Lead generation is a big investment—53 percent of marketers report that half or more of their budget is allocated to it. Companies budget a lot of money to fund marketing campaigns and content creation—not to mention the marketing and sales technology your teams are using to identify, track, nurture leads, and convert them into customers.
What is a sales qualified lead?
What exactly is a sales qualified lead (SQL)? It varies depending on the company, but the generally accepted definition is a prospect that has demonstrated or indicated an intent to purchase. An SQL is ready to talk to a sales rep and make a purchasing decision. Unfortunately, not every SQL is able to become an opportunity, even though letting an SQL slip away is just like leaving revenue on the table.
How do you calculate an accurate SQL conversion rate?
Before you can boost your conversion rate, you need to know what it is. Whether you have gaps in your data or haven’t implemented the right systems to collect it all, it isn’t ideal to try to guess at something as important as your SQL conversion rate.
Your SQL conversion rate does somewhat depend on your company’s definitions of lead, marketing qualified lead (MQL), sales qualified lead, and opportunity. In general, however, the SQL conversion rate is a reliable way to evaluate the quality of leads coming from marketing and the effectiveness of sales’ tactics in engaging them. You can find your SQL conversion rate by dividing how many SQLs were created by the number of opportunities generated. Or:
# of SQLs/# of opportunities = SQL conversion rate
You should try to find the average conversion rate across your entire funnel. Once you determine the average percentage of leads converting to MQLs, MQLs converting to SQLs, and so on, you can accurately set a benchmark for net new leads needed to hit your revenue goals.
What stops an SQL from becoming a sales opportunity?
Aberdeen Group found that only 33 percent of SQLs turn into opportunities. Marketo conducted a study that found that only 22 percent of SQLs become customers. (Aberdeen’s was less hopeful, finding that only 10 percent of SQLs turned into clients.) While having this rate of conversion won’t bankrupt you, it stands to reason that at least some money is being left on the table. A process can always be improved, especially when it comes to your lead funnel.
So what’s stopping your SQLs from turning into opportunities?
For one, they haven’t been properly nurtured. You might think nurturing stops once a lead converts, but that’s just the beginning. In fact, 48 percent of businesses find that their leads need to be nurtured through a “long cycle” that involves multiple influencers within a company.
All SQLs should be followed up with multiple times to establish that they have budget, authority, and need, and that it’s the right time for your sales team to engage.
Unfortunately, one-third of companies never follow up with a lead, and two thirds give up after 1-2 attempts. This is usually due to sales teams being overwhelmed by the number of leads being produced by marketing—they just can’t get to them all. More qualification and nurturing are necessary, but the sales team doesn’t have the bandwidth to provide it.
Many companies are turning to automation beyond traditional uni-directional email and employing conversational artificial intelligence (AI) to help move leads from the MQL stage to the SQL stage. This improves the experience of prospects (they don’t feel like they’ve been dropped into a black hole only to receive a cold follow-up months later), and also sets your sales team up for success.
4 ‘must haves’ to turn more of your SQLs into sales opportunities
Once you’ve properly nurtured an MQL into an SQL, what can you do to keep that success going? A good place to start is the first 3 P’s of our 4 P’s of sales effectiveness.
Some companies will take 25 hours to respond to a new lead. We’ve found that the top-performing companies contact a new lead within 13 minutes. There is no better time to begin a conversation with a prospect than when he or she first converts. Prospects are clearly feeling their pain most acutely at that point in time and looking for someone to help. Be that person. And do it quickly.
Most salespeople give up after one or two attempts to contact a lead. But companies with the fastest-growing revenues were most likely to attempt contact with a lead five to eight times. A lack of response isn’t always proof someone is uninterested—if you know you can bring value to the table, keep trying to connect. Even attempting to contact a lead three times instead of once will double response rates.
This is an important part of demonstrating value to your client. It’s easy to send a blanket response to any new lead with some company information. What makes a huge difference is sending a response tailored to the behavior and needs of that lead. By referring to actual elements of your lead’s request, you’ll show that you’re attuned to his or her needs.
After you have worked on the first 3 Ps, you need to make sure it is having good effect. If you put in the effort to send out emails to all your prospects only to have them end up in a spam folder, it will do you little good. Our recent 2017 Sales Effectiveness Report showed that for 67 percent of those companies that received an A in personalization scored a B or higher in performance. It pays to personalize the message to the lead.
Is should not be overlooked, however, that overall emailing habits also play a role. If you are not respecting your leads with frequency of sends, weighting the majority of your emails to being more educational than sales oriented, and only sending to leads who opted-in to your system, no amount of personalization will save you from the Spam Box. Treat your leads well, they are the ones dictating your spam score.
Increasing your SQL conversion rate isn’t easy. Your sales team will have to put in the time and effort to turn qualified leads into customers. And your marketing team will have to ensure it is doing the necessary nurturing to set sales up to be successful. One way to scale sales effectiveness is by leveraging conversational AI to help guide leads from the MQL stage into a fully qualified SQL ready to engage with a salesperson. An AI will provide the safety net so that leads aren’t lost in the shuffle. Not only will your marketing and sales teams be able to thrive, but you’ll be able to help more people with your solution.
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