Lead Quantity vs Lead Quality: Which is more important?
For decades, companies have struggled to strike a balance between lead quality and lead quantity. While more leads on paper may look good to a marketing professional, the quality of leads is what a sales team is looking for.
According to a recent survey, 70% of B2B marketers cite improving the quality of leads as the most important objective of a lead generation strategy.
This means that marketers have started to value quality leads over generating as many leads as possible. The reason for this preference is that the chances of converting quality leads are always greater than the chances of converting any other leads that enter your funnel.
However, top marketers understand that creating harmony between these two ideas and achieving the perfect marketing mix is the key to getting better results.
You’re probably wondering how to find the right balance between lead quantity and lead quality. We’ll get to that in a minute.
But first, let’s take a closer look at what quality leads are and how they differ from driving leads in bulk.
What is Lead Quality?
A lead is classified as a quality lead if they are interested in your product or service and there is a high likelihood that they will convert into paying customers in the future.
Lead quality is a measure of the value of the leads you are generating because high-quality leads are more likely to convert into sales.
On the other hand, lower quality leads are either not interested in your offering, or worse, not likely to pay and use your product any time.
High-quality leads usually have a good product fit which boosts brand loyalty and customer retention. They are simpler to nurture for your sales and customer acquisition teams—but they are typically more costly to obtain for your marketing team.
But how do you know which leads are most likely to become customers? And how can you improve the effectiveness of your lead generation campaigns? Well, there is a concept known as lead scoring.
What is Lead Scoring?
Lead scoring is a technique for determining a lead’s sales-readiness. First, you select which criteria or relevant data indicate a sales-qualified lead and then assign scores to each of those criteria, yielding a final score for each lead.
When it comes to lead scoring, it’s more than just a marketing strategy. It has the potential to improve the overall efficiency of your company as well as the coordination of your various teams.
Most companies rate leads by allocating points, using A, B, C, or D rankings, or using phrases like ‘hot, warm, or cold.’ The main idea is that by focusing on the clarity of a sales-ready lead, marketing and sales can improve their performance and productivity.
Every business has its own method for determining sales-readiness, but one of the most popular is to develop the value system using data from how leads interact with your company.
Examples include:
- Email opens
- Web page visits
- Form submissions
- Content download
- Free trial requests
- Email subscriptions
- Webinar registration
- Social media engagements
So, gathering more B2B data is the key to developing a more unique customer profile for your company. Based on how well you understand your prospective customer’s profiles, you can customize and eventually approach them with personalized content.
Now that we are in the middle of the subject of “is the quality better for lead generation or quantity?”. Let’s compare both from the standpoint of ROI.
Lead Quality and ROI
Businesses aim to increase ROI by optimizing a specific activity, such as blogging. When you focus on the quality of your leads, your chances of converting a lead into a paying customer skyrocket. This is self-explanatory.
Seeing as quality leads are all about targeting prospects who are more likely to become customers, focusing on them increases the chances of a higher ROI.
When you focus on high-quality leads, you help to nurture relationships and increase customer loyalty. This, in turn, helps to increase the customer’s lifetime value.
Furthermore, focusing on lead quality rather than lead quantity shifts your overall marketing expenses to only a few specific leads. You will sacrifice the number of leads you receive in this process in order to target much more targeted and well-defined prospects. Specific lead targeting will result in smaller lead pools.
Despite their smaller size, they will be highly targeted, which means your resources will be spent more efficiently, resulting in a higher ROI.
Lead Quantity and ROI
We’ve discussed what quality leads are and how they help to increase ROI. But how can we get quality leads if we don’t generate enough leads to begin with? This is where things start to get interesting.
As simple as a numbers game, the more opportunities you have to play, the better your chances of winning. This also applies to your B2B lead generation strategy.
When a company is in its early stages, the marketing team should prioritize brand awareness over lead quality. It is difficult for a company to gain enough brand awareness and online presence at this stage, especially for low-cost products or businesses with limited marketing and sales budgets.
Focusing on lead quantity will be a more viable option for you if you have a limited budget or are in the early stages of your business’s growth. In short, if you’re having trouble getting enough leads in the first place, it’s better to prioritize quantity over quality.
How Do You Strike the Perfect Balance Between Them?
When planning your marketing initiatives, should you cast a wide net for a large number of leads or a narrow net for highly qualified leads? The answers differ depending on your company’s stage, the size and complexity of your target market, your price point, and the nature of your product.
As with all balancing acts, there is no quick fix or magic wand for achieving both quality and quantity. However, certain tactics can assist marketers in achieving adequate quality at scale by bridging quantity and quality. So, let’s look at 3 ways you can balance out the two.
- Set Your Goals and Objectives
Setting goals and objectives is one of the most important steps you can take to gain a thorough understanding of both teams. When setting expectations, make sure to focus on a fact-based outcome rather than theoretical constructs.
Marketing departments are responsible for supplying a predefined number of “qualified” leads, while sales teams are responsible for following up with these leads within a specified time frame. And this can be accomplished effectively with the assistance of an SLA.
Marketing prospects must be closed by a sales representative in order to become buyers. Unfortunately, there is sometimes a lack of coordination among those teams as to who is in charge of what. A marketing-sales service-level agreement (SLA) provides a shared set of objectives centered on each team’s responsibilities.
SLAs are measurable targets that reflect marketing and sales goals. The clarity provided by an SLA will result in a more simplified marketing and sales funnel. SLAs, on the other hand, must be created collaboratively by both teams and maintained collaboratively by both teams over time to be effective.
- Hand Over the Responsibility to an Expert
To achieve the right mix of lead quantity and quality, sales and marketing teams must collaborate. The ability to integrate both departments can either help or hurt your strategy. To deal with this situation, having an expert who is capable of handling both responsibilities is critical for striking a proper balance.
This managerial position requires someone who understands how to manage the goals of both teams. They should be able to find solutions and bring the two teams together harmoniously. Any lead generation efforts will be more data-driven as a result, benefiting the company as a whole.
- Target the Right People
When attempting to strike a balance, keep in mind the lead definitions that both teams agree on. Determining your ideal client persona, or, to put it another way, targeting the right people, is critical for effective lead scoring for lead generation.
An Ideal Customer Profile is a representation of a prospective customer with characteristics that indicate that the value you provide through various services will significantly benefit their business.
Simply put, this customer is very likely to buy from you. Offering services to such a clientele is mutually beneficial because they may take advantage of your offerings, thereby increasing your bottom line. This contributes to your company’s steady growth while reducing resource waste for all parties involved.
Conclusion
If the quantity or quality of leads you generate is insufficient, your business is likely to fail. There should be a close relationship between the two. You must strike a balance that is unique to your company.
There is always room for improvement, so don’t stop experimenting, executing, assessing, and updating your lead-generation strategies to improve their effectiveness and ROI.
Furthermore, in order to effectively drive your business, your lead generation strategy must always prioritize both quality and quantity.