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What a “lead” is and why it's important.

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If your sales team isn't happy with the leads that are being handed to them by your marketing team, this post is for you. If you've used lead generation services only to be disappointed that you've closed so few deals from them, this is for you. If you're not happy with the quality of leads from your website, read on.

If you’re tight for time, bookmark this page and come back to it when you’ve got a spare 10 minutes to truly digest the information in this post.

Here are some key topics you can jump to in this post:

 

Is it a lead? Common mistakes with leads


  • An accepted connection request on LinkedIn is not a lead

  • An appointment is not a lead

  • A new contact from your website is not a lead

  • A contact in the right company, is not a lead

  • A free trial sign-up is not a lead

 

The definition of a lead

A known contact, that meets your customer criteria (lead criteria), is a decision maker, or important influencer and has taken an action that expresses they are interested in a problem you solve.

 

Working out your lead criteria


From the description that I’ve given above you’ll see that for a lead to be a lead, it needs to meet specific criteria. However, if you’re like many businesses, the chances are you don’t have these defined. These will be different for each business, so here’s some tips to get you started:

  • What level does the person need to be for you to consider them to be a lead?
    • E.g. do they need to be a manager or more to make a decision on your product or service.
  • What are the problems that you fix that they need to engage with to show that they are potentially interested in your product or service
  • What action do they need to have taken with you, to show that they are an active lead, rather than an inactive contact
  • Is there anything that will immediately qualify them in or out as a contact that is worth speaking with.
    • For example, your company may only provide services to a specific industry, or for a specific technology. If the contact isn’t in that industry or doesn’t use that technology, then they are not worth considering as a lead for your company.

 

Different lead stages


  • Lead: A known contact, that meets your lead criteria.
  • MQL: A lead that has raised their hand that they want to speak with sales or an expert in your business.
  • SQL: An MQL that meets your sales qualification criteria.
  • Opportunity
    An SQL where there is an active opportunity to do business in your chosen time frame.

 

Where a lead starts and where it ends


It can be difficult to know where a lead starts and where it finishes, here’s my take on it:

Where a lead starts:

A lead starts when a known contact meets your lead criteria and identifies themselves as active (actively researching/looking for a solution to a problem you solve). If you can’t identify that they are active, they should really remain as a contact. For example if they haven’t taken any actions that show they are active within the last 3 or 6 months, it is better to demote them to a contact, until they take action or are proven to be completely inactive and are removed from your CRM system.

 

Where a lead finishes:


For me, I’d say that a lead either finishes when they become a customer, or when they become inactive for more than your chosen period of time.

At any stage between becoming a lead and a customer, they are at different lifecycle stages, but they are still a “lead” of some sort (E.g. Subscriber, Marketing Qualified Lead, Sales Qualified Lead, Opportunity.) This is why it’s so important to have clear criteria for “leads” at each lifecycle stage - as all leads aren’t created equally.

You might opt for saying they are no longer a lead when they don’t have Lead as part of their lifecycle stage, which would also make a lot of sense. At the end of the day, it’s up to you how you want to define it. The most important thing is that you have clear definitions of each stage and that you’re managing it consistently - otherwise how would you know when a contact doesn’t have “lead” as part of their lifecycle stage?

"81% wastage is okay..."  81% of sales and marketing investments are wasted generating low quality,  unqualified leads.   Don't think this applies to you? You should get a definitive answer.    Score your lead quality now  ( Free tool, for a few minutes of your time )

The boundaries between marketing and sales


One of the questions raised when managing your leads and lifecycle stages more proactively is, what is the role of marketing and what is the role of sales when it comes to leads?

I believe that for organisations where marketing has a lead generating remit, their responsibility should be to generate sales ready leads that we refer to as MQLs.

Anything less than this, creates a lack of clarity on their responsibility and leads to a lot of wasted sales time chasing unqualified leads that aren’t ready to speak with them, let alone take any action. Essentially, salespeople are doing marketing’s job of educating prospects, and also left to do their own prospecting when these prospects don’t close.

