Inbound marketing is a powerful strategy. When we implement it for a company here at Imagine Business Development, we will typically see a 2 to 7 times increase in lead generation in the first year and a 5 to 10 times increase in future years.
A 2013 study identified generating high quality leads as the number one challenge for B2B marketers. It’s no surprise that Inbound Marketing, with it’s proven track record, is exploding in use. While Inbound Marketing will certainly increase the generation of quality leads, it will also generate more low-quality leads.
In our experience, of the leads created by an effective Inbound Marketing approach between 50% and 90% of leads will never become qualified in any fashion. This rate is highly dependent upon the industry you’re in, how clearly you’ve segmented your market and how effective your process and strategy is.
It’s important to note that generating low quality leads is not, in and of itself, a bad thing. For companies whose message (and offers) appeals to a broad marketplace, and yet whose actual products and services appeal to a small percentage of that market, will experience a fairly high low-quality lead percentage.
At Imagine Business Development, for example, we typically run between a 12% and 16% quality lead rate (meaning as many as 88% of the leads we generate are low quality and never enter any type of nurturing or pipeline process).
While at first blush this seems bad (it certainly did to me), our lead velocity growth rate of qualified leads (which at the end of the day is what we care about) is actually quite healthy.
What’s interesting is that when generating leads is among your biggest barriers to growth, you tend not to consider what you have to do when your lead velocity increases. We see this everyday, as oftentimes our clients are initially stuck once the leads start to develop. As I shared in an earlier post, inbound leads don’t behave like traditional outbound leads, and must be handled differently.
As you embark upon, or enhance, your Inbound Marketing efforts the development of an effective lead management process is crucial to maximize the ROI of your lead generation efforts.
From our experience, here are the 5 attributes of an effective lead management process:
1) Clear Definitions for Each Stage of the Funnel
It is important that you clearly define each stage of your funnel. For purposes of illustration, I will highlight the minimal areas of classification and share with you a baseline definition:
- Visits – we define a visit simply as a unique visitor to our website. We have clients that weave in offline measurements (like trade show visits, ad impressions, etc.) to this metric. The point here is that there’s no right or wrong definition, so long as there is a clear one.
- Lead – we consider a lead simply a lead. There’s no qualification. The measurement we use for this is names that are added to our database. This could either be the result of someone downloading something online, leaving a business card at a trade show, a referral, etc. An important point here is we measure leads as individuals, not companies.
- Marketing Qualified Lead (MQL) – these are companies that have identified themselves as being more engaged, have the pain that you solve, and meet initial criteria that indicate they could be a fit.
- Sales Qualified Lead (SQL) – these are companies who not only have the pain we solve, but meet a deeper fit analysis that indicates a potential match. Additionally, these are companies where we’ve connected with the proper authority level, they demonstrate a defined need/pain and are open to conversation.
In our programs we define categories within each level of the funnel and provide a more detailed explanation that ensures a single definition that is understood and followed by all.
2) Clearly Articulated High Probability Indicators (HPI)
Spend the time before prospecting to identify the HPI that connect to the 3-5 causes that lead a prospect to buy from you. From there, you can build your story, challenge their thinking and create a stronger impression that will lead to action.
Clear HPIs provide focus for your marketing and sales efforts, which allow for greater alignment and more effective action.
3) Lead Triage or Lead Scoring Process
I’ve written much about lead triage vs. lead scoring (and for those that don’t want to read that post, only a small percentage of companies should actually be doing lead scoring, most should be doing triage). For purposes of space, I won’t repeat all that I’ve written here.
Suffice it to say that a clear process for assessing both the company and the contact needs to be in place.
4) Service Level Agreement (SLA) Between Marketing, Sales (and if Necessary, Sales Development)
An effective service level agreement, at a minimum, meets three criteria
- Provide clear definitions for each stage of the funnel (as mentioned in the first point).
- Clearly lays out the protocols of who (marketing, sales development, sales) does what (connect, email, call, voice mail) when and how often.
- Lays out clear targets and measurements that will be used to assess progress and create accountability.
SLAs can certainly be deeper than these three criteria, and for those more advanced or looking to scale bigger and faster it certainly should be. However, if you don’t have an SLA (and the majority of companies with marketing budgets under $1 million don’t), start with these three criteria and evolve from there.
5) A Defined Nurturing Process
The power of building out a full funnel is that it builds predictability and scalability into your growth efforts. The frustrating part is that just because someone is a “qualified lead” doesn’t mean that they’re ready to buy or talk to a salesperson. According to Gleanster Research, that applies to 50% of your qualified leads, and I’ve seen stats that indicate it could be as high as 80%.
- Leads who are nurtured with targeted content produce a 20% increase in sales opportunities (source: DemandGen)
- Companies that excel at lead nurturing generate 50% more sales ready leads at a 33% lower cost (source: Forrester Research)
The bottom line is that effective nurturing is a requirement if you want to see the returns from your marketing and lead generation investments.