Which would you rather pass along to your sales team: a large number of leads of varying levels of quality, or a select handful of high-quality leads?
At first glance, a large number of leads might seem more valuable than a mere handful. More leads mean more opportunities to make sales, right?
In reality, it’s not quite that simple. Experienced marketers know that the quality of a lead is the most important thing when it comes to increasing sales growth rates—far more important than the number of leads generated by your marketing efforts. In this case, less truly is more.
In this blog, we’ll explain how the quality of your leads positively impacts your sales pipeline value, and how this knowledge can help you increase your company’s sales growth rate.
Sales Pipeline Value—Quality is More Important than Quantity
Your sales pipeline value is the single most important thing impacting sales growth. Increasing your pipeline value is guaranteed to increase your sales growth rates.
But how, exactly, can a company increase the value of its sales pipeline? The answer is to increase the quality of leads in its pipeline.
Hubspot defines sales pipeline value as “The total value of every qualified opportunity in your pipeline.” As you can see, this definition excludes unqualified leads entirely. The focus is entirely on qualified, high-quality leads who are likely to convert into sales.
To illustrate this idea, let’s refer back to the two scenarios we introduced above. What is the value of your sales pipeline in these two instances?
Scenario 1: Your company has a large number of leads of various quality levels in its sales pipeline.
- With such a large number of leads, chances are that your pipeline is clogged with low-quality leads that are unlikely to convert into sales.
- This results in a low-value sales pipeline. Deals are unlikely to close as your salespeople waste time on leads that only result in dead ends.
Scenario 2: Your company has a smaller number of high-quality leads in its sales pipeline.
- These leads are genuinely interested in purchasing your product, which means that they are more likely to speak with your sales team and eventually purchase your product.
- The result is a high-value sales pipeline. Without low-quality leads sapping your sales team’s time, your salespeople can focus on the handful of high-quality leads that are likely to convert into sales, which will increase your sales growth rate.
As these scenarios demonstrate, the key to increasing the value of your sales pipeline is to find leads that will actually convert into sales. The rest—all of the low-quality leads that are unlikely to talk to sales—will end up wasting your sales team’s limited time.
But how can you separate the high-quality leads from the rest? What are the signs of a high-quality lead? And how can you ensure that you generate high-quality leads through your marketing efforts?
What We Mean By “High-Quality Leads”
Let’s define what we mean when we talk about lead quality.
The hallmark of a low-quality lead is a lack of interest in talking to sales. Your lead generation efforts might capture low-quality leads for a variety of reasons—perhaps the lead was simply researching your product or industry with no intention to buy. Maybe they simply don’t have the budget to purchase at this time. Whatever the specific reason, these leads are unlikely to make a purchase, no matter how effective your sales team is.
So, what defines a high-quality lead, then? A high-quality lead is highly motivated and well-informed and is therefore ready to act sooner rather than later. High-quality leads have the organizational power and influence to find the budget to make a purchase. Both the motivation and the power to act must be present at the same time.
With these key characteristics, high-quality leads will be responsive to your sales team’s efforts. They are more likely to purchase faster, at a higher rate, and larger average deal size, all of which ultimately increases your sales growth rate.
How can marketers reach these leads? Through well-researched and engaging content that addresses your prospects’ specific pain points, you can attract the high-quality leads your company needs to maximize its sales growth rate.
For more information on how lead quality impacts sales growth rates, and how to generate them, download this white paper.