The Innovative Marketer's Blog

Why Sales Qualified Leads are a Terrible Success Metric

Danielle Winkler
Posted by Danielle Winkler on Apr 18, 2014 2:35:00 PM

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There are a number of different metrics you can use to track the success of your inbound marketing efforts. When I started working in an agency, I was quickly indoctrinated into the belief that generating sales qualified leads (leads that have reached out to be contacted by sales) was THE name of the game.

As far as I was concerned, sales was a mysterious black box that I threw leads into. Because none of my clients had integrated their customer relationship management (CRM) system with their automated marketing software I could never see whether their sales team was updating these leads as opportunities, junk, or customers. Once those leads entered that black box I could only assume that some customers were coming out the other end.

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My rudimentary understanding of sales

Was I generating sales qualified leads? Yes, plenty. Was I generating customers? I had no idea. So when it came time to try to measure ROI (something anyone throwing vast amounts of money at you is apt to ask for), the math got pretty fuzzy.

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Pictured above: no CEO ever

Without customer data, there is no way to measure how effective your marketing efforts are at winning more customers (duh). Sure, sales qualified leads can be a decent approximation most of the time, but equating the two is a slippery slope. Let me tell you a story about a client I thought was doing fantastic on their paid advertising campaign.

Story Time: When "Sales Qualified Leads" Aren't Sales Qualified

We were doing a 3-month trial period of using Google AdWords and wanted to evaluate whether it was worth the investment to continue. Since we had no CRM integration, we were looking at the quality of leads the campaigns generated. When it comes to breaking down lead quality, I look at the lifecycle stage – are they just “information qualified” (essentially information freeloaders), or have they become marketing or sales qualified and shown explicit interest in the client’s brand or reached out to talk with sales? When I looked at this data in HubSpot, the vast majority (85%) of these paid leads were sales qualified.

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From a lead quality perspective, the data we were seeing in HubSpot made these leads look like serious dollar signs. Paid leads were steadily growing month to month, and the vast majority were converting down the funnel into sales qualified leads (they were requesting product quotes). We could even see that these leads were viewing more pages than the average lead on our site. Face-value, these looked like poster children for quality leads and the smart recommendation would have been to invest more money in this campaign.

There was just one catch – our client cross-referenced the list of sales qualified leads that came in through the PPC campaign with their CRM and found out that not a single one of these 40 sales qualified leads turned into a sale.

Obviously once we found that out we paused the campaign, but can you see where the problem of incomplete information could have taken us? If the client hadn’t checked this for himself we could have been spending another thousand bucks a month on paid advertising for months before he started to suspect it might not have been getting results. But without being able to see the customer data, we would never have known the PPC campaign was wasting money.

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... and we would never be able to Make It Rain

So why do so many businesses sold on inbound marketing not bother to do a CRM integration? Laziness, intimidation, “not enough time,” lack of expertise… you name it, we’ve heard a lot of different excuses from our clients. The most common scenario is that the CRM is being used as an administrative tool to assign leads to sales reps – not as an analytics tool to track the quality of the leads (which is where the real value lies). So the thought of the effort required to change old habits and teaching/enforcing your salesforce to actually record lead information may seem daunting. But if you want to ensure you’re making informed decisions based on the quality of your leads (and be able to measure your marketing ROI), you need to be able to look at customer data.

What to Do About It

Option A: Man up and do a CRM integration with your automated marketing software. Your marketing decisions will be much more informed when there’s instant and automatic feedback from your sales team on whether or not the leads you’re sending them are actually good.

Option B: Even if you’re not ready for a full-fledged CRM integration, at least get a list of recent customers on a monthly basis. This can be a simple Excel file with all of their email addresses in one column. You can upload this list into HubSpot and update the corresponding HubSpot leads to be tagged as customers. Minimal effort to maintain, big analytics payoff.

Option C: Continue to just push out what you hope are Sales Qualified Leads and cross your fingers.

(Don’t go with Option C).

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Topics: Lead Nurturing, Lead Generation, HubSpot