How excited would you be if you doubled the number of leads your marketing campaign was generating in less than a month? What if you found out that the improvement wasn’t an improvement at all, because as lead quantity went up, lead quality was going down? That’s exactly what happened with a campaign I ran once. I can assure you – it’s not fun!
One survey of B2B marketers found that their #1 and #2 challenges were generating high quality leads and converting leads into customers:
Your Landing Page Conversion Rate Is Only Half Of The Story
Converting visitors to leads is only half of the story – generating high quality leads that convert into customers is also incredibly important for marketers. Optimizing solely to improve visitor-to-lead conversion rates often results in generating more leads, but lower quality leads. That’s a great way to annoy your sales team!
MarketingSherpa research shows that 61% of marketing departments send all leads directly to sales, but only a quarter of those leads are ever qualified. In other words, three-quarters of the leads marketing sends to sales lead to nothing.
As marketers, it’s tempting to treat leads like that infamous package delivery driver we all heard about a couple years ago. Just throw them over the fence to sales – we generated the lead, closing it is their responsibility!
There’s A Better Way To View Leads
If our goal as marketers is to maximize company revenue, we need to focus not only on visitor-to-lead conversion rates, but also on lead-to-customer conversion rates. By tracking what happens after the conversion to lead, we can adjust our marketing campaigns to send sales higher quality leads that are more likely to close.
Marketers need to track what happens after a prospect becomes a lead:
Case Study: Lead Quality Is The Elephant In The Room
A few years back, my team was working on a Google Adwords campaign for a consulting firm. We didn’t have data for what happened after a prospect filled out the lead form, so we had to optimize based on visitor-to-lead conversion data. Here’s what happened:
As shown in the chart, we saw a dramatic in the number of leads generated, but didn’t significantly improve the qualified prospects (i.e. prospects the client spoke with and confirmed were valid prospects to sell their services to). What gives?
We sat down and talked with the client about their experiences with the recent leads and discovered that the highest converting keywords were generating unqualified prospects. So we turned off those keywords – that reduced the total lead number but improved the number of qualified prospects the campaign generated.
If we’d had lead quality data from the beginning, we could have saved our client money and achieved positive results faster.
Lead Quality vs. Lead Nurturing
If your leads aren’t converting into sales, is it because the leads are bad, or because they’re not being nurtured and sold to successfully? Trying to answer that question often turns into a never-ending circle of finger-pointing: sales will blame demand generation, demand generation will blame lead nurturing, and lead nurturing will blame sales.
The bottom line is that you need both: high quality leads AND good follow-up. There are plenty of articles that cover sales and lead nurturing best practices, so I’m going to focus this article on how to improve lead quality. Lead nurturing is of limited value if you’re trying to nurture low-quality, unqualified prospects!
As the old saying goes, you can lead a donkey to water, but you can’t make him drink. And it’s a lot easier to lead the donkey to water if he wants to go!
The same principle applies to leads – it’s a lot easier to nurture and close qualified leads who want to buy what you’re selling!
What Metrics Should Marketers Track After The Conversion?
Once a prospect fills out a lead form, many marketers track that as a conversion – game, set, match! But in most cases, filling out a lead form is just the start of the prospect’s buying journey. There’s still a long way to go and most leads will drop out before they close.
If we track the right metrics, we can better define success for our marketing campaigns. Instead of defining success as “more leads” we can define it as “more leads that convert into revenue.”
I suggest three basic types of data that conversion-focused marketers should start tracking after the conversion:
- Lead quality/qualification metrics – these metrics are the fastest to get, allowing marketers to make quick adjustments.
- Leads converted to paying customer – these numbers are the next quickest to get and correlate with revenue.
- Revenue generated by each lead/customer – these numbers take longer to get, but are the most accurate – this is what funds our paychecks, after all.
Post-conversion metrics should give you visibility into how well your leads are converting to money in the bank:
Leads Closed / Revenue Numbers
For most companies, defining which leads convert to customer and how much revenue is gained from each customer is relatively straightforward. Your sales and/or financial departments should have records of every customer and associated purchases.
The trickiest part in getting these numbers is usually figuring out how to match customer records from sales/finance with the lead records marketing has. You can use multiple fields (email address, website URL, company name, etc.) to help match the two data sets. In an ideal world, the matching can be automatic, but in the real world, manual matching is often required.
Lead Quality / Qualification Numbers
Choosing and tracking lead quality metrics can be pretty complicated, depending on what your organization does (or doesn’t) have in place.
What metrics should you track? How do you get the data you need? Here are a few tips and tactics that I’ve found successful:
- Study your sales funnel.
Understanding your sales cycle / sales funnel will help you identify what to track. One of the best and easiest metrics you can track is the prospect’s progression through your sales funnel – each step in the funnel is a lead status. The further the lead gets through the funnel, the higher quality it is.If your organization doesn’t have a sales funnel defined yet (68% of organizations don’t!), here’s an example one you can adapt from FitSmallBusiness:
- Get sales input.
Talk with your sales reps – ask them what they think makes a quality lead and what types of leads resulted in the most revenue for them.Keep in mind that what you’ll get back are opinions – use them to inform your lead quality tracking, but don’t take them as gospel truth. You may find out the type of leads sales thought was low quality actually results in a lot of revenue.
