Sales and marketing teams often have a very different picture of the sales funnel. They might disagree about the number of stages a lead passes through before becoming a customer – and they often use different terminology to describe those stages.
To get the most out of your sales and marketing teams, they must have a unified picture of the funnel and standard definitions of each stage in the process. Without this, an alignment strategy isn’t possible.
3 Steps to Defining Sales Funnel Stages
1. Understanding Lead Quality
Focus on the definition of a Marketing Qualified Lead (MQL). This is the crucial hand-off point between marketing and sales, so it’s essential that the teams agree on the terminology. Every company’s definition of an MQL will vary, but it should reflect a combination of traits and actions that indicate a lead is both a good fit for your company and ready to talk to a sales person.
Here’s an example of how to examine your funnel to assess lead quality and determine whether a lead is ready for sales follow-up:
- Is the Lead a Good Fit?
Your company might target financial services companies with 5,000 or more employees, or small service businesses with fewer than 100 employees. Or, you may be only interested in manufacturing companies of any size. Within those categories, you also might identify individual lead profiles, such as title or job description and role in the decision-making process – e.g., economic buyer, end user, and influencer.
How closely a lead hews to your ideal customer profile will determine whether and when you hand it over to the sales team.
- Is the Lead Interested?
A lead’s activity can reveal how close they are to a buying decision. For example, if a lead has only visited your website once, or has just begun following you on Twitter, they may be aware of your company but are not particularly engaged. But a lead that requests a demo or views pricing information is showing a lot more interest.
2. Using the Lead Matrix
Where a leads falls within the four quadrants of the lead qualification matrix dictates the next step your marketing or sales team should take. For example:
Good Fit and Interested: Leads in upper right quadrant are a good fit for your company and are highly engaged with your marketing. These are hot leads that require immediate follow-up from your sales team – usually in less than 24 hours
Good Fit but Less Interested: Leads in the upper left quadrant are a good fit for your company, but don’t show a lot of interest yet. Perhaps they’ve only signed up for an email newsletter or downloaded one piece of educational content. These are leads that the marketing team need to nurture.
Lots of Interest but not a Good Fit: Leads in the lower right don’t necessarily fit your ideal customer profile, but are highly engaged with your brand. They might have subscribed to your blog and email newsletter, downloaded your eBooks, and attended your webinars. It’s worth having a sales rep do a low-cost follow-up with these fans to see if there’s an easy sale to make from a non-traditional customer.
Sometimes leads that don’t seem like a fit have a good reason to buy your product. They can also turn into great evangelists for your products or services, thus providing you with indirect support as non-customers. That’s why you can’t automate the entire sales and marketing process. At some point, a good marketer or sales rep can spot an opportunity that your systems might overlook.
Little Interest and No Fit: Leads in the lower left quadrant aren’t a good fit for your company and haven’t shown much interest in your marketing content. They’re definitely not worth a sales rep’s time. Don’t be afraid to take them out of your communication stream. By having a clean list of more engaged subscribers, your email and social messages will show better results.
3. Developing Your Definition of an MQL
Using this matrix as your guide, develop a Marketing Qualified Lead (MQL) definition based on the combination of fit and interest that’s right for your company. Some marketers may focus more on fit because they have a tightly defined market; other marketers may have a broad customer base and focus more on interest level. That decision depends on your business model.
Whichever approach you chose, base your definitions on data – not on gut instinct. Even experienced marketers and salespeople can be way off base in their assumptions about what makes a good lead.
Here are some common criteria that can help you develop a lead score:
- Examine Behavioral History: Examine the activity history of recent customers and analyze how many actions they took before becoming a customer – i.e., the number of page views or number of conversions, such as downloading a white paper or registering for a webinar, etc.
- Find Patterns: Look for patterns that indicate a lead’s likelihood of closing. For example, if a lead that downloads 10 pieces of content from your website or visits your site more than 15 times in one month is more likely to close, you can incorporate those frequency measures in your MQL definition.
- List Activities: Also list all the activities that a lead can take before becoming a customer, and analyze the close rate for each one. For example, to determine the close rate for a webinar, look at all customers that had watched a webinar, then divide that number by the total number of leads that originally registered for the webinar. That gives you the close rate for leads from that particular event.
- Calculate Close Rates: Using the close rates for individual actions, calculate the average close rate for all your marketing activities. Then look for actions that have a significantly higher close rate. For example, if your average close rate is around 1%, you might find a handful of actions that have a 3%-5% close rate.
Add these top-closing events to your definition of an MQL. Any lead that engages in at least one of these activities, and is a good fit for your company, would be considered an MQL. Also use those close rates to decide what score to give different activities in your lead scoring or lead grading system.
Once you've completed these steps, your sales and marketing team's funnel stages will be unified and you'll be better situated when continuing with the rest of your alignment strategy.
