If Sales and Marketing were a manufacturing operation starting with raw materials — leads — and ending up with 5% to 20% in deliverable product — won sales — it would soon be shut down to determine what is wrong. However, companies continue to spend untold dollars on lead generation efforts ultimately doomed to fail.
Lack of lead management impacts lead conversion and ROI
I think the major cause for poor lead conversion and ROI is the lack of lead management, also known as passing unqualified leads, or marketing qualified leads (MQLs), directly to sales reps.
MarketingSherpa captured some of the key lead management issues in the 2012 B2B Marketing Benchmark Report. Of the 1,745 marketers surveyed, the research showed the following:
- 68% of study participants have not identified their Sales and Marketing funnel
- 61% send all leads directly to Sales; however, only 27% of those leads will be qualified
- 79% have not established lead scoring
- 65% have not established lead nurturing
In my own experience working with companies, I’ve found the top issues include:
Marketing qualified leads (MQLs aka inquiries) have been sent to sales people without qualifying them first or sending leads to Sales based on lead scoring alone.
A lead nurturing program has not been implemented.
Sales has not been given the means to hand leads back to marketing to reengage for further work or nurturing on their behalf.
Lead management defined
Lead management is a multi-stage process that manages the conversion of sales leads to customers. It’s the process of managing and tracking customer interactions from first contact to close.
The above illustration shows map of lead management. You’ll notice the funnel is invertedbecause people are not falling into the funnel; they are falling out.
The idea is that the buyer’s pipeline requires a series of “micro-yes(s)” before getting to that “macro-yes” in the form of the final conversion-to-sale.
Here are the 5 major stages of an effective lead management process:
- Lead capture (Generating inquiries)
- Lead qualification and scoring (Are they engaged? Are they a fit? Are they sales ready?)
- Lead nurturing (Progressing early stage leads from interest toward purchase intent)
- Lead distribution (Handing off only “sales-ready leads” that meet the universal lead definition, aka ULD to sales)
- Lead tracking and reporting (Closing the loop between sales and marketing)
Do you have your process for each of these steps documented and understood by key stakeholders? If not, start now.
Marketing automation alone doesn’t equal lead management
Many marketers hope that buying technology and tools will help marketing automation and drive better lead management processes.
Marketing automation can’t spontaneously generate collaboration between Sales and Marketing. It also cannot create processes nor will it generate sales-ready leads on its own. Marketing automation tools just enable lead management, but they’re only part of the solution. There are more fundamental aspects of lead management that often get overlooked.
Lead management requires the following elements:
- Dedicated resources (i.e. sales development reps, inside sales team) directly connecting and qualifying leads
- People focused on getting the highest conversion rates on leads and the most efficient cost per opportunity
- Centralized lead qualification process prior to sending leads to the sales team to filter raw inquiries and disqualify those that don’t fit your ideal customer profile (ICP)
- Clear and universal lead definitions created with the sales team determining what exactly is a qualified lead
- Provide qualification information for each lead while making it clear who owns the lead
- Lead nurturing content marketing to help progress early stage leads from interest toward purchase intent
- Rapid engagement of inquiries to qualify interest and fit
- Clear service level agreements (SLAs) between Sales and Marketing on what Sales will do once they are passed a “sales-ready” lead. Then, require a time-limit on a turnaround once leads are distributed, and track the lead throughout the process
- Marketing automation tools to enable lead scoring to prioritize the human touch rather than replace it
- CRM tools to manage inquiries and track sales lead interactions from first contact to close
- Effective data management to cleanse bad data and append missing data on leads
- Clear metrics to manage the process of inquiries: MQLs, SQLs, opportunities, closed vs. won business, etc.
- Established training for sales reps on how to engage and convert qualified leads in the CRM
Companies that adopt effective lead management processes generate more revenue from their lead generation investment and have overall higher close rates on marketing generated leads than those that do not.