If you ask marketing professionals; salespeople and executives in the same organization to define a qualified lead, would they have the same definition? Probably not.
According to a 2014 CSO Insights’ Sales Performance Optimization Analysis report, only about 50% of organizations have a formal definition of a qualified lead that both marketing and sales adhere to.
Also, 31% of survey respondents only had an informal definition in place while 19% had no meaning at all.
This is where companies get in trouble.
Not using a standard definition takes a negative toll on lead conversion rates.
It’s no surprise that the report revealed that only 34% of companies with no formal definition were able to advance a lead to a first discussion more than half of the time.
Marketing, sales, and management have to share a unified definition of what a qualified lead is if lead generation is to succeed in a B2B company.
The marketing team stands a much better chance of generating quality to the sales department if there is agreement from the start with all parties on what qualified leads are.
With marketing, sales and management all speaking the same language regarding what qualified leads are, it will likely boost sales and revenue because everyone can pull together to target and nurture the right leads for the company.
The bottom line is organizations that formally define the term “qualified lead” will likely connect with prospects more often – 63% of companies with clear definitions were able to advance a lead to a first discussion more than half of the time according to the same report.
When it comes to leads, we at LinkedStrategies understand the need for clear and concise definitions, so in this section, we’ll break down the fundamental differences between a Marketing Qualified Leads (MQLs) and a Sales Qualified Leads (SQLs).
But before we get into it, what really is a Qualified Lead?
Though the definition of a qualified lead is different for each company, the general definition is: a prospective customer who matches a company’s ideal buyer profile in terms of need, budget, timing, as well as other factors.
To determine if a lead is qualified, these general questions need to be answered:
Additionally, a more detailed criteria may be needed to define qualified leads at some companies. So it will take some work to define the meaning of qualified sales leads for your company.
Marketing Qualified Leads (MQLs): a lead that is seen as more likely to become a customer compared to other leads based on lead intelligence and analytics.
In any funnel there are two basic types of leads:
Prospects: enter the funnel is to research and genuinely determine the fit of your solution with their needs.
Suspects: will enter your funnel for reasons besides any intent to buy.
The ultimate goal is to find out who’s really interested in buying. Therefore the key will be differentiating between those who are wasting your time and those who could be sales ready soon.
Sales Qualified Leads (SQLs): is a prospective customer that has been researched by the marketing department and then vetted by the sales team. Marketing makes the initial contact then sales picks up exploring their interest and capability to purchase.
If they have problems that fit the solution being offered, they are added in the sales queue and are deemed “qualified” as a viable prospect.
Now let’s compare that to an unqualified sales lead.
With help from nurture campaigns, leads can transition from one category to the other.
I don’t know about your company, but dedicating resources and attention that might be better used on qualified leads already in the sales pipeline, to pursuing unqualified leads, dilutes our attention at LinkedStrategies.
That’s the case for most B2B companies unless you’re blessed with the enviable privilege of an unlimited budget and time of course.
So how do you identify when a lead is unqualified?
A lead is unqualified when it doesn’t meet all, or even some, of your identified criteria for moving the lead along in the sales process.
Below are characteristics of unqualified leads:
One of the most frustrating experiences for sales is to spend time on a prospect only to realize that it’s a waste of time. You don’t want to waste company resources and attention on unqualified leads.
So how do you sniff them out?
This is akin to a horrible first date that thankfully ends early. Short sales calls are a surefire sign that interest isn’t there and are usually from leads which should’ve never warranted a phone call in the first place.
Reasons for short calls:
If your leads are reluctant to move forward in the sales process, it’s usually a result of one of the following:
However, after receiving more detailed information through the first conversation or email, they may resist taking the next step because they’re unsure if you can solve their problem.
A prospect’s budget is a critical indicator of whether or not they are a qualified or unqualified lead. However, it’s difficult to decipher the prospect’s budget without having that initial conversation.
For example, if your prospect’s budget is half of what your service or product costs it’s bound to be a difficult sell and most likely will end up in a short first call. Again, this comes down to the messaging on your website.
One of the most effective solutions for this problem is to include a clearly-defined pricing page on your website. Your pricing doesn’t have to be exact. You can give them a range, cost expectations, or budget requirements.
Many companies don’t do this out of fear of scaring away some visitors. But if the goal is to drive only the most qualified leads to your sales team, your prospects should know what to expect from a pricing standpoint.
Allowing them to qualify themselves means you don’t have to waste time finding out that they’re unable to afford the service/product you offer.
One of the worst things a salesperson can hear after speaking with a prospect for 10 minutes is… “So, how much does it cost?”
Sometimes prospects who do this are just price-shopping. They may just be trying to get another price to satisfy their decision maker’s wishes of receiving pricing from a few different sources.
Most times, the prospects engaging with your brand aren’t the decision makers at their respective companies. This will be the first contact in the majority of sales, so this is not alarming.
However, if that prospect is reluctant to bring their boss or a decision maker into the fold, it can be a sign that they are just searching for information or they have yet to identify a real problem within their organization.
It’s imperative that salespeople spend their time with the right people as your selling time is equally as important as the potential buyer’s time on the other end of the phone or across the table.
If there’s a constant re-occurrence it’s likely you don’t have a good lead generation program in place.