- Append lead data.
Data append services can give you demographic and firmographic information you can use to help estimate lead quality. For example:
- If your firm sells luxury real estate, a lead with household income of $50,000 per year is less likely to be a qualified prospect.
- If you sell an accounting software designed for large companies, a lead from a restaurant with 10 employees is less likely to be a qualified lead.
- Consider lead behavior. Lead scoring based on user behavior is a very popular method for measuring lead quality. In my experience, this approach can be valuable in some situations but misleading in other situations.Beware of high behavior scores caused by users that are unqualified but spend a lot of time browsing your website because they have a personal interest, are studying for a related class, wish they could afford your products or services, etc.
- Automation can’t do it all.
Most sales funnels have a step in the process where a sales representative talks to each lead to determine whether it is a qualified prospect. If it is, they’ll mark it as a sales qualified lead. This is a very valuable metric, because there are subtleties that automated metrics will always miss. No matter how good your lead scoring algorithm is, it will make some errors.
- Launch, then adjust.
Choose a few lead quality metrics to move forward with, then adjust as you go. After you’ve been tracking lead quality and revenue for a few months, you’ll have hard data to prove which metrics actually correlate with increased revenue. You can then update your lead quality metrics accordingly.
Once you know what metrics you’ll track, it’s time to set up end-to-end tracking.
How To Set Up End-To-End Tracking
Optimizing for lead quality is nearly impossible without end-to-end tracking – being able to track a prospect from their first website visit all the way through to all the purchases they make later. When a prospect signs on the dotted line and makes the purchase, your tracking should be able to tell you when and where they first learned about your products.
Depending on the size of your organization and the systems you’re using, there are two basic ways to implement end-to-end tracking:
If your organization is small and/or doesn’t use a CRM, manual tracking can be a simple, effective solution. The main change you’ll need to make is to modify your lead capture forms to include marketing source data with each lead record.
Depending on the software your website uses, there may even be a plug-in available that adds this functionality for you. For example, there’s a plug-in for Contact Form 7 on WordPress to capture lead source data with every form:
If your website software doesn’t have a plugin available to do the job, this feature can be easily added to most websites. Ask your developers to add the following features:
- Add code to the header of your website that detects and saves the referrer URL, current URL, and UTM parameters into a cookie on the user’s machine. This records the traffic source and landing page.
- If a cookie already exists on the user’s machine, don’t set a new one – this ensures that the cookie reflects how the visitor first entered your website.
- Whenever the user submits a form, add the data from the cookie as hidden fields on the form.
If your company is using marketing automation or CRM software to manage leads, you should probably incorporate your end-to-end tracking into the CRM.
Most CRMs/marketing automation systems have fields for recording the original source a lead came from. Many systems capture this information automatically if you fully integrate them into your website. FOr example, Hubspot has out-of-of the box support for end-to-end tracking:
Since every system is different, I won’t go into specific set up details here – contact your marketing automation/CRM company for details on what they support and how to set it up.
How To Build Lead Quality Reporting Using Microsoft PowerBI
Whether you’re using the manual tracking method or capturing the data into your CRM, you’ll need a quick, easy way to access the data. One great option is to import your data into Microsoft Power BI to create powerful visual reports.
Here’s how to do it:
- Download and set up Microsoft Power BI. The free version of the Power Bi Desktop is quite powerful and has all the features you should need for building this report.
- Get your lead data. Whether you’re using a CRM or manually compiling data, it will be easiest to build the reports if your data is compiled into a single spreadsheet. Here’s an example spreadsheet you can use as a template and/or to play around in Power BI. Your actual spreadsheet will, of course, vary depending on the data fields and columns you have.
- Import lead data into Power BI. On the splash screen, just click the Get Data link and follow the steps to import your spreadsheet of data.
- Create visualizations. It’s pretty easy to add charts and graphs to your report to visualize your data. On the right side of Power BI, just click the visualization you want, then drag and drop the relevant data fields in.
- Filter and slice your data. Here’s why I love using Power BI for this report – you can automatically filter by any data field to drill down into your data. If you want more granular drill-down capabilities, add a slicer visualization to your report:
Here’s an example visualization, showing which leads were qualified by sales with the option to segment by traffic source:
How To Improve Lead Quality
Now it’s time for the rubber to hit the road. You’ve identified your key lead quality metrics, you’ve set up end to end lead tracking, and you’ve created a report for quickly analyzing this data.
Now, how do you improve lead quality?
Here are some of the tactics that I found successful over the years, along with some tactics gleaned from case studies by other marketers.
These ideas for improving lead quality are just that – ideas. I’ve used and proven these ideas work for me, but they may not work in your situation.
The key to lead quality optimization is collecting end-to-end tracking data and letting the data guide you. You may be surprised what you learn!
About The Author
Adam Thompson is a conversion-focused digital marketer with 15 years of lead generation and conversion optimization experience. He’s currently SEO / SEM manager at ComodoSSLStore, a provider of digital certificates and cybersecurity products located in St. Petersburg, FL.