Most B2B marketers declare that their most important objective is generating leads. However, since people use numerous definitions of a lead, this could result in serious problems in communication with sales departments and hinder evaluation of the marketers’ work.
That’s why today in ABC of B2B Marketing, we look at what is a lead, and how is it different from a prospect and a business opportunity. You will also learn how important it is to have a single, coherent definition of a lead.
Lead – the bone of contention
Most of the misunderstandings at the meeting point of marketing and sales departments which I have encountered had their roots in different understanding of the objectives of both teams.
The sales reps, knowing that the company has a marketing department that should be generating leads, expect to be given clients who simply cannot wait to receive an offer, served on a silver platter.
On the other hand, the marketers are tempted to send every last piece of information on the potential client to the sales department, even if it doesn’t contain any important data that would justify engaging a sales rep.
Most often, the cause is lack of a definition of a lead and lack of clearly precised objectives of the marketers and the sales reps in the selling process.
How to define a lead?
Let’s move on to what a lead is.
One glance at the dictionary definition is enough to give a person a headache. According to the Webster dictionary, lead has four meanings as a noun and five as a verb. Now we know where the confusion about the definition of a lead comes from.
A lead in a sales context is defined in the Webster dictionary as information that can guide us towards something. Therefore, a lead is any piece of business information that gives an opportunity to begin the selling process.
Still too general?
Create your own definition of a lead
I have bad news, dear reader. It turns out that there is no single definition of a lead that would fit every situation and company. Which is why it’s important to clearly define it in your organisation and then follow it rigorously.
A lead can be a very general information under one condition – it has to offer prospects of a further cooperation.
For this reason I believe that a lead is sharing any data that we can use in the process of communication with the potential client.
That is how a lead is different from a prospect – a marketing prospect (not to be confused with a sales prospect) is a piece of information which does not yet contain data allowing for contact. Prospects are anonymous users visiting our website, or conference attendants. In both cases we have to find a way to start communication.
A lead contains data which allow for further communication.
If you have on your website a form of subscription to a newsletter which contains only one field – e-mail address – you can treat filling this form as a beginning of a very early lead. If someone gave their e-mail address to a company and agreed to receive newsletters, there is a chance for further communication, which can result in a sale – and that is a lead.
A similar example would be acquiring a business card at an exhibition or a conference. In this case it would be good to get a formal consent to receiving offers.
Of course, such a lead doesn’t qualify to be passed on to the sales department. For the same reason, such an early lead should not be attacked with commercial offers. This paragraph started with „of course”, but unfortunately, such practices often take place. What happens then? We very quickly end up on the blacklists of the potential clients, and lose opportunity to move on to the next stage of nurturing the lead.
The difficult qualification of a lead
An early lead has to be developed, that is to say, additional information should be acquired, which will allow us to prepare personalized marketing campaigns, and in consequence, will open the door for sales reps to begin the selling process. We call this stage the qualification of a lead. Its purpose is to gather basic information, which will let us decide whether to engage a sales rep in the process.
The most widely known set of criteria to qualify a lead is the so-called BANT framework created decades ago in MIT for IBM, now applied in most corporations. It is composed of the following criteria:
B – Budget
A – Authority – the decisive power of a lead
N – Need – the need to possess our product
T – Timeline – the time frame of the purchase decision
It is the most popular set of qualification criteria, but since it was conceived in times when nobody has heard of digital marketing, its employment causes much trouble. There are a few challenges:
Estimating a budget in the stage of marketing activities can be very difficult. Few clients would share this information in the early stage of contact with a company. Estimating the decisive power of our contact can be misleading as well, since in most organizations purchase decisions are made by a group of people forming a formal or informal purchase commitee.
This is the reason why the BANT criteria were working well for companies that employed telemarketers, whose first objective was to make conversations to profile the leads and set up meetings with the sales reps.
Scoring better than BANT in digital marketing
If you have at your disposal digital marketing tools that let you analyse the interactions of a potential client with the content you share with them, applying appropriate scoring criteria to these behaviors will be a more effective lead qualification tool.
In short, the process involves engaging the client in a set of interactions – reading an e-mail, downloading an e-book, attending a webinar or a conference – while simultaneously acquiring information, for example on the size of the company, the job title, or the objectives of our contact. It is often done using valuable content that one can download after sharing a small amount of information.
In this way, we gather information on who our contact is and how they behave on our website – which content do they read, which messages do they open, etc.
Systems such as Oracle Marketing Cloud allow to define very precisely the scoring criteria, so that our understanding of the “maturing” of a lead is based on data, not on assumptions. It’s important for the sales department to take part in the process of defining the scoring criteria, that is the evaluation of the quality of a lead. Firstly, their insights will be crucial to choose the right criteria – the behaviors that really count. Secondly, it’s a perfect occasion to explain to the sales reps the logic of marketing automation system’s operation, thanks to which their expectations concerning its outcomes will be realistic.
Most often, the scoring criteria need further tuning based on practical conclusions. This is normal. At first, many criteria are introduced basing on our best knowledge, which is not however supported by experience.
Complex marketing automation systems – such as for example Oracle Marketing Cloud (Eloqua) allow to create several scoring matrices. It’s very useful in a situation where our clients, as well as the set of activities directed at them, is highly diverse.
A basic example would be the segmentation of a base by the size of the clients. For big clients we organize business breakfasts, classroom trainings, and study visits. The fact of attending such a meeting would be recorded in the system and have a positive impact on scoring. In the case of minor clients we do not offer such actions, so they will not have a chance to score these points. With such diverse groups, it’s recommended to create separate scoring criteria.
Marketing Qualified Lead
Having at our disposal marketing automation tools, we gather this data and score it according to the criteria defined earlier with the sales department.
That way we know that for example our contact is head of IT in a medium-sized organization and is very interested in the question of protecting smartphones from unauthorized access. We also know that they visited our website five times in the last month and downloaded 2 e-books. However, we had agreed with the sales department that we only pass on to them the contacts that attended a webinar. If they spend an hour at a webinar, it seems that there is a fair chance to begin a successful selling process.
Of course, these are just example criteria. What is important is that they are defined in cooperation with the sales department, so that the nurturing of the lead becomes a joint responsibility of the marketers and the sales reps.
We can call such a lead a Marketing Qualified Lead – a lead qualified by the marketing department to be sent to sales.
Sales Qualified Lead
The next stage is qualifying the lead for selling activities, that is to say Sales Qualified Lead.
Here, I think the above-mentioned BANT criteria could be useful. During a meeting or a call, the sales rep can clarify the issues of decision-making, budget, needs, or the perspective of making a purchase decision.
Most often, the sales reps call this kind of qualified lead a Business Opportunity, in their jargon – an OPP or a BO. This is the moment when a lead turns into a business opportunity and lands in CRM.
As you see, a prospect requires a lot of work to become a lead, and then a business opportunity. One needs to gather extra information, and at the same time skillfully share knowledge with a potential client. Thankfully, digital marketing tools help to manage this process. However, it’s important that sales reps and marketers in your company all have a similar understanding of what a lead is and what actions to take after acquiring it. The best practice is engaging sales reps into creating lead qualification criteria and joint periodic evaluation of whether these criteria are still relevant.
Such a process facilitates understanding and cooperation between the marketing and sales departments, as well as makes both sides feel responsible for the whole process of generating leads and their conversion to sales.
Lukasz Kosuniak – Digital Marketing Partner, Grow Poland