It leads to (pardon the pun) lazy marketing and a lot of time wasted on activities that aren’t generating active leads and nurturing them effectively to the point where they are ready to speak with a sales person or expert in your business.

 

What is marketing?


The role of marketing should be to educate and inform your target market, to the point where contacts are aware of the problem that you solve, that you are a solution worth engaging with and to confirm that contacts want to have a conversation with you to help fix their problem. In conclusion, marketing should attract your ideal customers, and filter out the rest.

 

What is sales?


The role of sales should be to help the buyer make the right decision, to check that they are the right fit for the solution that you provide and that ultimately they will be a happy customer that gets a lot of value from the product or service that you provide.

Even when people have extensively researched a solution, they often need help making the right decision, especially when the problem and solution is expensive or complex to solve. Especially in B2B environments many purchase decisions can be a once in a career decision and can be career defining. A good sales person will understand this and will help the buyer make the right decision, even if the best decision is not to buy from them.

Unfortunately this definition isn’t clear in many businesses, which means that there are a lot of sales people out there filling the gaps left by marketing.

Common marketing jobs done by sales people


  • Appointment setting = Marketing
  • Prospecting = Marketing

Are your sales team spending a lot of their time prospecting and trying to arrange appointments with cold contacts?

If they are, they are actually doing the job that your marketing should be doing.

Of course there will be times when this is needed. Whenever marketing is building momentum, like going into new markets it makes sense for a sales person to explore that new ground with targeted prospecting. However, this becomes very ineffective as soon as you are looking to scale.

If you have gaps that your marketing isn’t filling, it’s fine to fill it with targeted sales activity like prospecting. However, this shouldn't be the norm. It’s time to set clear responsibilities with your marketing team and ask the tough questions to make sure it is performing and delivering your sales ready leads.

This will mean that your sales team isn't wasting their time on inefficient (not scalable, direct cold outreach type activities) prospecting or speaking with unqualified contacts. Instead they’ll be spending their time doing what they do best, which is selling.

Prospecting is also known as telemarketing. In companies with large and established sales teams prospecting or telemarketing is often carried out by Sales Development Reps SDRs, or junior sales people. The remit of this role is to work through contacts, to identify them as leads and qualify them as marketing qualified leads (MQLs) and then sales qualified leads (SQLs), they’ll also often have the role of qualifying MQLs passed to them from marketing to SQLs.

When this role is doing prospecting, they’re really doing a marketing job and filling a gap left by not having enough MQLs from marketing activities.

It doesn’t really matter where these roles sit, the main thing is being clear on the role and responsibility in the lead generation process.


Why it's important to get this right

 

In short to make sure that your resources are being used in the best possible way to deliver the best possible results.

When you have a very clear definition of your lead stages and criteria to identify what is and isn’t at each stage, you will get a much clearer picture of where you stand at any point. You’ll be able to answer these questions quickly:


  • Which activities are generating MQLs and SQLs most efficiently and effectively?
  • Where is your time and budget best spent?
  • Where are your gaps?
  • Where do you need to focus your time to fix things that aren’t working or are causing friction in your lead flow?

When you can answer these quickly, you’ll find that your leads and new business pipeline will both start to flow much better.

 

Next steps you can take


Do the problems that I’ve outlined in this post sound familiar to you? If they do, we’ve built a Lead Quality Scorecard, so that you can quickly identify the problems you have in this area and how you can fix them.

The scorecard takes less than 10 minutes to complete and at the end you’ll get a tailored recommendation report on the simple steps you can make to improve your score.

Get your score now, so you can stop wasting precious sales time and start closing more deals.

"81% wastage is okay..."  81% of sales and marketing investments are wasted generating low quality,  unqualified leads.   Don't think this applies to you? You should get a definitive answer.    Score your lead quality now  ( Free tool, for a few minutes of your time )

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