Once you're prepared to effectively set a client's expectations for a campaign, the next challenge is making sure everyone is on the same page. For example, how do you meet a lead goal, when the definition of a lead can mean anything from a contact on a purchased list to a fully sales-qualified lead.
In this post we will dig deeper into both why setting a common language is critical and then some of the different definitions of leads in the sales/marketing process to give you a starting point to use when establishing the definitions with your clients.
The Importance of a Common Language Between Marketing and Sales
Misunderstandings and frustrations often arise between marketing and sales based on the differences in meaning that can be applied to common marketing and sales terms. Sales may complain that marketing (or their agency) is not providing them with enough leads, or, conversely, marketing may wonder why the sales conversion rates are abysmal when their sales funnel is chock-a-block with leads. So, what is the cause of the roadblock in so many conversations between marketing, it's agency and sales? The answer is clarity around the definition of a lead.
So, What Exactly is a Lead?
Some people regard a lead as merely any name on a list. Others view a lead as a prospect that has been qualified in some way and is starting to exhibit buying behavior. However, the term “buying behavior” can cause further confusion as marketing and sales may have completely different ideas on what that term means. Perhaps it would be more helpful to give more consideration to what should NOT be regarded as a lead.
"When sales receives a list of new names primarily gathered up from trade shows, contact forms and the like, no one wins."
Inquiry/Prospect/Contact/Opportunity
An inquiry (and related terms) should not be regarded as a lead. Research shows that up to 71% of all inquiries never go anywhere and approximately 36% are never even followed up on. The average conversion rate from inquiry to sale is extremely low – 351 inquiries to generate one new customer. Even “best practices” only converts under 10% of inquiries into qualified leads. This means that when sales receives an unscreened list of new names primarily gathered up from trade shows, contact forms and the like, no one wins.
Qualified Lead
Anyone can give a card at a trade show, fill out a form, register for a webcast, download a .pdf, or click on a product page – an analyst studying the market, a student researching for a paper, a competitor seeking information on your product. If unscreened, it's likely many of these inquiries are rarely going to turn into sales so they should not be sent to sales without additional qualification. Marketing’s task is to figure out which inquiries have the potential to become qualified leads and these should be the only ones sent over to sales. As a best practice, a true lead is an inquiry that has progressed to an identified and qualified sales opportunity. This could be through additional engagement, further information collection or clear communication they are interested in buying.
Marketing Qualified Lead (MQL)
An MQL is a lead that has been qualified by marketing based on predetermined factors, such as having a certain job title, expressing interest through a guide/information request, or viewing a pricing page. While an MQL can never be guaranteed to turn into a sale, it at least ensures that both marketing and sales only focus on prospects who meet specific criteria. If an MQL is not ready to buy, it may respond to further nurturing. Marketing's (and its agency's) job should be to validate the intent of each inquiry. For example, a follow-up email could be used to analyze the prospect’s interest and actions to filter out those inquiries which are never going to turn into MQLs.
"If MQLs are the objective of a campaign, make sure that marketing, sales and the agency all agree on which attributes and values determine how an inquiry becomes a Marketing Qualified Lead."
Sales Qualified Lead (SQL)
An SQL, because it is further along the buyer journey, is a much more valuable lead than an MQL. An SQL is usually ready for a talk with a salesperson. The SQL may have been nurtured by marketing or sales or may have entered the sales funnel of its own volition. Marketing, sales and their agency should come to an agreement on what constitutes an MQL and what constitutes an SQL. This will go a long way to prevent a disconnect between marketing and sales.
Improving the Conversion Rate
It’s worth considering that the lower the conversion rate from inquiries to true leads, the higher the conversion rate from leads to sales should be. Marketing’s aim should be to maximize the efficiency of sales. Sales should be busy closing new business, not chasing unqualified prospects. By working together to execute campaigns that generate MQLs and SQLs, Marketing, Sales and their Agency partner will work together towards a common objective.
The Missing Link: Qualification & Optimization
To act as if all leads are created equal is a recipe for disappointment. If marketing is sending inquiries to sales before qualifying them into MQLs and both marketing and sales are calling them leads, this can waste time and money. Working together, marketing, sales and their agency should ensure that inquiries are not contacted before they’ve shown some sign of predetermined interested. When marketing has sifted to find gold, sales can concentrate on turning leads into revenue. A strong partnering with a marketing agency’s client should focus on how MQLs and SQLs convert into sales. Such analysis will help pinpoint the target market, which inquiries need to be nurtured and which leads are ready for sales calls. And by including a closed loop attribution and optimization model, these properly qualified leads will result in generating even more qualified leads and the virtuous cycle begins. Finally, when marketing, sales and their agency are speaking the same language, the result will be less job frustration and increased conversions.
Join the Conversation
Do you have any suggestions on how you have overcome lead confusion, or need help with a current challenge in that area? Share your thoughts in the comments and let's help each other out.