Are you Generating Qualified Leads or Wasting Marketing Dollars?
If you ask a dozen marketers and sales people for their definition of a qualified lead, you might hear answers ranging from “anyone that’s breathing” to “someone ready to buy today.” Obviously, there is a wide gulf between these two extremes, especially if the definitions come from people working at the same company. This issue often comes to a head when the marketing manager brags about all the qualified leads and the sales manager says something like, “Yes, there a bunch of leads coming in but they stink” (often expressed in more colorful terms).
There are several different methods for calculating lead quality. One of the more familiar is the BANT formula, which stands for: for Budget, Authority, Need and Timeline. In other words, if you determine that an individual or company has a need and the funds to buy what you offer, is willing to purchase in a reasonably short time frame (e.g. within 3 months), and you have access to the decision maker, it is by definition a qualified lead.
Note that just because the lead is qualified doesn’t mean you are going to get a sale. In most industries, the vast majority of qualified leads do not close. But you still need to have an established and quantifiable way to evaluate lead quality – otherwise you will be subject to the strictly subjective views of the sales department.
Regardless of how your company measures lead quality, here are some actions you can take to make sure that a larger percentage of your leads are qualified:
- Quantify your lead requirements. It is amazing how many marketing and sales managers can’t answer the simple question: How many sales ready qualified leads do you need? But if you don’t know the specific number you need, how can you be sure you don’t have enough, or have too many? Click here for a brief article on how to calculate your target number of qualified leads.
- Implement a lead qualification/nurture process. There may be a good reason that the sales reps think your leads are no good – because in fact, many inbound leads are unqualified. While field sales reps are good at closing business, they are not usually proficient at turning raw inquiries into qualified leads. If you throw your sales team a bunch of inbound inquiries and force them to wade through the chaff to get to the wheat, you will often have disappointed reps on your hands and leave marketing with a bad reputation. Even worse, qualified leads go ignored and the money and effort you spent attracting them are wasted.
- Let prospects qualify themselves. Those who have read my blog on a regular basis understand that I am a huge fan of pull marketing. The idea behind pull marketing is to get prospects who are interested to come to you instead of you chasing them. This means that your website and online efforts do more of the heavy lifting and you are spending less time and money on push marketing methods (calls, emails, direct mail, advertising, etc.). Pull marketing requires that you attract larger numbers at the top of the marketing funnel. When you do this right, sales cycles decrease and close rates go up. And you certainly hear less grumbling from sales about the lack of qualified leads.
- Quickly follow up every inbound inquiry. By quickly, I mean that you should follow up every lead within 48 hours, and if possible, 24 hours. Inbound leads tend to have a short shelf life and the individual who yesterday thought your product was the greatest thing since sliced bread, may not even remember who you are today. This is such an important topic that I wrote a blog post about it titled: Sales Lead Management: Are You a Victim of Failure to Follow-Up.
If you are interested in reading more about the subject of lead qualification, I recommend a recent article by Daniel Burstein titled: Intro to Lead Generation: How to determine if a lead is qualified?