Increased Focus on Lead Quality Drives Increased Conversion, ROI and Revenue Growth
At the end of the day, you follow the money.
I often say that when talking about the challenges of generating B2B leads that convert to closed business.
It’s such a constant headache for B2B Marketing and Sales that by now everybody knows the daunting stats — only about 5 percent to 10 percent of B2B leads ultimately result in a sale. And the situation doesn’t seem to be improving. The 2019 Chief Marketer B2B Marketing Outlook survey reports that 55 percent of respondents said finding leads that convert is a huge challenge for their Marketing teams.
Interestingly, only 19 percent of respondents said the cost of creating new leads was a significant hurdle.
Those two stats say a lot about the problem, I think. Marketers are great at cost-effectively engaging prospects at early stages of the funnel. But they tend to struggle when it comes to that last mile of qualifying leads as being genuinely ready to be passed off to Sales.
Like any Sales executive, I consider this a big problem. I’ve written about this “misalignment” between Marketing and Sales before, suggesting that at least part of the solution is to tie Marketing’s overall performance metrics to revenue.
In this post, I’m going to suggest a few tactics to finish that last mile of successfully moving a lead from Marketing to Sales. You won’t be surprised to learn that many of these include more demanding criteria for Sales readiness. But along with raised standards, I think shuffling some resources into high-touch pre-qualification programs will help Marketing not only send better leads to Sales, but also optimize its own resources for nurturing leads throughout its pipeline.
Not Every Lead is Created Equal
Before I go any further, let me be clear – I am not just some Sales VP here to say that poor conversion is all Marketing’s fault. I’m aware that Sales drops the ball on perfectly ripe leads. It’s up to Sales to close the deal, and that reality must be reflected in the overall metrics a company uses to measure the success of its Marketing and Sales efforts.
But for its part, Marketing has to set and adhere to higher standards for leads that it to passes to Sales. For that matter, the bar needs to be set higher for lead qualification at all advanced stages of the purchase journey.
In many businesses today, an “active lead” is just anybody who has engaged with the company.
As this article at Business 2 Community puts it –
“… this generic definition has resulted in a serious decline in lead quality at the beginning stages of the sales cycle, which inevitably translates to poor quality leads all the way down the funnel.”
When a lead comes in at the top of the Marketing funnel, it’s a hand-raiser and nothing more. Throwing a Marketing lead over to Sales just because it responded to an email and downloaded a piece of content goes nowhere.
And yet, it keeps happening.
Focus on Revenue Brings Clear Focus
There’s a lot of buzz in the trade press about how conventional definitions of lead-readiness are outdated and need to evolve to focus on revenue. Search on the phrase “MQLs are dead” and you’ll find a lot of speculation about the future of Marketing KPIs.
While I am 100 percent in on revenue-centric focus, I think much of this buzz will prove to be overstated – Marketing is always going to manage its own pipeline, and there will always be a need to set quantifiable goals and standards, regardless of how you label them. Certainly, the notion of MQLs and SQLs have been undermined by just pushing poor-quality leads down the pipeline. So, I think MQLs and SQLs are definitely ill at this point, but with some work they can get better.
Part of the needed change must come from the top. The C-Suite needs to push for Marketing KPIs that include conversion and revenue as well as pipeline benchmarks.
When conversion becomes the ultimate, clear goal of the entire Marketing and Sales process, finding such leads wouldn’t necessarily be easier. But it will get a lot of resources that are now devoted to shoveling leads into the top of the funnel.
Again, let me be clear – Marketing will always need to create quality leads at all stages of the funnel, and that includes at the top. And tried and true tactics like email, when smartly targeted, are not going out of style. In fact, Chief Marketer survey respondents ranked email as the channel that initially produces leads that result in the highest ROI.
ROI, of course, indicates that a good chunk of the leads ultimately converted.
Follow the money.
What Makes a Lead Genuinely Sales-Worthy?
The attributes and behaviors that indicate a lead is likely to convert and is ready for Sales vary from business to business, of course, and should be set collaboratively by Marketing and Sales. But there are some factors that must be addressed in any Sales qualification criteria.
Need to Purchase
The simple expression of interest in your product or service is just the first step in a lead’s journey. Before being passed on to Sales, a lead should express a real need to purchase, and you should know the pain point the purchase will resolve. Knowing what the lead really needs to accomplish with this spend is critical for Sales close the deal.
It’s hard to believe but leads that come into Sales often don’t have the budget to make a purchase decision. I’m not saying that they don’t have the authority over the budget to make the call – there’s literally no money to spend. Hard to convert those.
Meaningful Buyer Personas
Many Marketers still don’t have a tangible picture of what a promising future customer looks like. And these are essential. A survey by Cintell found that 26 percent of companies that missed revenue targets have no personas in place. Compare that to 71 percent of companies that exceed revenue expectation have clearly researched and documented buyer personas.
Moving Past Education
If a lead might find value in a whitepaper explaining the general benefits of your product category, it isn’t ready to be passed onto Sales yet. Keep nurturing and qualifying until they are ready to talk about the specific merits of your solution.
In addition to positive attributes, Marketing needs to research and document behaviors that indicate a lead simply is not likely to convert, and so does not merit the investment needed to move them down the funnel or ultimately turn them over to Sales. These disqualifiers will be largely specific to your business and need to be determined through research by both Marketing and Sales.
As you’ll notice, only one of these criteria, buyer personas, has specific impact on initial engagement (or at least it should) for smart list segmentation and targeting with support from marketing intelligence such as our InsightBASE intent monitoring platform). The rest define the nurturing, and sometime culling, of leads as they move along the funnel toward Sales qualification.
So, these criteria may not ultimately improve the overall conversion rate of all the leads that enter your funnel. But they certainly argue for shifting some resources to lead qualification, which will result in better ROI on your overall Marketing spend.
And that’s what it’s all about.
High-touch Qualification is Worth the Investment
Obviously, it would take a ton of email cycles to discover some of the criteria I’ve listed above.
At most businesses, the task of pre-qualifying leads with a phone call falls to an inside sales team. But I’m increasingly inclined to think that Marketing should include high-touch contacts, such as voice, before moving leads to Sales-qualified status.
Our COO Craig Weiss has written often about the value of voice in B2B marketing. A smart call script can determine if a lead is best suited for further nurturing with educational content, or if they are primed to buy and should be routed to field Sales immediately. We definitely encourage our content syndication program customers to include voice in their demand-generation programs. Quick wins are a great way to show immediate ROI and prove the value of any marketing effort.
Internally, we at True Influence are working with an BDR outsourcing partner for pre-qualification calls to leads for our own Sales efforts. It costs more than generating a few more high-funnel leads, but it’s proving well worth the investment in ensuring our Sales bandwidth is used to its best potential to close business.
And – this is critical – it’s a cooperative effort between Sales and Marketing. Our CMO Kay Kienast and I worked together to set the key criteria that establishes a lead as Sales-qualified while designing the program.
Ultimately, it doesn’t matter who makes the phone call, if the standards and goals are clearly focused on verifying the quality and readiness of the lead. But, again, I think programs such as this are a great way for Marketing to ensure that it’s meeting performance goals that include conversion and revenue.
It’s All About the Money
Businesses are increasingly focused on revenue as the ultimate standard for all Marketing and Sales initiatives. And that’s how it should be. Shifting focus and resources to more rigorously qualifying leads for Sales readiness and nurturing programs will result in higher ROI on Marketing programs and better collaboration with Sales. Everybody wins.