Marketers: Your Sales Team Needs Leads, Not Inquiries
Related: Never Say These 7 Things in Sales
Our topic was the challenges facing marketing and sales teams. One of many marketers' biggest mistakes, we all agreed, is their assumption that inquiries are the same as leads.
But this is not only a misperception; it drives a wedge between marketing and sales.
Both teams, after all, work hard to drive growth for the company. Yet research shows that much of that effort is going to waste: Some 71 percent of inquiries are completely wasted, and 36 percent are never followed up on.
The point is that when marketing simply gathers up new names from contact forms and sends them over to sales, no one wins.
I know what I'm talking about, having spent the first five years of my own career in sales. When I moved to marketing, I committed myself to two things: making marketing accountable for driving quantifiable business value. And helping marketing to partner closely with sales.
I then spent about half of my marketing career creating, tweaking and optimizing the demand-generation process, most recently for the world’s largest software company.
In the process, I managed to accomplish both of my goals. We delivered a solid return on marketing investment. And we accomplished this by focusing on giving our sales-team members what they wanted: truly qualified leads.
So, what is getting in the way of so many other sales and marketing conversations? The answer is: clarity around the definition of a lead. Here are sevem points toward understanding what a lead is, and is not.
1. An inquiry and a lead are not the same.
Someone who downloads a white paper or registers for your webcast is not a lead. Someone who fits into your target demographic profile is not a lead. Someone who reads 10 blogs on your website is not a lead. Someone who clicks on your product/solution pages is not a lead.
2. So, what is an inquiry?
A term to remember here is “raw responders,” meaning individuals who make inquiries.These are names and email addresses and, if you are lucky, phone numbers, company names and titles.
These are people interested in getting educated on how to solve a problem. Your job is to figure out how many of those inquiries have the potential to become leads that you can pass to sales.
So here’s the definition: An inquiry is a person who has done something to express interest in understanding how to solve a problem. That problem may or may not be relevant to your product. Your job is to find out if the inquiry is relevant. And there is only one way to know: You have to ask!
Sales teams that attempt to follow up on inquiries cannot make the math work. Sure, you might stumble on a qualified lead here and there, but too many inquiries are not qualified. And sales reps are typically not trained as call-center telephone sales reps who know how to dial for dollars efficiently. So, now, what exactly is a lead?
3. So, what is a lead?
A lead is a qualified business opportunity. The only way to know whether an inquiry is a qualified business opportunity is to ask. The most common definition of a lead comes from IBM, which developed the BANT system years ago.
BANT stands for budget, authority, need and time frame. Under the BANT system, you reach out to the inquiry source by phone, and find out if that individual has those four BANT criteria to help you help them solve the specific problem. At that point you have a qualification.
Along the way, some companies have added to or modified the BANT qualification model, but the bottom line is that sales should never see leads from marketing that have not had some direct qualification, performed by a person, to determine if there is a real business opportunity to explore.
4. Now, how do you score a lead?
To make it easy, just assign a score to each of the criteria in BANT. You could make it 25 points each so that if the person you contact answers the right way, a qualified lead has a score of 75 or 100. Leads who score under 75 can go into a lead-nurture pool and be re-contacted in a few weeks.
I would recommend weighting the authority and needs criteria a little higher. But every business looks at this differently.
5. What Is the average conversion rate from inquiry to lead?
A ton of research has been done on lead conversion rates, some of it by industry. And some of this research has suggested that the average conversion rate from inquiry to lead is 4.4 percent. That means that you need 351 inquiries to generate a new customer. Even “best practice” companies are converting less than 10 percent of inquiries to truly qualified leads.
In my experience, even a truly optimized inquiry-generation process will yield around a 4 percent conversion rate from raw responders. You should achieve closer to 8 percent once you scrub out the “Mickey Mouses” and false data registrants.
There is also a trade-off worth thinking about: The lower your conversion rate from inquiry to lead, the higher the conversion rate should be from lead to sale. This maximizes the efficiency of your sales team's members so that they will be closing new business and not chasing unqualified prospects.
This also means that you are likely not generating nearly enough inquiries. That’s why content marketing is so important to generating cost-efficient leads. Attract visitors to your content, convert them to subscribers and nurture them with offers that help them move through the buying process.
6. What are the best lead stage definitions?
Almost a decade ago, I was directed to implement a common demand generation waterfall by the board of a startup where I ran marketing. It consisted of tight definitions around lead stages that included:
Inquiry: a net-new inbound responder to marketing content
Marketing qualified lead: BANT qualified
Sales accepted lead: usually systematically (CRM) routed and agreed to be worked on by sales
Sales qualified lead: sales re-qualifies the lead and in some cases gets a meeting
Closed/won the opportunity: revenue!
A few years ago, Sirius Decisions updated its Demand Generation Waterfall to cover more complex realities like inbound vs. outbound inquiries and sales-generated leads. If anything, the change reflects even deeper qualification by marketing, prior to its sending leads to sales.
7. Qualification matters!
The bottom line of all this for marketers is that if you are sending inquiries to your sales team prior to a true qualification, you are wasting money and the precious time of your sales team.
So, don't let this happen to you: Know the difference between inquiries and leads.
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