B2B Lead Conversion – Qualification Matters

PropelGrowth Blog - Financial Services Marketing and Content Strategy

I need your sales forecasts, account plans, expense reports, and territory plans next Monday. And by the way, why haven't you called those leads from Marketing?

“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.”      Michael Brenner

Last week, I came across an excellent blog post from Michael Brenner about B2B lead conversion rates called “Hey Marketing, an Inquiry Is Not a Lead.” (Brenner is a content marketing thought leader who used to run SAP’s content programs.)

The point of Michael’s article is that Marketing needs to do a better job of qualifying leads before passing them to Sales. I couldn’t agree more. The best approach is to use a lead qualification waterfall like the one that Sirius Decisions developed to define lead stages, determine qualification criteria, and then pass to Sales only those leads that meet the criteria.

Common Problems with B2B Lead Conversion

I see three problems recurring over and over with companies who have long, complex sales cycles (e.g., 4-10 members in the buying committees, 6-18 month buying cycles).

1. Marketing Passes Under-Qualified Leads to Sales

Companies with immature inbound marketing strategies tend to pass every registration for a content download, webinar or event to Sales as a lead. But in reality, these are inquiries, not leads. For most companies, fewer than 4% of these inquiries will convert to marketing qualified leads.

If Marketing passes under-qualified inquiries to Sales, then Sales has to waste their time calling to qualify the list. They’re going to have a very low hit rate, and so they’re naturally reluctant to put much time into the calls. They’ll cherry-pick the list, calling only the most interesting names, call those people only 1-2 times, and then move on. The less success they have, the more distrustful they become of leads sourced from Marketing. And with good reason.

2. Sales Waits too Long to Follow Up

Some companies are fortunate enough to receive a steady stream of good leads from contact forms and demo requests. Sadly, Sales usually fails to follow up with these qualified leads in a timely manner. In 2012, researchers found that most companies wait 4 to 6 DAYS before calling a prospect who filled out a form requesting contact from a sales person. By the time they reach out, the lead has forgotten all about that contact request.

According to the Forbes article about the research, “The odds of contacting a lead if called in 5 minutes are 100 times higher versus 30 minutes.” Did you catch that? Sales has to reach a lead before they can qualify them, but if they wait hours or days to reach out, the likelihood that they’ll be able to reach the lead on that first call decline rapidly. Have you considered what waiting a few days does to your lead conversion rates? [Highlight to tweet]

3. Sales Fails to be Persistent in Following Up

Researchers in this study found that sales people attempted to reach the prospect an average of 1.7 to 2.1 times before giving up. This is in spite of evidence that consistently shows that it takes an average of 5-12 calls before Sales makes first contact with sales opportunities. According to InsideSales.com, which has done research on these issues for several years, “A sales process that mandates 8-12 contact attempts and uses multiple modes of contact usually sees a 90% contact rate for all possible leads, almost double the industry average.” Just imagine if this one step in your lead follow-up process changed. How would that affect the ROI of marketing?

4. Sales Only Accepts Leads that Meet BANT Criteria

Some organizations require that a lead meet all the criteria for BANT before being passed to Sales. BANT means the lead has Budget to purchase, Authority to make the decision, Needs that match the product capabilities, and Timing that aligns with your typical sales cycle and the sales person’s quota horizon.

BANT is an important qualifier for the sales team to determine if a lead should go into their forecast. If a forecasted opportunity doesn’t meet BANT, then forecasts are likely to be inaccurate.

But sales-accepted leads do not equal forecasted opportunities. A lead is just that – a lead. The sales person needs to go in and qualify it, gain access to the buying committee, cast vision for a solution, get people on board, convince them to budget for the purchase, and guide them through the buying process.

If the company waits for BANT to consider a lead qualified, then I guarantee that the lead is already in deep into the buying process, probably with your competitor.

For example, if the prospect has allocated budget for the purchase (the “B” in BANT), then they already have a pretty solid vision of what they want to buy and a pretty good idea of what it costs. If you didn’t set these expectations, then most likely, your competitor did. So you’re immediately competing from behind and competing on price before you get to set vision. Ideally, Sales should get in early to create a buying vision BEFORE budget is allocated. Then, they can collaborate with marketing to nurture the opportunity with content over time.

