How Do You Define a Lead?
A lead is a potential contact, individual, or organization that expresses an interest in your goods or services. Typically, the marketing department is responsible for generating these leads to pass onto the sales department to pursue and convert.
Leads are important for any organization; they are what will eventually (hopefully) turn into a sale. Having a lead definition leads to the SLA (Service Level Agreement) on how soon Sales will follow up on MQL’s (Marketing Qualified Leads) provided to them by Marketing. If Sales doesn't follow up on the lead soon enough, it grows stale. Subsequently, Sales will declare that the MQL that Marketing provided was NOT a lead, whereas Marketing will say it was. Having an SLA resolves this issue. Both sides need to speak the same language and have the same understanding of the criteria that define a lead.
When everyone agrees upon a similar goal it is easier to keep that goal aligned and increases overall success.
Get ready for some more acronyms.
Most sales and marketing professionals are familiar with using the BANT methodology to define and qualify a lead.
Here’s a quick breakdown of BANT
Budget: Does your prospect have the budget to buy?
The first thing you need to find out about your prospect is if they have the budget to buy your product. It doesn’t matter how much your customer might need or like what you’ve got, if they don’t have the budget for it, they’re not going to be able to buy your product.
Authority: Does your prospect have the authority to make decisions?
Your prospect might be an assistant or department manager, in this case, it’s important to determine if they have the authority to make decisions. If not, have them direct you to someone who typically has the authority to make decisions for the company or department.
Protip: Use account based marketing to target key decision makers in the company.
Need: Does your prospect need it?
If your prospect doesn’t really need your product, why bother chasing them down? The higher the need, the more motivated your prospect will be to buy. It’s up to you to find out how much they need a product like yours. Asking questions like: “What is your current solution?” And “Why is it not currently working for you?” will help you get a better understanding of their pain points and give you an opportunity to address them.
Timeline: How long will the cycle take?
Lastly, find out how long this sales cycle is going to take. This is important information to gather as they may not truly be in the market to make a purchase until next year. By learning this information early, you can see what you can do to move their timeline up or take note of when they are actually interested in moving forward and contact them at a later date.
The BANT method, which is still used by many organizations to gauge lead qualification, has a few flaws and is quickly becoming out-dated. The problem with BANT is that the steps are not in the right order. Typically, you would start by identifying the customer’s needs and then finding out who the decision makers are and so on.
Some other methods and acronyms of determining if a lead is worth perusing include:
ChAMP- Challenges, Authority, Money, and Prioritization.
Champ is often referred to as “the new BANT” since it is basically an updated version of BANT. While ChAMP is in the correct order, it’s still not quite going to cut it.
ANNUM - Authority, Need, Urgency, Money
ANNUM goes right to the source by identifying key decision makers first. They all work for different strategies but in reality, they’re all the same, just in a different order.
Here’s a list of the many popular acronyms that are often used to qualify a lead.
Finding qualified leads has become more complex over time and as a result, requires a more in-depth process. Acronyms just aren’t going to cut it for much longer.
Enter the Demand Unit Waterfall
The method that we use and encourage our clients to follow comes from Sirius Decisions. They have created a process, which has become the gold standard in defining key stages in the lead management process.
Target: The first stage in the waterfall is about determining the size of your target market and identifying your ideal customer or, creating a Persona. Find out what types of customers will find the most value in your solution.
Active Demand: The number of prospects that have an identifiable need for your product.
Engaged demand: Prospects that have responded to your marketing efforts.
Prioritized demand: The level of engagement has reached a level that justifies additional interactions from tele or sales resources.
Qualified Demand: Based on interactions with the prospect, the fit, and urgency of prospects needs are determined and either considered a qualified lead or as a non-qualified lead.
Pipeline: For prospects who have shown significant interest, it's time to convert them. Prospects will be entered into the pipeline.
Close: This stage signifies that the sales team has successfully closed the opportunity.
The demand waterfall is a great process to qualify leads, but who should you target in the first place? Someone who signed up for an e-book? Or Someone who emailed to ask for a demo? It could be either one.
Create a custom Lead Definition.
As you can gather from the two methods above, whichever one you choose, you need to start somewhere. It’s a good idea for marketing and sales to come together and create a shared definition of exactly who the marketing team should throw into the waterfall. After all, some people might not be interested in getting wet.
Start with a buyer persona
A buyer persona is a semi-fictional representation of your ideal customer based on research and real data such as demographics/psychographics.
Expand on demographics
The data that most marketers already have is demographics; detail such as a lead’s location, name, job title, etc. Information on the company they work for should include the companies’ current tech stack and annual revenue. In order to choose the most important factors, take a look at some of your best customers. What demographics do they fall under? Psychographic data such as their interests, pain points, and organizational goals will help to identify the needs of the company.
It’s important to recognize that the definition of a lead is different for each company. It is vital that your organization agree upon a custom definition of what qualifies someone as a lead. This will ensure all departments stay in sync and are working efficiently and toward the same goal.
If you haven't had enough, here's a great list of some commonly used marketing and business acronyms. TLDR.