All Leads Are Not Created Equal: Why Lead Quality Matters
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All Leads Are Not Created Equal: Why Lead Quality Matters Lead generation is not simply a game of producing as
many leads as possible. That’s because not all leads are equally valuable. Even so, many companies focus on generating a large quantity of leads without regard to quality. This has three detrimental impacts: 1. Wasted resources. Companies waste money on campaigns and staff to generate and follow-up on unqualified leads. 2. Opportunity cost. Generating and following-up on those leads could have been spent on generating and qualifying leads more likely to turn into revenue. 3. Diminished Marketing credibility. According to BtoB Magazine, only 23% of sales professionals say Marketers consistently deliver sales-ready leads. With the high percentage of unqualified or otherwise problematic leads turned over by Marketing, Sales loses trust. They end up spinning their wheels trying to qualify “qualified” leads only to find they are really dead-ends. This creates interdepartmental tension that impedes the smooth functioning cooperation essential to an effective Lead Generation Program. This paper examines approaches that produce poor quality leads, and the right approach to generating higher-quality leads.
APPROACHES THAT PRODUCE POOR QUALITY LEADS There are several interrelated reasons poor quality leads end up in sales pipelines.
An inaccurate definition of “lead”—or none at all The word “lead” is too frequently used without its critical modifier: qualified. More specifically, the issue is whether a lead is a Marketing Qualified Lead (MQL)— sourced by Marketing and presumably only passed on to Sales if it meets a set of criteria agreed to by both teams. Unfortunately, only 50% of companies surveyed say their Sales and Marketing functions have a formal definition of a qualified lead, according to CSO Insights. CONTINUED ON NEXT PAGE >
Unfortunately, only 50% of companies surveyed say their Sales and Marketing functions have a formal definition of a qualified lead.
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All Leads Are Not Created Equal: Why Lead Quality Matters A lead that has not been qualified is just a name in a database or on a business card. It reveals nothing about that person’s interest in, or ability to, purchase from your company or at least influence a purchase decision. Without that knowledge, it is not even worth turning over to Sales to qualify further. But it happens — a lot. According to MarketingSherpa, 61% of B2B marketers send all leads directly to Sales and only 27% of those leads will be qualified.
Qualified perhaps, but not Sales-ready A critical mistake made by both the Sales and Marketing departments at many companies is handing over a marginally-qualified lead directly to a sales closer.
A critical mistake that both the Sales
This is often a result of mistaken logic that a good closer can close just about anyone, so it’s worth a shot. But this is rarely true, because even if a suspect meets most of the qualification criteria, it doesn’t mean they’re ready to buy. A 2010 Gleanster Research study found that as many as 50% of qualified leads are not ready to buy.
and Marketing
This is an enormous waste of a good closer’s limited bandwidth—bandwidth the closer should instead be allocating to leads that have been sufficiently vetted, usually by inside sales representatives.
make is to hand
Activities related to prospect qualification can be confusing. Just because a suspect downloads a dozen white papers from your website and attends an online product demo doesn’t necessarily mean they’re a viable MQL.
The wrong size net The specific methods companies choose to generate leads changes the perception of how widely a net needs to be cast. Telemarketing, for instance, is generally a slower, more labor-intensive (thus more expensive) approach to lead generation—though it can identify high-quality leads through productive conversations. CONTINUED ON NEXT PAGE >
departments at many companies
over a marginallyqualified lead directly to a sales closer.
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All Leads Are Not Created Equal: Why Lead Quality Matters But because telemarketing is not a volume play, companies doing telemarketing often narrowly constrict their target list to, for instance, the largest customers in their target industries or only C-level decisionmakers. In some cases, the list is narrowed to the point where it leaves out potentially lucrative opportunities. These “big fish” targets are always harder to catch, so even if they’re “qualified,” they simply may not be attainable. Even so, many companies will try to “stretch” qualification criteria and engage in sales cycles with these leads whenever possible. At the other extreme, digital marketing universally casts a wide net. In fact, the size of that net can’t be controlled once digital assets are available “in the wild.” The result can be too many leads to process efficiently and often most of them will be unqualified.
Incorrect incentives People do what they’re financially motivated to do. When Marketing or Inside Sales Teams are given incentives to generate a certain number of leads, they will do their best—but they may also be looser when it comes to qualification criteria.
Database issues A database of some sort resides at the heart of most B2B companies’ outbound lead generation machines. By definition, then, the quality of leads generated cannot be better than what’s in the database. Companies commit a range of mistakes with their databases, ranging from: • Failure to promptly remove inaccurate prospect records • Too few records to run the scale of campaigns necessary to meet revenue targets • Old data that doesn’t reflect current job titles or companies • Poor documentation of previous interaction history • Incomplete or missing data Database development is never “done.” New records need to be continually added and all records need to be continually cleaned to prevent “junk” leads from surfacing. CONTINUED ON NEXT PAGE >
People do what they’re financially motivated to do.
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All Leads Are Not Created Equal: Why Lead Quality Matters DETERMINING YOUR DEFINITION OF “QUALIFIED” Companies vary tremendously in defining their qualification criteria. There’s a clear trade-off: the more criteria you employ, the fewer qualified leads — but the higher quality those leads will be. No model works for all companies, but this section outlines some key factors to consider.
