It’s an essential question: What is a “marketing-qualified lead,” and how exactly does marketing make that determination? And once it’s in place, does sales agree?
As for that last question, the answer is: Not very often. Only 23% of sales professionals say marketers consistently deliver sales-ready leads. And worse: According to research from the CEB marketing Leadership Council, 49% of sales reps ignore more than half of all leads from marketing. 67% said fewer leads from marketing actually convert; 30% said they don’t trust marketing’s leads; and 22% said they need more contextual information to have a productive conversation.
“Marketing-qualified” is the point at which marketing determines that a lead is ready to be handed to sales. In order for this handoff to work, sales has to agree on how that point is arrived at. Without a shared definition, the sales team gets leads they say aren’t ready (and they don’t want to waste their precious time following up on unqualified leads). Marketing, for its part, thinks sales isn’t paying attention to those hard-earned leads, especially when it took three brilliant, complicated, cross-channel campaigns (including one video and an infographic) to get those leads to raise their hands.
Establishing the definition of a “qualified lead” through a shared sales and marketing process is one of the most important things you can do to foster cooperation between the teams. The marketing-qualified lead definition should cover demographic information (such as company size), situational information (such as their current pains or challenges), and behavioral information (how engaged is the prospect?). It’s good to include information that shows clearly why marketing believes the lead is ready for sales.
A qualified lead must be a demographic fit
The first step is to identify the demographic parameters of a qualified lead. Analyze your current customer base to find common denominators. Look for firmographic and demographic parameters such as company size (employees or revenue), industry, job title, business model, and/or geographic location.
A qualified lead must have demonstrated relevant engagement
Look to the lead’s activity history. Did they open and click on an email? Attend a webinar? Fill out a form? Download a competitive analysis? Which web pages have they looked at, and for how long? A genuinely qualified lead will display proactive engagement, and specific interest in a product or issue.
A qualified lead must be ready to speak to sales
Marketers: Don’t send unqualified leads to sales, even if you’re striving to make a benchmark number. This damages trust and inhibits their desire to follow up on marketing-generated leads. For full cooperation, sales must be able to trust the leads you send them. When you did your buyer persona research (you did this, didn’t you?), you should have uncovered the steps that your best buyers took to become your customers. Be very aware of the late-stage steps that amount to buying signals and score them as such. This will let sales know why you’ve sent them the lead and will foster confidence in your process.
A note about buyer personas
If you haven’t done the persona research … do it now. Identify a group of good customers that are cohesive in ways that help segmentation (all users of Product X, all approximately the same size or revenue, etc.) and review the series of touches that took them from tire-kickers to satisfied customers. You will probably have several personas, categorized (perhaps) by the role they play in decision-making, or some other factor that will allow you to target messaging and timing directly to this segment. Look for patterns, and see if there are identifiable late-stage touches. Be sure to share this information with sales, so that when you say “…and they looked at the pricing page and used the ROI calculator” (or whatever that touch or series of touches is) you and sales both agree that’s a sign of readiness. If sales trusts the criteria, they’re a lot more likely to follow up. And they’re a lot more likely to trust the criteria if they’ve had a say in its creation.
Create an agreement and have both sides sign it
Document the marketing-qualified lead definition and have both marketing and sales sign a “service level agreement” (SLA). This clarifies the understanding and uncovers doubts about the definitions if the parties aren’t willing to sign. The document should include the demographic and behavioral traits a qualified lead must have. It should also include marketing’s responsibilities (develop qualified lead, provide required information, hand-off to sales) and sales’ responsibilities (follow up on leads in a timely and thorough manner, provide regular feedback). If you have interim qualifying steps (“sales-accepted,” say, and/or “sales-qualified”, for instance), then document those definitions and responsibilities as well.
The Qualified Lead Definition worksheet
The worksheet below is an example of the factors you might consider when constructing the lead qualification definition. Remember that you might begin with one criteria (“marketing-qualified”) and evolve to identify different stages (such as “sales-accepted” or sales-qualified”). Given that a lot of marketers just throw raw leads over the fence to sales, any step in qualifying whether a lead should go to sales now or stay with marketing for nurturing is a big step forward – and may change your game completely.
Required Lead Information
|Information||Qualified Lead Requirements (general categories)|
|Full Name||First and last name|
|Company||Legal company name|
|Phone||Legitimate business phone number|
|Legitimate business email address|
|Address||City and state. Street address could be optional|
|Information||Qualified Lead Requirements (examples given)|
|Company Size||100+ employees|
|Annual Revenue||$20 million|
|HQ Location||North America or EU|
|Title or Role||Manager, Director, or VP of IT|
|Activity||Qualified Lead Requirements (examples given)|
|Registration||Completed form to download content or register for webinar|
|Attendance||Attended 1 or more webinars|
|Trial or Demo Request||Requested opportunity to trial or demo product|
|Displayed Interest 1||Visited product page(s) on website|
|Displayed Interest 2||Visited pricing page on website|
|Custom Questions||Answered “yes” to hearing more|
Note: If you use the lead scoring capability of a marketing automation platform to attach values to attributes and actions, the qualification process can be automated, which both speeds it up and reduces errors. Such a system can even provide a prioritized list to sales.
Once lead criteria is identified and agreed on, it’s a good idea to go one step further and get mutual responsibilities in writing in a service level agreement. This should be as simple as possible. An example:
Marketing is responsible for:
- Required lead information. Marketing will be responsible for providing correct contact information with their qualified leads. Required information should be limited to information that sales absolutely has to have in order to sell. Any non-essential information should be optional or left out completely.
- Demographic qualifiers. Demographic filters ensure that the lead fits your target buyer profile. In the example above, all the company’s best customers have more than 100 employees, so leads with fewer would be excluded. It’s important to note that most companies choose to filter leads based on either company size or annual revenue, but not both.
- Behavioral qualifiers. Behavioral qualifiers are a lead’s activities that show buying intent. In many cases, behavioral qualifiers are adjusted and optimized over time, as more research shows better opportunities, or as offerings and behaviors evolve.
- Process. Marketing will push all marketing-qualified leads to the CRM as soon as they become qualified. (If you’ve automated this process it’s easier, faster, and prevents errors.) Give an actual time if possible (e.g. 4 hours). You may find you need to have different time frames for different lead sources (form submit versus a live conference).
Sales is responsible for:
- Follow-up timing. Sales will follow up all marketing-qualified leads within (designate a specific time period).
- Follow-up actions. Sales will follow up all marketing-qualified leads with three attempts to contact by phone. (Adjust the actions to your own sales process; often it’s a combination of phone calls and emails.)
- Returning non-closing leads to marketing. A lead that isn’t ready to buy should not automatically be thrown away; often a return to marketing for nurturing will result in a substantial percentage of leads closing in a longer sales cycle than the average.
- Providing feedback to marketing. If not enough leads are closing, sales and marketing will together analyze why and make adjustments in the qualifications. (Perhaps you should look for different profiles [different industries, different company sizes] or stronger behavioral signals.)
Both sales and marketing team leaders must sign the SLA. The whole process works rather like a contract negotiation or the creation of a business plan; both sides adjust until they agree they have a model that should work. If the model doesn’t work well enough once deployed, they look for the reasons why and refine the agreement.
What’s your experience with lead qualification? How many steps do you have? Are you using an SLA?
The basis for this blog post is one chapter in Act-On’s Intro to Sales and Marketing Cooperation, a nine-part course in Act-On’s Center of Excellence. You can find the entire course here.
Photo “High Five” by rdubois, used with permission under a Creative Commons 2.0 license.