It’s acceptable for every company to have it’s own definition of exactly what constitutes a lead for you. We’ll come back to this, but for the moment, let’s skip past it and drill down to marketing-qualified leads (MQLs) and sales-qualified leads (SQLs).
The question here is – do your marketing and sales departments agree on leads definition for each other?
Why MQL and SQL Definition is Important
The reason this is important is because you need to align sales and marketing into a seamless unit. This alignment, better known as smarketing, can only happen when both teams sign on to service-level agreements (SLAs) with each other that lay down clear definitions for MQLs and SQLs.
In case you’re wondering why you need to align sales and marketing in the first place, the slide below below says it all.
This is more important than before, because the new generation of B2B marketers and buyers is extremely fragmented across a lot of different channels
Leads from your website, referrals, email marketing, social media, ad campaigns and other sources all need to be mopped up and fed into a CRM, and then the lead management process takes over. You have to do lead scoring and qualification and take the lead forward in the buying cycle to a point where the lead can be labeled as sales-ready
The tipping point is where your lead begins to show an interest in or readiness to buy your product / service. This may be decided based on multiple factors (repeat website visitors, downloads, etc.) that all carry weightage in the lead scoring system.
(Don’t know what visitors are doing on your website? Get Lucep. We send you weekly traffic analytics reports that show you the number of unique visitors, leads generated, visitor demographics, on-site behavior, page views, bounce rates, and other key metrics.)
Leads Definition for a Sales-Ready Lead
This whole smarketing discussion boils down to two things:
Can you get Marketing and Sales to agree on what is the definition of a sales-ready lead?
Can you get Marketing and Sales to agree on a time period within which Sales needs to start chasing down a lead that Marketing has handed over to them?
If you can get both departments to sign on to SLAs that lay down clear answers for both these questions, it entirely eliminates the constant bickering over why a lead didn’t pan out. Sales can’t say that Marketing is handing them unqualified leads that are not potential or interested buyers, and Marketing can’t blame the lack of conversions on lead response delays by Sales.
How to Create an SLA for Defining MQL and SQL
If you want to make sure both Sales and Marketing are on the same page, you can do it as a science – using lead data and calculations to create an SLA for both Sales and Marketing. A Hubspot post explains in detail how to create an SLA, what data you need, and what metrics you can use to calculate targets for each side that the other side agrees is fair.
How to Calculate Your Marketing SLA
SLA goals for the marketing side’s commitment include the number of marketing generated leads, how many customers this should convert into, and the total marketing-sourced revenue generated. In order to calculate these things, you need some data from your CRM and Google Analytics or whatever other analytics tool you are using. The data needed is (source – Hubspot):
Total sales goals in terms of revenue quota;
% revenue that comes from marketing-sourced leads;
Average sales deal size; and
Average lead to customer close %
So you can get Marketing’s revenue goal by multiplying the first two in the above list (sales quota and % revenue from marketing-sourced leads). Input this revenue goal, along with average deal size and your conversion rate, into any online traffic-leads calculator to get the number of conversions and leads required from Marketing. Now you have your Marketing SLA.
How to Set Sales SLAs
The Sales SLA is a commitment about the speed with which marketing-sourced leads will be responded to, and the minimum number of follow-ups that Sales will provide for each lead. Lucep data shows the importance of instant response to sales leads, with more than half of all leads giving their business to the company that responds first.
(Lucep, an instant response callback tool, connects your website visitors to your sales team within 60 seconds. Doing this will increase your website lead generation rate by up to 48% and your conversion rate by over 72%. Try lucep now.)
As for follow-ups, Hubspot data shows that a full 44% of sales reps give up after one follow-up, but 80% of sales happen only after five followups. So 6-9 follow-ups are recommended within a set period in order to ensure that you maximize your chances of a conversion happening before the lead goes into a nurture track.