Why is it Important to Define a Qualified Lead?
Sales and marketing teams collaborate to effectively manage the customer journey and to deliver the right message to the right prospect at the right time that encourages a sale. Without a common, formalized definition of what constitutes a lead, or what criteria must be met for a lead to be converted into an opportunity, how can marketing teams determine which leads should be passed on to sales? How can sales teams ensure that they are communicating the right messages to prospects that are ready to buy?
To ensure that customers are nurtured appropriately throughout the customer journey, marketing and sales must agree on a definition of a qualified lead. The ability to track individual behavior and engagement for each prospect, along with clearly established criteria for every step of the customer journey, ensures that leads are appropriately qualified before they are passed to the sales team as opportunities.
Establishing a formalized definition of a qualified lead promotes alignment between marketing and sales teams, reduces inefficiency, improves the customer experience and ultimately drives revenue and sales growth for the organization.
Qualified Lead Definitions and Why They Matter
Consider how the following data reveals a lack of alignment between sales and marketing at some of the world’s top sales organizations:
In their 2014 Sales Performance Optimization Analysis report, CSO insights published data indicating that lead definition was an area of opportunity for improving alignment between sales and marketing. At the time, 49.7% of organizations reported that sales and marketing had a formalized definition of a qualified lead, 31.1% had an informal definition, and 19.3% organizations had no formal definition of a qualified lead.
Five years later, CSO published a 2019 version of the same report. Shockingly, it was reported that the ratio of organizations with a formalized definition of a qualified lead had actually fallen from 49.7% in 2014 to 29.5% in 2017! In addition, 43% of organizations in 2017 reported that they had no formal definition of a qualified lead.
Research also shows that just 34% of organizations without a common lead definition were able to convert leads into sales conversations more than half the time. In contrast, 63% of organizations with a clear definition for a qualified lead were able to convert more than half of leads into sales conversions. The best available data shows that establishing a clear definition for a qualified leads results in improved marketing/sales alignment that can actually drive conversions.