Establish the Basics At the highest level, you may want to qualify leads based on a prospect’s industry, geography, company size, job title or level. The key is not to be overly restrictive here, unless it’s absolutely necessary. For example, you may want to target large companies because you think your products will command high average selling prices there. But the largest companies tend to be the hardest to win, so this limits your market opportunity. You might feel you should shy away from smaller companies, but a fast-growing small company might offer you more long-term upside than a mid-sized company that isn’t growing at all. The same is true with job titles. What one company calls a Director, another might call a Vice President. Keep your target entry points as broad as possible, such as “people in the IT department.”
Get Personal What’s most important is mapping out the kinds of people who are going to be your key decision-makers, influencers, and evaluators. These individuals may be in multiple departments, and at multiple levels within an organization. It’s important not to disqualify one of them because, for instance, they’re clearly not a decision-maker when they are an important influencer. Someone has to test your product. Someone has to approve budget for purchasing your product. Someone has to choose your product over a competitor’s. All of these “someones” may be qualified contacts. CONTINUED
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Someone has to approve budget for purchasing your product. Someone has to choose your product over a competitor’s. All of these “someones” may be qualified.
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All Leads Are Not Created Equal: Why Lead Quality Matters Another approach is to describe your best customer. Beyond job titles and roles in a purchasing decision, what makes a good customer for you? Demographic and psychographic factors can be useful here, but in a B2B context, the more important issue is understanding what personal buyer qualities drive the sale initially, and what personal qualities keep customers loyal to you. Being able to discern this requires historical data, which new companies or established companies pursuing new markets will not have. It is not always easy to discern in a qualification process, though questions about pain points are a start.
Understand their Buying Journey In addition to identifying decision-makers, evaluators and influencers, it’s important to dig deeper into understanding their roles in the entire decision-making process. Ultimately, it’s about understanding the pain points that lead target companies to make purchase decisions. With that framework of understanding established, it’s easier to qualify prospects against those pains. Understanding this doesn’t just help with qualification; it helps with targeting the right people at the right point in their buying journeys. This can lead to more and better-qualified leads, make a more efficient use of marketing budgets, and help ensure higher close rates.
WHAT YOU SHOULD DO In an ideal world: • Marketing should only pass genuinely qualified and sales-ready MQLs to Sales • Sales should then only focus on further qualifying and closing those leads • Otherwise qualified leads that are not ready to buy should be nurtured CONTINUED ON NEXT PAGE >
... the more important issue is understanding what personal buyer qualities drive the sale initially, and what personal qualities keep customers loyal to you.
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All Leads Are Not Created Equal: Why Lead Quality Matters To do this:
Get Sales and Marketing Aligned on Definitions First, define an MQL carefully using the previous section as a starting point. Make sure both teams agree on their definitions of Marketing Qualified Lead (MQL) and a Sales Accepted Lead (SAL).
Determine What to Do with MQLs and SQLs that Aren’t Sales-Ready Just because an otherwise qualified MQL is not ready to buy today, that doesn’t mean they never will be. Likewise, a qualified lead that made it to the SQL stage but didn’t close may still become your customer someday. Every company needs a plan for keeping these leads warm. Usually, this means nurturing them.
Establish a Feedback Loop The Marketing department needs to understand the specifics of why Sales rejects leads. Do the definitions of MQL and SAL need to be tweaked? Or, did something break down in terms of process or communication? Either way, periodically reviewing the flow of leads from Marketing to Sales and making adjustments as necessary will improve the productivity of both departments.
CAVEATS Working with a lead generation partner can help you avoid many of the pitfalls of sourcing quality leads and creating the right approach to gathering higher-quality leads. SalesStaff does the heavy lifting of: • Working with you to develop your ideal prospect profiles through our proven discovery methodology • Building and maintaining a clean, updated database of prospects who match those profiles CONTINUED ON NEXT PAGE >
The Marketing department needs to understand the specifics of why Sales rejects leads.
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All Leads Are Not Created Equal: Why Lead Quality Matters • Designing and executing outbound and inbound strategies to attract those prospects using our own staff and infrastructure, based upon messaging that will resonate with each of your target personas • Thoroughly qualifying each prospect against your prospect profiles, and setting appointments for you only with prospects who are thoroughly vetted and sales-ready • Nurturing all other qualified prospects to keep them warm When you hire an organization like SalesStaff, you get the benefit of our experience with thousands of marketing campaigns we have worked on across every industry, targeting every decision maker out there and an internal database that we cultivated as a who’s who—all for the benefit of our clients. Our 100-Day Pilot Program gives you the opportunity to try us out before investing in a long term commitment. With our proprietary AllBound360SM strategy encompassing inbound and outbound marketing, we customize our approach to the needs of your company so we can deliver you the most exceptionally-qualified prospects. Let us generate revenue for you through highly-qualified lead generation.
When you hire an organization like SalesStaff, you get the benefit of our experience which includes an the thousands of marketing campaigns we have worked on across every industry ...
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