Our research has found that only 28% of business leaders think they have enough leads to hit their targets. However, in our experience, not having enough leads is usually a symptom of deeper issues in the business. And the solution to those issues is rarely to do more lead generation.
We caught up with two of our marketing directors from Lancashire & Yorkshire, Ian Webb and Kirsten Bolton, to understand why people often feel this way and what they can focus on to fix it.
Why is not having enough leads such a perennial issue?
Just about every business owner we speak to wants more leads. But the volume of leads isn’t always the real issue.
“Often this comes down to people focusing on the quantity of leads rather than the quality of the leads you’re getting and what you’re doing with them,” Kirsten says.
Lead quantity is easy to measure. Lead quality is less straightforward. This can push people to fixate on the number of leads, but not consider other qualification factors such as BANT (budget, authority, need, timeline) or whether the leads you’re generating are the leads you really want.
“You also need to consider where these leads are in the funnel,” Ian adds. “Ask two different people within a business what a ‘lead’ is and you’ll usually get two different answers. Some people define a ‘lead’ as an initial enquiry, others define it as someone ready to buy.”
This lack of clarity often leads people to focus on short-term tactics that rarely work, instead of a more strategic approach. “I’ve spoken to CEOs who think they need more leads, so they’ve sent two of their salespeople to walk around industrial estates knocking on doors,” Ian says. “With the best will in the world, you want to ask them why.”
Kirsten agrees. The pressure to get more leads can lead people to default back to tactics that have worked in the past but are unlikely to work right now. “A company I worked with was convinced that the way to get leads was leaflets because that’s what worked in the past. But the way that people look for information is just totally different these days.”
So how should business leaders shift from a tactical focus on lead quantity to a more strategic focus on lead quality?
Why you should focus on lead quality, not lead quantity
The logic is simple: if you improve the quality of your leads, you’ll need fewer of them to hit your targets. One high-quality opportunity that’s ready to buy is worth countless low-quality leads that won’t go anywhere.
Often, the best way to improve quality is to narrow your focus.
“I just finished a great piece of work with a construction firm,” Kirsten told us. “They wanted to compete with much larger competitors but had a smaller budget. So we asked ourselves: what are our best sectors? Who converts quickest? Where are our best margins? The education sector came out as the clear winner. So we’re focusing all of our efforts on that. We’re getting better conversions and the pipeline is great. And we did that by taking a step back and focusing on what leads we really want, instead of how many can we get.”
As Kirsten mentions, a key criteria for lead quality is the profitability of leads as they move through the sales process. This is something that people often don’t take into account.
“You have to understand the profitability of the lead from end to end,” Ian says. “I worked with a company that was ploughing a lot of money into generating and converting leads, but not tracking the overall costs at each stage of the funnel.
“They were happy because the sales meant revenue, but there was very little profit left because the costs were so high. We fixed this by doing exactly what Kirsten has already said. We reduced our markets and focused on the opportunities that usually had the best margins. We generated fewer leads but they were much more profitable and took less effort to get over the line.”
How to improve lead quality in your business
Improving lead quality often comes down to four things:
- Using your historical sales data to identify the best leads for your business
- Mapping out the ideal marketing and sales journey for that type of lead
- Measuring conversions at each stage of the journey
- Launching activities that will get people into your funnel so you can move them through the process
“It starts with a really systematic approach to defining what a lead is,” Ian says. “Then understanding your funnel from top to bottom and really focusing on conversions at each stage. In many ways, that conversion figure is actually much more important than the quantity.”
Data and measurement are key to this. Unless you have visibility of who your best leads are and how your funnel is performing, you’ll struggle to improve the quality of your leads and no amount of leads will ever be enough.
“It’s about knowing your data. I’m often surprised by how many directors don’t know how many leads they’re getting, or how many progress to marketing-qualified or sales-qualified leads. That’s usually the first thing I do. Spending time to get those numbers and help them understand what their conversion rates are and where the real issues are.”
Another key thing to focus on is the relationship between sales and marketing. “Not having enough leads” is often symptomatic of sales and marketing not agreeing on what a good lead is or how to work them.
“Lead generation through to conversion and close is a sales-and-marketing activity,” Ian says. “It's a business change process that requires both sides.”
Like any change process, the people involved are just as important (if not more so) than the data and the tools. So how can you approach getting marketing and sales on the same side?
“I always try to set up a group of people from both teams with the shared and explicit goal of increasing profitability,” Ian says. “Then we review the data from the very top of the funnel all the way through, and that usually produces a set of actions for both teams to focus on.”
Kirsten uses a similar approach to get both sides on the same page.
“Just getting both sides together and mapping out the customer journey is a great place to start. You’ll usually see quite clearly where your leads are stalling or dropping out. Just getting both teams together to do this simple exercise will be a great starting point and it’s usually very eye-opening.”
A quick checklist for MDs and CEOs
Before we wrap things up, here’s a quick checklist of questions and actions that will help improve lead quality in your business:
- Have you analysed your historic sales data to identify the types of customers and deals that have the best close rates, time-to-close and profit margins?
- Can you bring marketing and sales together to map out your customer journey from start to finish?
- Are you able to measure the conversion rates of each stage of your customer journey?
- How can you regularly review the performance of each stage of your sales funnel across sales and marketing?
When you have better leads and better processes, you can do more with less
It’s easy to think that the solution to not having enough leads is to do more lead generation, but most of the time you’re just perpetuating deeper issues. By focusing on the fundamentals - which is something our Marketing Directors are very good at (you can see some examples here) - you’ll find that you can generate more revenue and profit while spending less on lead generation.
