As a Customer Success Lead at Zopto, I’ve come across several clients who are more focused on the quantity of leads rather than the quality. While our platform is excellent at delivering a ton of leads, many businesses believe that the more leads they have, the better it is for their sales team. This is not entirely true and may even be a little short-sited.
Richard Lloyd, Customer Success Lead, Zopto
More doesn’t always mean better. In fact, having an abundance of leads can often result in a good number of them being low-quality, that never had the chance of converting into sales. In this post, I’ll discuss the importance of lead quality and how it can help businesses increase their ROI.
So, what is Lead Quality?
Lead quality refers to the process of identifying and targeting a high-quality audience that has a higher chance of converting into paying customers. High-quality leads are those that are more likely to engage with your brand, have the budget to purchase your products or services, and are a good fit for your business.
Why does Lead Quality Matter?
Having a large number of leads may sound like a good thing, but it’s not the most effective way to grow your business. Think about it. If a good portion of your leads are low-quality it will result in a low conversion rate and a waste of time and resources for your sales team. Wouldn’t you rather focus on quality leads that are more likely to become paying customers and provide long-term value to your business? I’m pretty sure you would.
According to a study by MarketingSherpa, 61% of B2B marketers send all leads to sales, but only 27% of those leads are qualified. That’s ridiculously inefficient. This means that a majority of leads and aren’t worth pursuing. Your sales team had to spend the time vetting each lead through either online research or contacting the lead in some fashion, only to check the “unqualified” box in your CRM dashboard. Let’s do better than that.
Here’s why it’s essential to focus on identifying and targeting high-quality leads to improve your sales performance.
Benefits of High-Quality Leads:
- Increased Sales Performance: High-quality leads are more likely to convert into paying customers, which can lead to increased sales revenue and a higher ROI. It’ll also make your reports look stellar.
- Improved Customer Retention: High-quality leads are more likely to become loyal customers, which can lead to repeat business and improved customer retention. There are costs associated to acquire new customers. It is awesome when that cost-per-acquisition (CPA) is amortized over the long-term-value (LTV) for that customer. For instance, if your ratio for a CPA is 4:1 – that is, $25 for a $100 sale – and that high-quality customer purchases 3 times, that ratio and performance is increased to 12:1, or $300 in sales for only a $25 acquisition cost. That’s a huge difference.
- Reduced Sales Cycle: High-quality leads are more likely to be interested in your products or services in the first place, which will reduce the sales cycle and improve your sales team’s productivity. Plus, any friction between you and your sales team will quickly disappear.
- Improved Marketing Efficiency: Targeting high-quality leads can improve your marketing efficiency by focusing your resources on those who are more likely to engage with your brand and become paying customers. Who wouldn’t want that?
Okay, so the next natural question would be how to identify high-quality leads. Here are the steps:
- Define Your Ideal Customer Profile: Start by defining your ideal customer profile, including their demographics, industry, job title, and importantly, their pain points. This will help you identify the types of leads that are most likely to be a good fit for your business.
- Use Data to Identify High-Quality Leads: Analyze their engagement with your brand, their behavior on your website, and their interactions with your sales team. It also serves to look introspectively at your best existing customers, and mine that data to define habits and patterns.
- Use Lead Scoring: Lead scoring is a process of assigning a score to each lead based on their level of engagement with your brand and their likelihood of becoming a paying customer. This can help you prioritize your leads and focus on those that are most likely to convert. Send only the leads that sore high to your sales team and shelve the rest.
- Use Social Media to Identify High-Quality Leads: Social media is a powerful tool for identifying high-quality leads. By using social media platforms like LinkedIn, you can target leads based on their job title, industry, and other relevant criteria. The ability to “micro-targeti” is a massive benefit that will put your messages in front of only the most relevant prospects.
Based on all this, when it comes to LinkedIn leads, it’s pretty clear that more is not always better. Businesses should focus on identifying and targeting high-quality leads that are more likely to become paying customers and provide long-term value to their business. By focusing on lead quality, businesses can improve their sales performance, customer retention, and marketing efficiency. The climb to the fatter, juicier, and sweeter fruit may be more involved, but it is well worth the effort in the end!
About the author:
Richard Lloyd is a results-driven professional with nearly 20 years of experience in sales, business development, and customer success. He currently serves as a Customer Success Lead at Zopto, managing the customer success team and developing strategies to drive growth and retention. Richard is a strategic thinker with excellent communication and leadership skills.