Like you, we have learned the hard way that poor quality leads, even if they came free, will cost a lot of money and time to follow through – at times only to end up with no purchase.
Ultimately, all you may want is revenue and not leads. Which is why many businesses only track revenue. To obtain the desired revenue, you have to take your leads through a process until they are closed, won, or lost – a process that has more costs to factor in than just input cost of leads.
Today, we deep-dive into one of the most significant lead classifications in your process that your business can acquire: marketing qualified leads.
What is a Marketing Qualified Lead?
Marketing qualified leads (MQLs) are different than a simple lead and a sales qualified lead.
Marketing qualified leads are typically a prospect that has expressed some interest in your company by engaging with its content and provided identification details to convert into a known lead. These leads are qualified by predetermined standards of a “good fit” target and judged more likely to become a customer.
Said differently, a marketing qualified lead is someone who is exposed to your brand through your marketing assets.
Marketing Qualified Leads have to be known. An unidentified website visitor isn’t a marketing lead.
You can identify MQLs by offering ebooks, whitepapers, checklists, guides, case studies, online calculators, etc. as a downloadable piece of content that is provided in exchange for a website visitor’s email address. With the information collected, you’re able to identify a marketing qualified lead.
A simple lead is when a prospect first appears on your radar. You know who they are but you don’t know much about them. This can be in the form of a name and email address. You have limited descriptive data.
Simple leads are often labeled informational lead, as they are often in the early stages of the buyer’s journey and, most of the time, will require nurturing and more content from your marketing team to be converted to a marketing qualified lead.
Not all MQLs will be a good fit for your product or service, and your sales team and efforts shouldn’t waste time on them. These leads haven’t shown the propensity to buy.
Examples criteria for Marketing Qualified Leads.
- a certain revenue range
- a certain number of employees
- a certain vertical
- Fit within certain income levels
- biggest challenge
Knowing who these potential buyers are will make prioritizing leads a whole lot easier and the sales team happier. It’s commonplace that sales and marketing executives don’t always see eye to eye. Make sure both teams contribute to the criteria being followed.
Now that we know what MQL is and understand its importance, let’s break down the types of investment and the ways to track return.
Metrics are always a good place to begin.
Calculating ROI. It’s Not as Scary as You Think.
Tracking the ROI of a Marketing Qualified Lead
1. Have a specific lead goal.
A specific goal has a higher probability of being achieved than a general goal.
It is remarkable how many businesses out there don’t have a specific lead goal. Most people talk about sales or customer goals but lack insight into their sales funnel to set an expectation of leads to achieve sales goals.
Using a specific lead goal that is based on larger business goals enables you to create a “total lead target” goal for the marketing team or inbound marketing agency. Now, marketing will have the tactical flexibility it needs to generate a mix of leads if they can’t deliver all high-quality leads all the time.
A simple example: Say, you want to achieve $10 million in incremental revenues in 2016, and your average deal is $50,000, which means you need to close 400 new deals. With an average close rate of 25%, you will need to have about 1,600 opportunities or Sales Qualified Leads (SQLs). Additionally, 20% of all of your Marketing Qualified Leads convert into SQL. Ultimately, you will need to produce 8,000 MQLs.
What are you doing or investing in to acquire your marketing qualified leads?
If you have a marketing team, in-house employment costs, technology, and infrastructure must be accounted for.
2. Monitor Traffic Per Month
Most website visitors aren’t inclined to buy when they first see your website. Nevertheless, you need to fill your funnel so you can convert visitors to leads and move them down your conversion funnel.
- Website traffic is an indicator of your lead potential. It’s difficult to generate marketing leads without getting the people first.
- Web traffic increases
- Increase in page views
- Decrease in bounce rates
- Tweets or Facebook shares
- Search engine rankings
With this metric in hand, you can now calculate the amount of web traffic needed to create your marketing qualified leads.
3. Monitor Leads Per Business Day Month Over Month
I’m sure you track month over month lead growth, but are you doing it fairly?
What do I mean by fairly?
Not every month is the same length. To adjust for accuracy, drill down the lead production by a business day.
For example, if you’re generating 1000 leads in January, and you want to maintain this level of lead generation in February, what will you need to do? To maintain 300 leads will require a 15% growth in average leads per business day. Said differently, you must achieve the same results in 3 fewer days.
Also, make sure you are monitoring lead numbers by stage, giving you a way to identify poor sales performance before it’s too late in the month. This awareness increases your chances of hitting revenue targets.
- Lead (Simple Lead)
4 . Customers from Marketing Per Month
(marketing only, not customers acquired from sales development reps)
I’m sure you track customers acquired. However, are you tracking how many customers came from your marketing team’s efforts?
Marketing Oriented Customer percentage is a ratio showing what new business came from marketing.
To calculate it, simply take the new customers from a given period and parse out the percentage of them that began as a lead generated by your marketing team.
Benchmarks: A company with an external sales team and internal sales support should look for 20–40%, whereas a company that has an inside sales team and a lead-focused marketing team should be between 40% and 80%.
Platforms like HubSpot make it incredibly easy to visualize and monitor performance. If you’re not using a platform, you can still keep track using Excel.
5. Marketing Qualified Lead by Persona
Most successful inbound campaigns are measured by the number and quality of leads generated.
However, if we strategically develop extensive personas and map out a buyer’s journey with our business, we must keep track of whether or not the MQL fits your target audience or persona.
The data collected by this metric will dictate your lead generation and content strategy moving forward. If there’s a target or persona that isn’t producing, create more content and offers for that persona at each stage of the buyer’s journey.
6. Lead-to-Customer Conversion
If you don’t, you’ll dramatically decrease the probability of return on your middle metrics, MQLS.
However, now that you’re successful managing the other areas listed above, you need to measure the lead-to-customer conversion rate.
Typically, this ranges from 2% to 5%.
Monitoring these numbers weekly will ensure you’re evaluating the quality of your leads.
When you combine lead-to-customer conversion with visitors-to-lead conversion, you get gold. If you’re converting traffic to leads but aren’t converting leads into customers, it could mean you aren’t attracting the right prospects.
In this article, we discussed what your company should track continually and relentlessly.
Determining the return on invest of Marketing Qualified Leads means we need to track many different data points to get a clear picture of what’s working and what’s not. You cannot lose sight of what’s most important.
By following the 6 keys to track the ROI of Marketing Qualified Leads, you’ll be able to convey performance in a way that C-suites can get excited about.