If Sales requires “A” (authority) to qualify a lead, then they don’t follow up with the analysts and consultants that are often engaged to evaluate and shortlist options. But these are the people who are MOST LIKELY to be downloading your white papers, reviewing your website and researching their options. Research has proven that buying committees rely on internal analysts to create the shortlist. CXOs and decision-makers are rarely directly involved in the process. Ignore analysts and consultants at your peril.

That said, the other two parts of BANT are important qualifiers for an MQL. Marketing can evaluate the “N” (Needs) based on the content being accessed, responses, questions about needs on inquiry forms, and demographic criteria (e.g., company type/size/location). An inside sales person can call to further validate needs. Timing (“T”) can also be assessed through registration forms, and is a valuable qualifier as to whether a lead should be passed to Sales now or nurtured by marketing.

Sales Is Too Busy to Follow Up Unqualified Leads

Marketers need to understand that Sales teams are incredibly busy. [Highlight to tweet] Frankly, they don’t have time to waste on unqualified leads. They’re under pressure to complete a myriad of administrative tasks while still meeting their sales quotas.

So what do you do? How do you follow up with prospects without handing Sales unqualified leads. How do you ensure that every lead gets a follow up, and no qualified leads fall through the cracks?

I had a chance to talk with Michael Brenner about this last week. His approach at SAP is an excellent way to improve lead qualification and lead conversion rates for complex sales.

Get the Right People on the Right Seats in the Bus

If you’ve read Jim Collins’ book Good to Great, then you know the metaphor about getting the right people on the bus and in the right seats. If not, here’s a helpful article. In my experience, the best cold callers are not the best closers, and the best closers hate cold calling.

Michael Brenner knows that, so he set up a three-tiered approach for lead qualification and conversion. First, when leads filled out an inquiry form, they were immediately routed to an outside demand generation agency that employed a team of phone sales people. This agency followed up with inquiries within 5-10 minutes of receiving the web inquiry to do initial qualification and see if there was interest in exploring further. When a lead met specific criteria, the agency passed it to an inside sales person at SAP.

This inside sales person had far more experience in the product offerings and areas of expertise at SAP. His job was to figure out which line of business the lead was interested in and qualify them for that area. If a lead met his qualification criteria, then it was passed to the sales person in the line of business for follow up.

Michael made sure that the right people were on the right seat for the job he was asking them to do. This allowed the Sales team to focus on the real sales opportunities, while people who were good at following up and qualifying leads focused on their areas of expertise. The extra steps made a dramatic difference in lead conversion rates.

According to Michael, “The extra time and quality more than made up for the cost in the form of higher conversions, and [the] sales team trusts that the leads we passed had as good a chance as any [they personally surfaced] to convert to a sale. We literally produced more than 100,000 inquiries per year to get to a few thousand leads to get to a few hundred deals. But the revenue was millions more than the cost.”

How to Improve B2B Lead Conversion Rates

So here are some key takeaways marketers can use to improve conversion and stop qualified leads from falling through the cracks of a broken lead management process.

  1. Remember that the “early bird gets the worm.” Calling an inquiry within 5 minutes of them filling out an inquiry form gets the best results.
  2. Follow up requires persistence. Whoever is following up with inquiries should be asked to make at least 9 attempts before giving up on a lead. [Highlight to tweet]
  3. Don’t expect Sales to follow up with inquiries. They need to focus on selling. Hire someone in inside sales and train them to follow up with raw inquiries.
  4. Don’t expect to meet all BANT criteria before passing a lead to Sales. [Highlight to tweet]
  5. Just because a lead doesn’t have authority to make a purchase doesn’t mean he/she doesn’t have authority to develop the shortlist.
  6. If the lead has budget approved, they’re probably late stage and already in deep with your competitor. [Highlight to tweet]

What are you doing to qualify leads before sending them to Sales? I’d love to hear from you. Please email me to share your thoughts.

Learn more about lead qualification, the buying process and content marketing.