A Checklist: How to Measure Lead Quality

It’s about identifying your lead sweet spot.

Remember how we approached this from the macro, meso, and micro levels? That’s the same approach we’ll need to take here. To define a quality lead, we’ll start by asking four questions.

• Who do you want as a customer?

• What are you willing to spend to attract/close them? 

• What do these customers want/expect from you?

• How urgent is their need?

These questions are intentionally broad. 

They’re designed to create an internal conversation about the kinds of criteria your MQLs and SQLs need to meet consistently. Let’s take a more in-depth look at these questions.

1. Who do you want as a customer?

Marketing should have a clear sense of the demographics, psychographics, firmographics, and ethnographics of a prospect who’s willing, able, and ready to buy. Sales should have a clear sense of the steps customers need to take to earn their place in the sales pipeline. 

Both groups should be able to identify important red flags (e.g., knowledge vampires, tire kickers, discount/price shoppers).

2. What are you willing to spend to attract/close them?

You should have a clear idea of your breakeven cost-per-lead. If your monthly marketing budget is $5,000 and you receive 100 leads, your cost-per-lead is $50. If you’re selling a product that’s $150, that’s probably pretty affordable. 

What if you’re selling a product that’s $45? 

Well, that’s obviously not going to work now, is it? Your sales and marketing teams need to know what your breakeven cost-per-lead is.

Here’s why.

Assessing lead quality is straightforward when you know your breakeven cost-per-lead. If your breakeven cost-per-lead is $50, your product retails for $60, but your customer is demanding a 50% discount, you don’t have a quality lead.

3. What do these customers want/expect from you?

Your prospects have specific expectations from you. These expectations come in five distinct categories. 

• Competency expectations: Your company should be an expert in your field, your employees should be masters of their craft, and your product knowledge should exceed expectations. You should have answers to their questions and solutions to their problems. 

• Support expectations: Everyone on your team, from your salespeople to your support team, should be available, attentive, and engaged. They should be fully invested in the customer/provider relationship and eager to assist customers with their questions, concerns, or problems. 

• Performance expectations: Your product or service should exceed their expectations. You know, the usual stuff – under-promise and over-deliver, on-time, under-budget delivery with consistent results. Your content should set a high bar that you continue to meet. 

• Fulfillment expectations: Your product or service should be delivered as promised, within the expected timeframe, and at the expected price. 

• Service expectations: When something goes wrong or your customers need help, they expect you to be ready to solve service-related problems. Maybe the service wasn’t as expected, something went wrong, or someone wasn’t performing as expected. They expect you to come running, tools in hand. 

These are the expectations customers have. 

The better you are at clarifying these expectations upfront during the sales process, the easier it will be to attract and convert new customers.

4. How urgent is their need? 

Remember the 3% rule? 

In a previous blog post, we mentioned that only 3% of your customers are ready to buy. 

This means 97% percent of your customers are not ready to buy. Here’s a quick recap of the 3% rule.

The 3% Rule shows you how to spend your sales team’s attention and time. 

Here’s a breakdown you can use to quickly assess lead quality. 

• 3% active buyers: Your sales team should spend most of their time with these prospects. These prospects are SQL; they’re interested and ready to move forward, displaying an appropriate sense of urgency. These prospects are actively engaged, so your sales team should engage with manual follow-up. 
• 7% intend to change: These prospects aren’t quite ready to begin the negotiation process. They’ve expressed their desire to make a change, but they’re still in the early stages. Your sales team should nurture these leads, sharing content that teaches them how to find the right provider (you). This means automated and semi-automated follow-up until they earn their place on the 3% list. 
• 30% have a need, not ready to act: These prospects should be sent back to marketing for nurturing. These prospects need consistent content that’s focused entirely on their needs and the problems they’re trying to solve. It’s not a time for sales pitches or offers, the primary focus should be education. 
• 60% who don’t have a need or are not interested: These prospects should be added to your do not disturb list if they show infrequent engagement or removed from your list if they’re completely disinterested. This list includes disgruntled customers, competitors, suppliers, and pundits. Follow-up with unqualified prospects who are not interested is a waste of time.   

What does this mean, then?

It means that, on average, 40% of your prospects are interested in making a purchase decision at some point. Using this response protocol, we see that most of your leads will require consistent nurturing/follow-up.