY QQ Campaign Type - Creative version, e.g. 2007 Q4 Email - Candy Cane. Makes reporting a lot easier later.

Finally, the lead source shouldn't necessarily tell you what they did, but how they found you. It's just as important to know that they came from a paid ad, as it is to know that they signed up for a free trial. My peer disagreed with me - she thinks that if they came from a Webinar, then the lead source is Webinar, whereas I wanted to know how they found out about the Webinar as well as the fact that they registered and attended. I'll leave it up to you to determine how you use lead source in your demand generation program.

Next up...lead action - tracking how your leads interacted with your company, and how that differs from lead source.