Three Steps to Fix the Vicious Cycle of Bad Marketing LeadsYes, there is a circuit breaker, and it starts with a stop. As in, stop and restart from the ground up. Here are three steps to fix this cycle:
- Define what a good lead is. With a real system, even if it’s a basic one.
- Establish KPIs to monitor. Figure out a way to honestly assess marketing leads with agreed upon metrics.
- Investigate underperformance and create hypotheses to test. See if you were wrong about your definitions of a good lead, and explore the underlying factors leading to your performance metrics.
1. Define “Good Lead”What is a good lead? That depends on whom you ask. The key to a good Marketing Qualified Lead, or MQL is the “Q.” The challenge of qualification, however, is establishing the right criteria for qualification. I won’t get into a full lead qualification guide, but one standard way of qualifying leads is via two dimensions: Engagement and Profile. See a simple two-way matrix below. Engagement is based on lead activity, classifying a lead as cold or hot based on level and quality of activity (e.g., content downloads, event attendance, demo requests, etc.). In marketing automation or CRM, this is usually represented by a lead score, maybe 0 to 100. Profile relates to the attractiveness of the buyer or account based on characteristics (e.g., company size, industry, techno-graphics, etc.). In marketing automation or CRM, this can be represented by a lead grade, maybe F being lowest, to A being highest. Marketing and Sales need to align on what activities signal hot leads and what profiles indicate ideal fit. That way, you can establish what types of leads are worthy of passing to sales. Perhaps an F-grade leads require a high level of engagement before marketing passes them as MQLs, and maybe A-grade leads require much lower levels. See below for a common (though extreme) example. Again, this is a topic that gets into more advanced systems of qualification, but the principle is simple. With a unified view of a “good lead” in place, marketing’s MQLs passed to sales will convert to “Accepted” (Sales Accepted Leads, or SALs) at a much higher rate, and pursued by sales reps with greater enthusiasm and confidence to close.
2. Establish KPIs, Particularly Conversion MetricsEstablish the KPIs that will help you stay honest about the effectiveness of your lead qualification and the validity of your definition of a “good lead”. I suggest you track the following key metrics:
- Volume of MQLs
- Conversion rate of MQLs to SALs (also known as the lead acceptance rate)
- Conversion rate of MQLs to Demos
- Conversion rate of SALs to SQLs (Sales Qualified Leads)
- Conversion rate of MQLs to Closed-Won Deals
- Pipeline amount generated by MQLs
3. Investigate for Truth and Test HypothesesSo with the reports, let’s say that you see some underperformance. Does that mean marketing leads under this qualification program are still bad? Perhaps, but the correct answer requires investigation before generating conclusions. For deeper diagnosis, investigate in the following areas:
- Profile data accuracy (were leads graded based on accurate profile data fields? Do you need a different data vendor?)
- MQL follow-up response time by sales reps (perhaps the follow-up is too slow, dampening conversion rates)
- Conversion rates segmented by profile characteristics, such as industry, employee count, etc. (is your definition of Ideal Customer Profile wrong? Do you need to tweak any profile characteristics of your target? Different industry or size?)
Maintain Alignment Between Marketing and Sales with Ongoing Pow-WowsAt the end of the day, sales and marketing professionals are human. And so, pre-existing attitudes towards marketing leads will come from past experience or even misleading metrics. It’s hard to change attitudes, but the first step is establishing good habits. The above three steps should be repeated and practiced, with weekly meetings to ingrain these habits and maintain the discipline of marketing and sales alignment. Any course correction can be made on the fly at these meetings if goals are aligned, data is reliable, and minds remain open to new insights backed by data. Many Full Circle Insights customers drive real actions from metrics reporting referenced above. Learn more about how they do that and achieve success. Request a chat and see this all in action at your convenience.
Feng Hong is a recovering spreadsheet addict with a background in covering enterprise software and martech in his VC and investment banking days. Feng was previously a Product Marketing Manager at Full Circle Insights. He is an avid proponent of expressing clear product value propositions, providing quality educational content, and being relentlessly analytical with your audience engagement.