On Lead generation: Insist on lead quality over quantity
Under increased pressure to help drive revenue in this challenging market, many of us are tempted to throw as many leads as we can to our sales team.
We can tell ourselves that more leads are better because it lowers the cost-per-lead and gives the sales team more activity. But don’t be one of those lulled by this false sense of security. If you really want to make a difference in your company’s sales, dig deeper. Focus on metrics that go beyond cost-per-lead, and more importantly, focus on quality first then quantity.
Do you know how many of your leads are actually impacting the sales pipeline? I’ve done numerous lead qualification programs that have shown that as little as 5 to 15 percent of all inquiries turn out to be truly sales-ready opportunities. And while there are other influences such as sales training and refining the lead handoff process, lead quality stands out as the single largest factor driving the real ROI of our lead generation programs.
The only way to ensure quality is to make sure that all leads, regardless of their source, meet the standards set by the universal lead definition. At its most basic definition, a lead is a potential customer who wants to learn more about what you have to sell and that has acknowledged they have a business problem you can help solve. Couple this definition with elements from the ideal customer profile and you have the beginnings of a meaningful lead definition. However, for the lead definition to be useful, it must be applied to all leads whether they are received from a webinar, a website, or from teleprospecting.
Creating the universal lead definition is a collaborative effort. When working with clients the first thing we do is facilitate meetings and bring marketing and sales leaders together. A universal lead definition (ULD) begins to take shape as we ask ourselves a few basic questions including: What makes a good sales lead? What are the job functions/titles of economic buyers/influencers? What information is necessary in order to qualify a prospect etc.? I’ll write more about this in a future post.
Once we’ve agreed on the Universal Lead Definition, we can begin to efficiently weed through the inquiries in order to discover the fruitful leads. Then and only then, can we begin to measure the cost of our efforts. But don’t get caught up with the cost-per-lead. Dig deeper. Cost-per-lead budgets are irrelevant unless you can first measure cost-per-opportunity or cost-per-lead-pursued by sales. Programs may generate many low-cost responses, but they don’t turn to opportunities at the same rate, making opportunity a critical metric.
Creating a lead qualification process that works is challenging, but don’t shortchange your sales team by focusing too much on cost at the front end of the demand generation cycle. You’ll fail to measure the impact on the generation of real opportunities. Closed loop approaches where marketers focus on optimal spending at each stage of the sales cycle minimize the frustration factor and save time, ultimately saving lots of valuable dollars. Focus on quality and make sure that all leads meet up to your sales’ departments standards and then… start nurturing!