7. Lead nurturing 101
So you’ve managed to get a potential customer to register on your landing page. Congratulations! What do you do now?
If you are like many companies, the prospect’s information goes into an SFA system like Salesforce.com and sales gets alerted about the new lead. The problem is that up to 95% of prospects on your website are not yet ready to talk with a sales rep, according to research by Brian Carroll. They are on your site to research your product and your industry. Some of those prospects may be truly unqualified, but as many of 70% of them will eventually buy a product from you – or your competitors.
So what should you do with those leads?
Giving a non-sales-ready lead to a sales person is a recipe for disaster. Imagine how the first call might go:
Jim, my name is Mike, and I’m your sales rep from Widgets R-Us. I saw you downloaded our whitepaper “10 Ways to Improve Profits through Widget Optimization” and I wanted to know if you have any questions…. Oh, you haven’t read it yet? That’s OK. Do you mind if I ask you a few questions? Do you have a Budget approved to buy widgets? Are you the Decision Maker? When do you expect to purchase a Widget solution?…. Oh, I see, you’re just researching right now. OK, I’ll call back next month. Bye!
In this scenario, Mike is trained to ask for BANT criteria (Budget, Authority, Need, and Timing). Except for “Need”, these questions are entirely inappropriate at this stage of Jim’s buying process (and a little rude if Jim is a gatekeeper but not the final decision maker). As a result, Jim is left with a negative impression of the company.
At the same time, Mike is compensated for driving revenue this quarter, so this lead is useless to him and he’s left with the general impression that marketing-generated leads are no good. As a result, he’ll be more likely to ignore the next marketing lead he receives – which is why sales ignores up to 80% of all marketing-generated leads. (That’s like throwing away 80% of your marketing budget!) Lastly, unless Widget’s R-Us has a good process for recycling Jim back into marketing, Jim may never hear from the company again and will end up buying from a competitor.
Fortunately, there is a better way – lead nurturing. Lead nurturing starts by understanding that Sales executives don’t really care about leads. They want winnable opportunities in their pipeline. They care more about quality (defined as likely to drive revenue this or next quarter) than quantity. The implication is that leads should live in marketing, and that marketing should nurture leads until they are ready to become opportunities. Here is my definition:
Lead nurturing is the process of building a relationship by conducting an informative dialog that helps qualified prospects who are not yet sales-ready, regardless of budget, authority, or timing – and of ensuring a clean hand-off to sales at the right time.
(Of course, part of the nurturing process for a lead who doesn’t have authority should include getting in touch with the decision maker who does.)
- Decrease the percent of marketing-generated leads that are ignored by sales (from as high as 80% to as low as 25%).
- Raise win rates on marketing-generated leads (7% points higher) and reduce “no decisions” (6% lower).
- Have more sales representatives that make quota (9% higher) and a shorter ramp up time for new reps (10% decrease).
Additionally, anecdotal evidence suggests that prospects who are nurtured buy more, require less discounting, and have shorter sales cycles than prospects who bought but were not nurtured.
Lead nurturing is a rich topic, and I’ll continue to post more about it as well as Marketo’s upcoming lead nurturing solution. In the meantime, you can also download the first chapter of Brian Carroll’s book, Lead Generation for the Complex Sale, for additional information and tips.
Update August, 2009:
For even more information, download the Definitive Guide to Lead Nurturing, a practical hands-on guide for basic and advanced lead nurturing best practices plus worksheets for calculating ROI and measuring the impact of nurturing done well.
Update January, 2009:
Here are some more useful lead nurturing links:
- Lead Nurturing Best Practices and Tools: Compilation of lead nurturing resources.
- Getting Started with Lead Nurturing: Practical ideas for structuring your lead nurturing program (on-demand webinar).
- Unleash Your House Database with Lead Nurturing: Five tips for effective lead nurturing (blog post).