IN OUR HEADS
April 20, 2023
A common mistake that marketers make is to throw a wide net, hoping to catch any available lead and haul them in. Sure, some might turn into prospects or clients. However, studies show that this “quantity” approach tends to yield a harvest of poor leads and wastes valuable marketing resources.
"More is better" is a myth — an unfounded one at that — and needs to be put to pasture. Instead, marketers would be wise to learn about the positive impacts when you learn how to improve lead quality and actively pursue those leads.
Quality Leads vs. Quantity Leads: What’s the Big Deal?
Lower-quality leads convert fewer sales, create higher overhead costs, and also cause inefficiencies of scale. Hyper-focused quality leads can counteract these issues. So how does an agency learn how to measure lead quality?
Seventy percent of entrepreneurs and management leaders prefer to abide by a simple, golden rule: When it comes to lead generation best practices, targeting more qualified leads and in fewer numbers is the ideal approach. More often than not, sales teams then enjoy more success with less effort. A focus on quality leads can also improve your ROI over time.
Spotting a quality lead doesn’t have to be rocket science, either. You can use a method called lead scoring. This system ranks potential prospects according to the value that they might bring to your business. It can even analyze what type of engagement would be the most successful for each lead.
So while some large companies manage to work with quantity by relying on deep pockets and far-reaching brand campaigns, this approach isn’t feasible for most entrepreneurs or small business leaders. In fact, increasing the volume of poor-quality leads can erode resources and profits when leads never turn into sales. Some businesses also make the mistake of processing thousands of random “lower cost per lead” prospects, but this usually creates an unproductive funnel.
Time Is Precious in Sales: How Quantity Wastes This Resource
Both lead acquisition cost and profit are tied to one valuable resource, and that is time. In order to develop a successful strategy, you must evaluate lead channels and also lead source performance — not just for their ability to produce clients but also for how they can save your sales team time and expenses.
Successful funnels are hyper-targeted at certain demographics. You design a message just for them and they respond by inquiring about your product or service. This saves time and funds. But when a company increases volume, such hooks are either lacking or don’t speak personally to a lead. Your sales team then has to spend more time and financial resources to identify and convert leads. Unsurprisingly, conversion rates start to deteriorate.
For this reason, relying on low-quality leads in recruiting efforts isn’t an ideal strategy. The best strategies to identify quality leads that drive desired outcomes start with measuring performance. The primary KPI of lead performance is the conversion rate. Analyze the differences in conversion rates across all acquisition sources and channels.
From there, identify the sources and channels that produce the biggest percentage of conversions. Calculate the average cost and time to convert these leads, and optimize scaling by using KPIs to determine where to scale different types of leads and where to pull them back to balance.
Whether you teach your sales team how to generate quality leads with digital marketing or you go the more traditional route, it’s important to know when to scale good leads and when to cut down on lower-quality options.
A good way to understand why some marketers still cling to volume is to compare lead acquisition with something that happened in the late 1800s. During this time, Harmon S. Palmer invented the first hollow brick. Before then, bricks were solid and cumbersome to handle. Palmer’s bricks used less material and made construction more efficient.
Similarly, marketers often believe that volume equals more sales. But this method is a “solid brick” that causes nothing but extra work and expenses. On the other hand, just like the hollow brick, scaling your leads to fewer quality prospects allows your salespeople to work faster and convert leads into customers more efficiently.
