Hey Marketing: An Inquiry Is Not A Lead

 In Demand Generation

I had lunch with two leaders in the marketing technology and software startup space last week. We were discussing some of the biggest challenges marketers are facing today.

We all agreed that a common understanding of the difference between an inquiry and a lead continues to be one of the biggest mistakes marketing makes. And this drives a deeper wedge in the goal of marketing and sales alignment.

Research shows that as much as 71% of inquiries are completely wasted. And 36% are never followed up on.

The Bottom Line: When marketing gathers up new names from contact forms and dumps them over to sales, no one wins.

I spent the first 5 years of my career in sales. When I moved to marketing, I committed myself to two things: Marketing should be accountable for driving quantifiable business value. And marketing needs to partner closely with sales.

I spent about half my career in marketing creating, tweaking and optimizing the demand generation process, most recently for the world’s largest software company. And in the process, I somehow managed to accomplish both. We delivered a solid return on marketing investment. And we accomplished this by focusing on giving sales what they wanted: truly qualified leads.

So, what is getting in the way of so many sales and marketing conversations? Definition and clarity around the definition of a lead…

An Inquiry Is Not A Lead

Someone who downloads a white paper or registers for your webcast is not a lead. Someone who fits into your target demographic profile is not a lead. Someone who reads 10 blogs on your website is not a lead. Someone who clicks on your product / solution pages is not a lead.

What Is An Inquiry?

These are “raw responders.” These are inquiries.These are names and email addresses, and if you are lucky, phone numbers and company names and titles. These people are interested in getting educated on how to solve a problem. Your job is to figure out how many of those inquiries have the potential to become leads you can pass to sales.

So here’s the definition: An inquiry is a person who has done something to express interest in understanding how to solve a problem. That problem may or may not be relevant to your product. Your job is to find out if they are relevant. And there is only one way to know: you have to ask them!

Sales teams that attempt to follow-up on inquiries cannot make the math work. Sure, you might stumble on a qualified lead here and there, but too many inquiries are not qualified. And sales reps are typically not trained as call center telephone sales reps who know how to dial for dollars efficiently. So what is a lead?

What Is A Lead?

A lead is a qualified business opportunity. The only way to know whether an inquiry is a qualified business opportunity is to ask them. The most common definition of a lead comes from IBM who developed the BANT system years ago. You must reach the inquiry by phone, and find out if they have the Budget, Authority, Need, and a specific Timeframe for solving their problem.

Some have added to or modified the BANT qualification model, but the bottom line is that sales should never see leads from marketing that have not had some direct qualification, performed by a person, to determine if there is a real business opportunity.

How Do You Score A lead?

To make it easy, just assign a score to each of the criteria in BANT. You could make it 25 points each so that if they answer the right way a qualified lead has a score of 75 or 100. Leads who score under 75 can go into a lead nurture pool and re-contacted in a few weeks.

I would recommend weighting the Authority and Needs a little higher. But every business might look at this differently.

What Is The Average Conversion Rate From Inquiry To Lead?

There is a ton of research out there on lead conversion rates, and some of it is even done by industry. Some suggest the average conversion rate from inquiry to lead is 4.4%. Meaning you need 351 inquiries to generate a new customer.  Even “best practice” companies are only converting less than 10% of inquiries to truly qualified leads.

In my experience, even with a really optimized inquiry generation process will yield around a 4% conversion rate from raw responders. And you should achieve closer to 8% once you scrub out the “Mickey Mouses” and false data registrants.

There is a trade off that is worth thinking about: the lower your conversion rate from inquiry to lead, the higher the conversion rate should be from Lead to Sale. This maximizes the efficiency of the sales team so they are closing new business and not chasing unqualified prospects.

This also means you are likely not generating nearly enough inquiries. That’s why content marketing is so important to generating cost efficient leads. Attract visitors to your content, convert them to subscribers and nurture them with offers that help them move through the buying process.

What Are The Best Lead Stage Definitions?

Almost a decade ago, I was directed to implement a common Demand Generation Waterfall from the board of a startup where I ran marketing. It consisted of tight definitions around lead stage that include:

  • Inquiry: a net-new inbound responder to marketing content
  • Marketing Qualified Lead: BANT qualified
  • Sales Accepted Lead: Usually systematically (CRM) routed and agreed to be worked by sales
  • Sales Qualified Lead: Sales re-qualifies the lead and in some cases gets a meeting
  • Closed / Won Opportunity: Revenue!

A few years ago, Sirius Decisions updated their Demand Generation Waterfall to cover more complex realities like inbound vs. outbound inquiries and Sales-generated leads. If anything, the change reflects even deeper qualification by marketing, prior to sending leads to sales.

Qualification Matters!

The bottom line of all this for marketers: If you are sending inquiries to your sales team prior to a true qualification, you are wasting money and the precious time of your sales team.

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Showing 18 comments
  • Mael Roth

    I could not agree more with the headline. I get calls from companies all the time just because I downloaded a whitepaper and it’s annoying as hell… And I think I am not the only one with that opinion.

    Very interesting Michael – as usual :=)

    • Michael Brenner

      Thanks Mael, I know we can do a better job! Thanks for your support. I think the whole space of predictive modeling can help marketing as the technology matures and the data becomes more widespread.

  • Chelsei Henderson

    Brilliant points on the differences here. As someone with a marketing background, I understand why so many eagerly jump at the opportunity to call an inquiry a lead.

