If sales and marketing are to work better together, it might help to have an agreed-upon formal definition of what a qualified lead is. And yet only half of the firms responding to CSO Insights’ 2014 Sales Performance Optimization Study, underwritten by Velocify [download page], say that that’s the case – and that percentage hasn’t shifted much in the past 3 years. Not surprisingly, the study finds that those with a formal definition tend to enjoy higher lead conversion rates.
Among those with a formally agreed-upon definition of what constitutes a qualified lead, some 29.8% claim a lead conversion rate (leads converted to opportunities) of more than 75%. By contrast, only 18.2% of firms that lack a qualified definition at all boast conversion rates at that level, as do 20.8% of firms with an informal definition.
Notably, when asked the distribution of total leads by source, respondents to the survey indicated that almost half (46.9%) of leads are self-generated by sales representatives. While marketing generated the next-highest share, respondents said only about one-quarter of total leads come from the marketing team. And when sales executives participating in the study were asked to grade marketing’s performance, only one-third gave marketing a “passing grade” on lead quality, with even fewer (27.8%) giving that grade for lead quantity.
Here are some other insights from the study:
- Some 13.4% of firms are leveraging sales analytics and big data services, most commonly to generate more and/or better leads (50.8%);
- On average, 23.9% of respondents said that more than three-quarters of their leads result in an initial customer discussion;
- Roughly half reported lead conversion rates below 50%, with that figure up from 43.3% in last year’s study;
- Firms who believe their marketplace training program exceeds expectations are more likely than those whose training needs improvement to experience higher lead conversion rates;
- Fewer than 1 in 10 firms said that sales exceeds expectations in its ability to prioritize accounts to focus selling efforts;
- More firms believe their sales teams exceed expectations in developing sales strategy plans for key accounts (12.1%), but fewer feel that way about their ability to identify trigger events that indicate a likelihood to buy (5.7%);
- When it comes to processes for lead nurturing and incubation, those companies where sales and marketing have blended ownership report better conversion rates.
About the Data: The data is based on the responses of more than 1,200 firms worldwide.