The Missing Link to Marketing ROI: Lead Qualification
Lead qualification may not seem like a sexy topic, but it’s the key to lead conversion, sales and marketing alignment, and ultimately revenue. In numerous accounts I managed as a demand generation consultant, the solution to a lot of problems was to solve for lead qualification.
Let’s lay out the problem:
There’s a famous saying: “The enemy of every sales person is time.” Keep the following numbers in mind:
- It can take between 3-20 touches (phone calls, emails, etc.) just to connect with a prospect.
- A good lead conversion rate is 10-20%. That means that out of every 10 leads – 8 or 9 are not worth working on right now.
In other words, connecting with and qualifying prospects takes a lot of time. In addition, sales cycles take a lot of work. Once you get a qualified lead, it takes 5 or 6 sales steps to close the deal: Quoting, pitching, presenting the value proposition, negotiating, etc., together take the bulk of the day.
In the end, it’s not a good use of a sales rep’s time to do the work necessary to convert a lead to a qualified lead, and once 3-5 good deals are on their forecasts, they won’t want to divert their energies. And furthermore, you don’t want them to.
The solution is lead qualification, which I define as a multi-channel process including dedicated phone-based resources and automation designed to determine whether a lead fits the agreed-upon Qualified Lead definition and is so deemed ready to speak with sales.
There are five key success factors in effective lead qualification:
- Agreed-upon “qualified lead” definition
- Lead scoring (marketing automation)
- Lead nurturing (marketing automation)
- Dedicated phone-based resources
- A plan
1. How to define the “qualified lead”
Create a formal definition of a qualified lead that both sales and marketing agree on, that defines the moment at which a prospect is handed off from marketing to sales. Brian Carroll calls this the “unified lead definition.”
- Ask sales to characterize the ideal qualified prospect including company size, role, psychographic data (such as pain), deliverable (an appointment is an example of this)
- Counter- propose based on what’s possible to gather via phone
- Sign a “service level agreement” that makes clear the definitions and actions you’ve agreed on, including a follow-up plan from sales
- Send only send qualified leads that meet the definition of “sales-qualified” from now on
- Meet weekly to discuss progress or lack thereof
2. Lead scoring
Programmatically score raw inquiries based on both demographic data (for example company size) and activity data (e.g. clicked on the pricing page). Lead scoring is the first filter that allows organizations to spare expensive resources such as sales people from wasting their time.
3. Lead nurturing
This is a marketing process that uses content (offers, tools, whitepapers…) and distribution tactics (email, phone, retargeting…) to engage known prospects over a period of time until they become more receptive to sales.
In the old days – pre-internet, and pre-marketing automation – sales was responsible for following up with dormant prospects, which (remember our 1-20% conversion rate) was a giant time-suck. Leveraging marketing automation, marketing can hold onto leads longer and spare sales the agony of following up with unqualified leads.
4. Dedicated phone-based resources
A best practice for complex selling is to have a dedicated phone team following up on raw inquiries and turning them into qualified leads. If you have a face-to-face field sales team, then you have to follow this step. If you have a lower average selling price and adding an additional human touch cannot work, then you likely have an inside sales team doing all your selling.
5. A plan
Sit down and draw the process from raw lead/inquiry to qualified lead. Make sure you understand the human and mechanized processes involved. Generating a qualified lead is hard, and to be successful you will need to optimize. In order to optimize, you will need a standard set of practices as well as an understanding of the steps along the way.
Lead qualification will bring you the following benefits:
- Sales and marketing alignment
- The highest lead conversion rates you’ve ever seen
- Marketing ROI
Mark my words: Lead qualification will have sales begging you for more.