Lead generation is the primary goal of an inbound marketing strategy; however, it takes more than just leads to grow a successful business. An effective marketing strategy focuses on targeted leads to optimize the conversion rate. The more targeted the prospects, the more efficient use of marketing dollars.
While marketing to a specific demographic can help you reach highly-targeted leads, more information is often needed to determine if they are actually qualified leads. Depending on the type of campaign, conversions can identify qualified leads, pinpoint areas along the sales funnel in need of improvement, and help determine if you’re using your resources in the most efficient manner. Understanding qualified leads and conversions is essential to optimizing our Return on Investment (ROI).
WHAT ARE QUALIFIED LEADS?
Qualified leads are those that have a high probability of converting. Within this broad definition, there are different levels of qualification. For example, a marketing qualified lead is someone who has shown some level of interest–perhaps they downloaded a brochure or registered for a webinar. Inbound leads may be ready to purchase at some point, or they may still just be browsing. Further qualification may still be needed to determine if the prospect is a true sales lead, where they’re hot to make a purchase or decision. One set of criteria used to qualify leads is known by the acronym, BANT. First introduced by IBM, the letters represent budget, authority, need and timing. Although these are highly relevant criteria for qualifying leads, it’s crucial that we don’t overlook the two most important aspects of a qualified lead: interest and intent.
While lead qualification is necessary to ensure the most efficient use of our marketing budget, developing too rigorous of criteria may disqualify some sales producing leads. For example, suppose we are selling computer equipment priced at several thousand dollars. If we base our lead qualification on the BANT criteria alone, our marketing leads would require a specific budget to qualify as a sales lead. Assume a college student in his early 20s, working a part-time job, filled out a request for more information online. We sent him the information, but never followed up on the lead, since he didn’t meet our budget criteria. The same college student had a credit card, interest and intent to buy. When we didn’t follow up, he purchased the computer from our competitor.
A conversion occurs when a customer who has interacted with specific marketing communication carries out the desired action. This may include filling out a contact form, opening an e-mail or making a purchase. We can use conversions to determine how effective our marketing strategy is along each step of the sales funnel. For example, if we find that the click-through rate (CTR) of our ads is low, it may indicate that our ad is deficient of one or more major components: attention, interest, desire or action. If our CTR is better than average, but prospects are failing to opt in once they reach our form, the ad copy may need to emphasize more benefits.
Conversions are one of the most useful metrics available for determining which areas of the lead management system need strengthening. A website with a high bounce rate that has the same engaging content as a high converting blog may be in need of a redesign. When it comes to converting sales, a large number of abandoned shopping carts might tell us that the shopping cart is difficult to use. We may increase conversions by replacing that shopping cart with a more user-friendly version. Perhaps there are too many distractions on the page, or the shopping cart isn’t functioning properly. Conversions provide valuable information that enables us to allocate our resources effectively.
WHY ANY OF THIS MATTERS
By establishing a qualification process to better understand a potential lead, you can market smarter to that person and improve on the chances that he or she will become a customer. Closely monitoring the metrics surrounding the consumer path to purchase, such as the conversion rate, provides you the insight needed to adjust marketing spend accordingly, or make modifications to messaging as needed.
Need help identifying your qualified leads? Need a smarter sales funnel to track the ROI of your marketing spend? Holler at us!