You don’t want just any leads.
You want qualified leads that are highly likely to convert to paying customers. But how can you attract more of them?
Here’s what we are going to discuss today:
- Why you should stop chasing quantity and focus on quality instead.
- How to optimize the top of your sales funnel for lead quality.
- How to identify the most promising leads with lead scoring and disqualify leads with qualification frameworks.
Ready to start generating leads that actually convert to sales?
The Lead Generation Dilemma Every Marketer Needs To Face
In his article “Facebook Lead Ads vs. Landing Pages: Which Is Better? [Data]”, senior SEO specialist at WordStream, Gordon Donnelly, discusses a dilemma that every marketer faces when generating leads: quality vs. quantity.
“The real issue here is not, are conversion campaigns more effective than lead generation campaigns?
It’s that Facebook lead gen seems to exist on this spectrum where the more we focus on increasing lead volume, the more we run the risk of losing quality; vice versa, the more we focus on quality, the more we run the risk of losing volume,” explains Gordon.
While he was talking about Facebook advertising, this applies to any lead generation method. There’s always a trade-off between quantity and quality. But which one of them is more important?
Why You Should Stop Chasing Quantity and Focus on Quality Instead
You have probably heard the term “vanity metrics” before. These are metrics that do not have a direct impact on your bottom line.
They are called vanity metrics because there’s a temptation to focus on improving them just because it makes you feel good, not because it helps to increase your revenue.
Is the number of leads a vanity metric? It depends on whether they are qualified or unqualified leads. But what’s the difference between the two?
- Qualified leads are your ideal customers: they know that they have a problem, they are aware that you are offering a solution, and they can afford to pay for that solution.
- Unqualified leads are not your ideal customers: they may not be aware that they have a problem, they may be unsure of what you are offering, and they may not be able to afford the solution.
It goes without saying that qualified leads convert to paying customers at a much higher rate.
Moreover, they make better customers, since they tend to be less likely to ask for a refund, need less support, and are more open to your other offers.
Of course, an unqualified lead may turn into a qualified lead over time, whether through becoming more aware of the problem, or learning more about what you offer, or simply improving their financial situation.
“So what’s the harm in getting their contact details then?” you may be wondering. “Who knows, maybe they’ll end up buying from me eventually.”
But you need to consider the fact that you have limited resources. Your time, energy, and money are finite. So when you spend these resources on acquiring unqualified leads, you have less resources left to invest in acquiring qualified leads.
And since qualified leads convert better, this means that you are missing out on potential revenue.
In other words, unqualified leads are costing you money, which is something that you can’t afford if you are serious about growing your business.
Example: Noah Kagan Saved 47% on His Email Bill by Pruning His Email List
When Noah Kagan, the founder of AppSumo and Sumo, saw his MailChimp bill, it made him sick. “$700?! No thanks,” he thought to himself.
At the time, they had around 105,000 subscribers on their main email list. But on average, only 19% of their subscribers would open and 2.5% would click each email.
“This means MOST people are NOT reading our emails. And this is probably true for you, too,” explains Noah.
But email marketing service providers charge people by the total number of subscribers… So he decided that it was time to prune his email list.
He targeted “not active” subscribers that he defined as people who haven’t engaged with any of their emails in 3 months.
Noah ended up reducing his email list size from around 105,000 subscribers down to 72,000 subscribers. As a result, his email marketing bill went down by 47%, from $719 to $375 per month (savings of $4,128 per year).
“Your ego will be hurt going from 105,000 email subscribers down to 72,000 (like we did),” he says. “But at end of day, worry about results not vanity.”
This is a great example of how unqualified leads are costing you money: you not only pay to acquire them, you then pay to keep them on your email list.
It’s best to avoid acquiring unqualified leads in the first place. Of course, that is not always possible, but simply being proactive about qualifying leads can drastically increase lead quality. And that is going to have a direct impact on your bottom line. – Read more