79% of marketing leads are never converted

define ‘qualified leads’

I receive emails weekly, if not more often, from shysters offering lead generation services. I also talk to clients who have very high enquiry rates, thanks to their high advertising budgets, but achieve a low proportion of qualified enquiries. This is the first of 10 THOUGHTS addressing strategies for maximising qualified enquiries and genuine prospects.

I would define a ‘qualified enquiry’ or ‘genuine prospect’ as one where there is a better than 50% likelihood of conversion. I recognise that there is usually a sales funnel and acknowledge the importance of minimising time wasted on unqualified enquiries in that funnel.

A recent study by software vendor, Salesforce, found that:

  • 79% of leads are not converted; and
  • 5% of leads are considered by salespeople to be high quality

In my view, it is likely that these statistics vary by industry. However, the underlying point is clear and consistent with the experience of many of the salespeople with whom I speak. I have encountered businesses where the percentages are worse than this. It is one thing to increase the number of enquiries, but quite another to generate qualified enquiries or prospects.

This is both a sales and productivity issue. It impacts on the performance of the business and the mindset of the salesperson.

Ensuring that qualified enquiries are maximised (as opposed to merely maximising traffic) requires a clear definition of what is meant by a qualified enquiry or genuine prospect.

So, what constitutes a qualified enquiry, lead, or genuine prospect for you?

The easy answer here might be – the target market. In reality, however, not all members of the target market will represent a genuine prospect. A qualified enquiry or genuine prospect might need to be more tightly defined than the overall target market.

Genuine prospects may, for example, differ by marketing channel – direct mail, telemarketing and face to face, or for online and in-store sales. A genuine prospect is more than a member of the target market. He or she is also a decision maker with control of the cash.

A genuine prospect is an enquiry that will, more often than not, convert when there is an appropriate sales process. So, which potential customers are likely to be converted to buying your goods or services and which ones will spend the most?

Defining your optimal ‘qualified enquiry’ should be as precise as possible with a view to focusing resources as much as possible. A range of characteristics might be considered.

There are some essential characteristics of a qualified enquiry or lead, including the capacity to pay the price you are asking. There are other characteristics related to regulation, such as those relating to alcohol where only people over 18 can make a purchase. There are, of course, other characteristics, and these will vary from industry to industry, business to business, and channel to channel.

THOUGHT

Clearly define the characteristics of a qualified enquiry or genuine prospect. Look beyond the broader target market and take into account all of the factors that will determine a genuine prospect.

Having defined a qualified enquiry or genuine prospect, tailor your marketing to the individuals that have the required characteristics with a view to increasing sales and reducing costs.

SOURCES

Marketing Results, Salesforce Blog, Iron Paper, Lead Fuze, Forbes, Sales Fusion, Impact Communications, Demand Gen Report, Gong Labs, Adobe, Aberdeen Group and HBR

John

MORE THOUGHTS – www.djohncarlsonesq.com 

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