Troubles Converting Qualified Leads Into Paying Customers?
While business-to-business companies are spending large sums of money to generate sales qualified leads, the greatest effect on the bottom line is how well your sales team can convert them into paying customers. Many marketers have changed the way they handle online demand generation by using thought leadership - like white papers, surveys and videos - to drive interest in their product or solution. However, this has not necessarily meant an increase in potential sales opportunities.
Here are four reasons why you may be losing opportunities and what you can do to fix it:
1. Not All Leads are Created Equal
While best in class companies spend a great deal of thought and effort into developing a lead scoring system, most don’t even have any form of lead scoring. The problem is not all leads are created equally. Today’s new buyer is in control of his or her own buying process. With access to all the information they require, they are able to self-educate, discover vendors who might potentially solve their business challenges, and form opinions on which vendors are best for their needs. Lead scoring is the practice of using an algorithm to assign a ranking to sales prospects based on an understanding the prospect's interests and buying intentions.
If you have not done so already, your company needs to develop a lead scoring system. Then encourage regular meetings between sales and marketing to grade and adjust how your lead scoring is performing. Make this a consistent part of your planning and you’ll not only stay on top of your fine-tuning, you’ll foster a stronger relationship between sales and marketing, as well.
2. You Don’t Understand How Your Customers Buy
Just because someone filled out a form on your website or clicked on an email does not mean that they are ready to buy. In order to determine when a lead should be handed off to sales, you to know what stage your prospect is in their buying cycle.
By understanding how your customers buy, you can generate content that maps to their needs and help educate them as they go through their buying process. This not only helps you build brand equity but also helps you establish their buying requirements - a key differentiator when it comes time for them to make their purchase decision.
This also means understanding the difference between latent and active buyers. Active buyers often come in as hot leads and flow through the funnel quickly to paying customer but other leads need more time and must be follow-up on differently. This goes back to lead scoring. Is your prospect in a buying mode and ready to be handed off to sales or do they require some lead nurturing?
3. Your Lead Nurturing Program Isn’t Getting the Job Done
Leads that are not ready to talk to a sales person should be integrated into a well-timed, regular touch, lead nurture program. This program should include:
- Contacting them within 5 minutes of when they subscribe
- Engaging in at least 4 reach-outs to keep them interested
- At the end of each reach out, a call to action that maps to their stage in the buying process
Once you have your latent (early stage in their buying process) prospects on a lead nurture program, be sure that your prospects want to keep receiving your emails and not opting-out later. According to MarketingSherpa:
- 82% of prospects say content targeted to their specific industry is more valuable
- 67% say content targeted to their job function is more valuable
- 49% say content targeted to their company size is more valuable
- 29% prefer content targeted to their geography
The ideal message in each touch is one that provides relevant information, educates, and compels readers to take the next step in their buying process. It’s important to review the reports in your marketing automation system to watch for signs that your offers are not working. Compare your opt-outs, click throughs, and open rates in the different steps in the nurture process to see if your prospects are advancing through their buying process or abandoning you.
4. Your Sales Team Is Dropping the Ball
While there are great arguments between many sales and marketing departments about the quality of leads they receive, there is also great debate about how well sales follows up on these leads. While many sales people just expect to pick up the phone and take an order, there is much more to it than that. They still need to follow all the normal sales best practices. This means calling promptly and conducting full opportunity discovery. This means treating the call as a warm call as opposed to “just taking an order”.
It’s also important for the sales person to be persistent. In analysis of over 15 million sales leads, Leads360 discovered that making two calls versus just one increases the chance of contacting a lead by 87%. The same study revealed that a disappointing 50% of leads are never called a second time. The research also found that attempting contact 6 times resulted in nearly the maximum possible contact rate, yet nearly 60% of sales people made significantly less than 6 contact attempts.
If, after contacting a lead, a rep determines that the lead is not sales-ready, sales should send it back to marketing by adding the lead to a lead-recycling program. When leads are recycled, they can be put back into either your basic nurturing campaign or they can be added to a specialized version of the campaign that is optimized for the specific information the rep collected during their interactions (e.g. interests, timing, etc.).
The Bottom Line
While many marketing departments and demand generation teams think their job is done when they pass of a sales qualified lead to their sales counterparts, there is way more to it than that. It’s important to understand that not all leads are created equal and that you need to pass leads off to sales that are ready to buy -not when they are just at the early stage when they are aware of a problem. This means understanding how your customers buy and developing a demand generation program that maps to it. It’s also important that the sales team know how and when they should respond for maximum results. By doing this you will have, a lot less trouble converting qualified leads into paying customers.
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