How well does your sales team follow up on marketing-generated leads? If you’re like a lot of other companies, sales follow-up rates are pretty poor. According to Forrester Research, 29 percent of business-to-business (B2B) marketers say their sales teams follow up on less than half of the leads marketing generates. Another 16 percent say they have no way to track what leads are followed up on.
This makes it pretty hard to measure the contribution that marketing delivers to the bottom line.
Beyond the challenge of getting sales to follow up on leads, the majority of B2B marketers also admit that fewer than 10 percent of marketing leads result in a sale, according to Forrester. Another 14 percent say they have no way to track which leads yield a sale. A pretty sorry state of affairs for marketers struggling to prove their efforts’ value.
Why doesn’t sales follow up on more leads, and why don’t more leads result in a sale? If your company is like many B2B firms selling through a direct sales force, it’s likely you sell a somewhat complex product — certainly not an impulse buy. In reality, your sales cycles are at least weeks and probably months. The reason for poor follow up and poor closure rates on marketing leads is that many leads simply aren’t ready to buy. In fact, a RainToday.com study of approximately 400 professional service firms found that, on average, only 10 to 30 percent of leads generated by marketing are ready for a conversation with sales. At least half of marketing-generated leads require further nurturing and the remaining 25 percent or so are simply thrown away.
That said, I continue to find that when I survey large audiences of B2B marketers, most still simply pass the contacts they generate via a marketing tactic (direct campaign, trade show, Webinar, etc.) along to their sales team and move on to their next task.
Let’s take a practical example: a Webinar. Let’s say 250 people register for a Webinar. Of those, two-thirds don’t show up for the event (Webinar attendance averages at just over 30 percent). So you lose 167 people at the get go, leaving you with 83 people who show up for the event.
Using the numbers from the RainToday.com study, let’s assume that 25 percent of the Webinar attendees are considered contactable leads by your sales team. Now you’re down to only 21 contactable leads out of your initial pool of 250.
But what about all the other contacts? According to the RainToday.com study, you’ve got 42 valid prospects who could become good leads. They just require more nurturing.
You also have those 167 people who, for whatever reason, registered for the event but didn’t show up. Let’s assume that based on the information provided when they registered, 25 percent fit the profile of a good lead and 50 percent as possible prospects. You’ve got another 125 contacts that marketing could be — should be — working with to establish a dialogue.
If this generally describes how your organization manages lead generation, then you’re missing a significant opportunity and wasting precious marketing resources. First, you’re spending a bunch of money to generate leads. Then, your sales team cherry-picks the best leads. The lion’s share of your leads fall back out of your sales net because they aren’t ready to buy and sales isn’t interested in nurturing them. What happens next? Often, you spend more money to try to pick the same leads up again as they move further into their buying cycle.
Plugging up this hole requires integrated lead management practices that:
- Emphasize lead quality and evaluate readiness to buy
- Incorporate lead-nurturing programs to warm up the leads that aren’t ready to buy or worthy of your sales team’s attention
- Close the loop with sales
I’ll examine integrated lead management and drill down on each of these best practices in my next column.
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