    There’s just something about that word “lead.”

    But you’re 100% right. In order for us to properly quantify our efforts, there’s gotta be a clear understanding between the two. Otherwise, like you pointed out, it’s wasting the time and money of our sales teams.

    Thanks for the reminder, Michael! 🙂

    – Chelsei

    • Michael Brenner

      Thanks so much Chelsei,

      It’s so easy to clog the system with unqualified inquiries. I understand the natural desire. But I also know from a sales point of view it’s like death to the marketing and sales relationship. Thanks for your support.

      Michael

  • Akram Husain

    Excellent, Excellent, Excellent. The issue is Marketers are the sales enablers. Once this culture is embedded & Marketer KPI’s (Shared) are aligned with Sales, they will tango with sales staff.

  • Ulrica Griffiths

    This is interesting. Michael suggests that Marketing should call in order to qualify and Mael great no more calls – how does that go together?

    • Michael Brenner

      Hi Ulrica, what I’ve found is that the best practice is not to call everyone. First time white paper downloaders should likely be put into a nurture stream to help them “down the funnel.” What has worked for you?

  • Jacqui Genow

    Michael, “inquiry” is going in my lexicon now.

    Though I do agree with Ulrica that I’m not sure how realistic it is to have Marketing be the one calling inquiries. Perhaps a direct email asking when they may be making a purchase decision and if they’d be interested in speaking with a sales person…

    • Michael Brenner

      Hi Jacqui,

      I’ve seen a number of different approaches work. In some cases, we routed all inquiries to a 3rd party call center that was trained in soluution selling. The average conversion rate was very low (~4%) but we paid per “lead.” And I’ve also seen the email nurture approach work as well. Open rates ~ 10-20% but then you still have to qualify live.

      If you test your own approaches, please share with us all here so we can learn what works for you.

  • Sunanth

    Hi Michael
    Excellent article!! You clearly showed the difference between a qualified and an unqualified lead. It does save a whole lot of time and resources if we are able to classify them and concentrate our energies towards creating marketing pieces that bring in qualified leads, that is a win for both sales and marketing!
    I have a question. Is a social media query considered an unqualified lead, and how do you suggest we qualify them?

    • Michael Brenner

      Hi Sunath, thanks for your support and question.

      I would say most definitely that a social media query is an inquiry not a lead unless the question was some kind of sales cue like “can I get a demo?” or “can I speak to a sales person?”

      The goal is to move that person from an unknown inquiry to a known inquiry. So I would ask them to connect on Linkedin and ask permission to setup a call with a trained inbound specialist who can qualify the person with some subtlety into a lead.

      • Sunanth

        Thanks Michael!

        Appreciate the response. Its spot on!

  • Jeff Harnois

    While I don’t agree that Marketing should be doing outbound calling (unless it’s for data collection purposes), I do think that sales organizations should have a low-cost capacity to reach out to those lower quality inquiries. The purpose is simply to mine the Marketing investment with the goal of turning the inquiry into an actual lead and move it down the funnel. If it remains an inquiry, then find a way to keep them warm until ready to engage and become a lead.

  • Candyce Edelen

    Hey Michael, great article, and thanks for including our site in your links! I see three problems recurring over and over with our clients – who all have long, complex sales cycles (4-10 member buying committees, 6-18 month buying cycle).

    1. If they wait for BANT to consider a lead qualified, then the lead is already in deep with a competitor. That’s the only way the “B” (budget) gets defined. Ideally, Sales needs to get in earlier to set vision and collaborate with marketing to nurture.
    2. If they wait for “A” (authority), then they miss out on the analysts and consultants that are often engaged to evaluate and shortlist options. So once again, they’re late to the dance.
    3. If marketing passes under-qualified leads to sales, then sales is reluctant to put much time into them. So they call the lead 1-2 times, even though research consistently shows that deals that closed usually took 5-9 calls before sales made first contact.

    We tried offering a service to qualify leads for a client several years ago. But we found it very difficult to effectively qualify since my team didn’t have as much product/customer needs training as the client’s internal team. So I’m not convinced that this kind of work can be effectively outsourced for complex, esoteric, enterprise technology.

    Curious as to your thoughts. I realize that this scenario is specific to these complex deals. A SaaS software sale would have a completely different experience.

    • Michael Brenner

      Thanks Candyce, most of my experience came from the largest enterprise software company in the world (SAP) where the ASP was over $200K and the sales cycle was 6-12 months. I think your point 3 trumps 1 and 2. So we both outsourced to a vendor with lots of training (pay for performance so they were motivated) and insourced the validation. First touch occurred within 24 hours! So routing the inquiries was really important.

      The extra time and quality more than made up for the cost in the form of higher conversions and sales and sales team trust that the leads we passed had as good a chance as any to convert to a sale. We literally produced more than 100,000 inquiries per year to get to a few thousand leads to get to a few hundred deals. But the revenue was millions more than the cost.

      Happy to discuss the approach if you like.

  • Jimmy Crimmins

    You’re only working when you’re ear to ear or face to face with a live qualified buyer.
    To much time is wasted chasing people who are wheel- spinners!

    Great article!

    Jimmy Crimmins/ Author Rockin’ Selling Secrets

    • Michael Brenner

      Thanks Jimmy, I think so many businesses make this mistake.