Determining Good Leads From Bad
The continued success of any business relies on constantly finding new and returning customers. Whether these are individual customers or other businesses, sales acquisition is a sustaining force.
Unfortunately, it is all too easy to treat lead generation as a numbers game. Quantity over quality is a rule many businesses follow, much to their detriment. Trying to get as many leads as possible is one of the worst philosophies to follow. Why?
Not all leads are created equal. Some unqualified leads will only result in a dead-end. Other qualified leads may then be neglected or missed in the process. To make your lead generation process most effective, you need to know how to tell the difference between the good and the bad.
Good Vs. Bad Leads
A good lead is someone who has the capability and motivation to do business. For individual customers, these are the people who fall within your typical or target market and are most likely to buy your products or services. For B2B lead generation, these are individuals within other companies who have the means, decision-making power, and interest to do business.
A bad lead is anyone with a low probability of converting into a sale. These are people with unrealistic expectations or budgets, lack of a concrete timeline, or even an ambiguous understanding of what they need and how your business may be of value.
The best lead generation process actively works to filter the good from the bad. When you identify a qualified lead, you can take the necessary steps to begin the conversion process.
When you find a bad one, however, you have a choice to make. Ignore the bad lead and move on or spend a little bit of time nurturing this lead to see if you can increase the possibility of a conversion.
So how do you tell the good from the bad?
Lack of Communication
Communication is the foundational component of lead generation. You gather information and begin to build a rapport with potential leads through communication. You can also begin to assess the qualifications of a lead, whether you communicate through digital or traditional means.
Think of the lead generation process like a conversation. People who are engaged in a conversation show interest; they ask questions, they easily respond, and they participate. A lead who doesn’t actively respond or engage with your messaging and content is less likely to be interested or promising.
If it takes work to communicate with the lead, you need to reassess your efforts. Another form of communication may be warranted, or you may decide to move on. Either way, don’t try using the same communication techniques to get an unresponsive lead.
Lack of Means
Another important area to assess a potential lead is their means to do business. In other words, can they realistically buy your product or service? This will vary depending on the type of business and lead, but things generally come down to financial power.
What Is Their Budget?
Oftentimes, bad leads will have unrealistic expectations about the budget. If they find your prices too expensive, the only way you may convert them is with deals or price cuts that will harm your bottom line. More importantly, these steps will also undercut the value that you are marketing to potential customers.
If a lead cannot realistically buy your products or services, there’s very little you can do to accommodate them without doing harm. In these cases, the best approach is to simply cut them loose if you can’t be accommodating.
Lack of Decision Making Power
The most important question you can ask when assessing a lead is, “Who is in charge?” This is often more relevant in B2B lead generation, but also comes up with individual customers as well. For example, many industries that deal with younger markets, such as the toy industry, routinely have to assess who has the ultimate authority to buy a product.
For lead generation, you have to determine if the person you are pursuing has the authority to actually make a purchase. Bad leads are individuals with little to no power.
In these cases, you can either cut and run or try to use this person as a way to connect with someone with more authority. In B2B lead generation, this person may be in touch with people higher up the hierarchy who can get the wheels moving on a potential sale if they are interested.
Ultimately, decision-making power should be one of the earliest things you assess. Resist the urge to waste your time with someone with little authority if the lead will potentially go nowhere.
The first step to separating good from bad leads is to filter and assess any information you gather ahead of time. Typical lead generation processes gather information from a number of sources, including general communication, online forms, and user account information from websites and social media platforms.
This generally accumulates into specific demographic information like name, occupation, industry, education, etc. Most of this information won’t be useful in the assessment process, but pay attention to anything related to the industry and marketplace of your business.
If a person works at a company you’re interested in doing business with, they may be worth pursuing. Similarly, if they have a job in the same industry or a certain expertise, they may also be a good candidate.
Bad leads will have little to no information that connects them with your business or industry. Focus on personal information from communication to assess the lead as you move forward.
Assess Leads with Lead Scoring
One way to assess a lead is to grade them. Lead scoring is a form of assessment that looks at several different key areas to determine whether you have a promising leader. Points are assigned based on how well the potential lead meets each criteria.
An industry standard form of lead scoring is known as the BANT method. Standing for budget, authority, need, and timeline, this method maps out four important categories for you to assess the potential lead. Using this method, you will look at their declared budget, their authority to make a purchase, their specific need for your products or services, and the timeline.
The specific scoring is up to you to decide. You can use a simple scale like 1 to 10 or 1 to 5 to assess how each lead falls within each category. People with a realistic budget, the authority to do business, an expressed need that fits your offerings, and a timeline that works well with your business should score higher.
Pursue the leads with high scores to increase your chance of success for a potential sale.
Finally, lead nurturing is the process of spending some time to convert bad leads needs into potentially good ones. It is a process that requires a hard choice to make. When you have identified a bad lead, should you cut them loose or try to convert them with a little extra TLC?
It’s important to realize that lead nurturing isn’t necessarily traditional marketing. Instead of actively selling your products and services, lead nurturing is equally about education.
Bad leads often have a lack of important information when expressing an interest in your business. When they are assessing whether or not to buy your goods and services, this information is important for both parties.
This means you may have to both educate and persuade them to turn them into a potential sale. This should be done throughout the stages of your sales process. Content and communication are key.
You can nurture bad leads needs through traditional forms of marketing, such as online, mail/email, and inbound channels like website content and blogs. The personal communication with your sales team and staff should also focus on providing the necessary information.
Keep in mind that there’s a fine line between nurturing a lead and wasting your time. If you fail to see improvement with the bad lead, don’t hesitate to reverse course and focus on more promising leads.
Making It All Work
The most important thing to keep in mind is that lead assessment is an ongoing process. Even when you have found a lot of potential leads, it is essential to assess the quality of them. The worst thing you can do is waste time with an unqualified lead without any hope of a conversion.
If you decide to nurture a potential but hesitant lead, continue to assess its status over time. If you don’t see progress while going through the stages of your sales process, don’t hesitate to cut them loose.
Focusing on good, qualified leads is the best approach to take for success. Begin assessing and filtering as soon as you can in your lead generation process.