Below are some of the most common reasons why you might not be not generating qualified leads:
If you’re getting inundated with low-quality leads chances are you don’t have a lead qualification process. What safeguards do you have in place to weed out low-quality leads from the outset? Implementing a great lead qualification process early on will save you time.
To determine if this sale is likely to convert, you need to make sure you are asking the right questions. After doing that, set up a ranking system to separate the leads with the most potential from those who seem unlikely to make it through the sales funnel.
This will save you and your team from wasting valuable time on the wrong people.
It can be overwhelming responding to the many inquiries you receive. But if your team isn’t doing it promptly, sales will suffer.
While automated replies are great to confirm that you have received their request, people prefer to interact with an actual person.
Imagine being all excited to finally find a company that can solve your problems, you do all that’s needed on your end, but you hear nothing back for days. When you finally hear from them, whenever that is, all the thrill has worn off…..in fact, you might’ve already moved on to a competitor.
Ensure you aren’t doing this to your leads!
So tighten up your follow-up process…if you don’t, your competition will.
The way you craft your content has a lot to do with the type of prospect you attract.
So is your content crafted to grab the attention of those making the buying decisions?
Is it tailored to who can afford your products/services?
In the B2B world, content marketing is not about just writing about things you like or find interesting. It’s all about crafting content for the right audience, who are decision makers who, mostly don’t even consume much content anyway.
You’ll have to practice some empathy – put yourself in the shoes of your ideal lead. What are they looking for? What would be of value to them?
Create useful content that appeals to all these inquiries and makes sure you are placing it where your desired audience will see it.
Now that we have identified what unqualified leads are, now should you follow or forget?
The practical thing to do is to forget about them…..they won’t buy, right? Well, don’t be so fast to ditch unqualified leads.
If the lead meets certain parameters to be considered a suspect, even though they aren’t qualified at the moment, it doesn’t mean things can’t change in a moments notice.
One day you could be speaking with a decision maker who could actually afford your solution but doesn’t need it at that moment only for them to revisit your offer weeks later after being inspired by a “trigger event.”
A Trigger Event is when something happens on the prospects side that makes them realize they need a solution. All prospects have “trigger events” and its the only thing that will make a lead “warm”. They become hand raisers, and you’ll be ready to help when they need it most.
Have a consistent drip email marketing campaign in place for prospects that might not measure up to having all the needed criteria for qualification at the moment, but you will revisit at a later date – something like a “catch and release” in fishing.
You throw them back into the ocean and let your drip email marketing take over and when a trigger event occurs, they contact you. This way you stay in contact with them without putting a strain on your time and resources that are better utilized on qualified leads.
But qualified leads are what you want to spend your time on, so how do you filter out unqualified leads and more effectively identify qualified sales leads?
Once you classify a lead as unqualified, you need to revisit its ability to meet your criteria or document its missing standards and put it through a lead nurturing process.
You can develop a sales process to increase your lead qualification efficiency and decrease your opportunity costs.
When you first establish contact with a lead, it’s critical that you have a thorough and robust first contact filter to determine the lead’s qualification.
You should ask these questions in your first contact filter:
When these initial lead qualification questions are properly answered, your time will be more effectively spent with the most qualified leads after your initial conversation.
Not only does this save you more time later in the sales process, but it also fills your sales pipeline with only viable opportunities.
To help you sort between unqualified and qualified leads, you should apply additional lead qualification filters.
Buyer personas are essential to the B2B sales process. So before you start qualifying leads, you first need to determine the characteristics of your ideal buyer.
To deliver more qualified leads to sales, your content strategy should be built upon detailed, accurate buyer personas.
After fully defining your buyer personas create content that will resonate with them at each step of their buying process. Define personas and map your content and editorial calendar to the personas and their buying stages.
Then, during the lead qualification process, measure each potential lead against your buyer persona sketch.
The BANT acronym stands for:
Your sales team should pay particularly close attention to a lead’s timing requirements for your product or service.
Determining the project timeline is critical to closing the sale effectively because if a lead’s timeline is more than a year out, then he or she is not as qualified as other leads with a timeline closer to the present.
No particular general criteria can determine a qualified lead for your company as well as you can, so you should develop your own set of custom criteria that qualify leads for your company.
This final, customized lead qualification filter will ensure that sales leads aren’t just generically qualified, but uniquely qualified for your business.
An essential component of the lead qualification matrix, lead scoring is an effective method of determining qualified that are ready for sales follow up. To score a lead, assign points based on how well the prospect meets each of your lead qualification criteria.
Consider creating a glossary of terms defining a “suspect,” a “prospect,” an “inquiry,” a “response,” a “qualified sales lead,” a “qualified suspect,” a “qualified prospect” etc., as it relates to your company.
As I mentioned above, sales, marketing, and management all need to agree on the definition of each term to avoid confusion.
By following this lead qualification process, you won’t only keep your sales team busy with the work that matters most – generating revenue, but they’ll stop wasting time pursuing leads that don’t turn into closed sales.
When it comes to lead generation numbers can often be misleading. There’s nothing that boosts the morale of marketing teams more than seeing an upward surge in the number of leads graph.
We’re inclined to always value quantity, but it’s the quality of leads that have a real impact on your business. Qualified leads are the quality leads, and they are what you want filling up your sales pipeline.