069. Prospecting vs. Qualification in Lead Management

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Good morning. Welcome to another episode of Demand Gen Studio. Emilio, how are you doing this morning?

I'm doing great. Mariana, how are you?

Good. Glad to be sitting down and talking through another topic with you.

Yes, I think this one, I always say that, but this one is interesting as all the others, I guess. What?

Well, today we're going to be talking about lead management and talking about prospecting versus qualification in the lead management process. So we'll dive into the two components of the process and why, explaining why those two components require distinct processes and teams and metrics and KPIs to track for each step in the lead management process, so we can go ahead and dive in. So to start, do you want to kind of walk us through the lead management process and the difference between say, the lead management process versus the deal management process?

Yeah, and I want to, as always, step back and kind of like answer to those listening at the beginning of this episode. Why? Why should I listen to this? Right? What is the. What is the purpose? I've seen some trends. Maybe it's just the work that we do that we for the longest time as focused as an agency on inbound efforts. They might be organic, there might be paid. This something that some people find confusing, right? If they, they will bucket paid media into outbound, I don't think it is because while you are paying for access, you are not interrupting someone or you know, getting in front of them except for banners that pop up unsolicited on your browser. But if someone search for something or is just scrolling their feed and they see an ad, for me, that action is still inbound because the user, the human, has to act. So either paid or organic, we as an agency and therefore a lot of our own clients have done a ton of inbound efforts. And I believe that because of big trends, inbound is not working the way used to anymore on both paid and organic. I think it has started to get saturated with unqualified leads that are coming from, you know, synthetic interactions from, you know, like not through visits, not through clicks, not true form fillers. And at the same time the cost and the systems and the technology required to outreach digitally have dropped significantly. It used to be hard to get a list of prospects in your icp. It used to be hard to automate how do you reach out to prospects, you know, connect with systems and email and all those things. And it has become less expensive and it has become more popular. So I see more and more companies exploring both ideas at the same time. It used to be that either you were a 100% inbound kind of company person and you will just wait and see and you will have a ton of organic efforts and content distribution or it used to be that you were, you know, a true believer of just outreach, but your outreach was phone calls or just knocking the door, those kind of efforts. But now I see more and more companies trying to do the two of them at the same time and is creating some confusion, I will say. So that's the reason I think this will be a great topic, right? It's because now I think it's really, really important as an organization, as a decision maker that you understand how do you do, how do you measure what are the expectations of when you are qualifying inbound leads versus when you are prospecting the right accounts, even if they don't have intent. So that's kind of like the, the, you know, setup. I don't know if you, you've seen that Miranda as well in the, in some of the clients that we work with.

Yeah, definitely. And it is like you, you start to see distinct difference in, I mean, we'll dive into it talking, talk about it more. But it's noticeable the actions that you're taking for each one of it making more sense for the marketing team to take point on, you know, one side of the process versus the sales team.

For sure. Yes. And so again, trying to give a framework for this. One big hurdle on this process of qualification versus prospecting is how do you define the word lead and qualify lead? What does it mean? And how do you move from a regular lead or a non qualified lead to a qualified one? It is the reason why these two processes that are going against each other or in different directions get confused. So I will start there. So most people will consider a lead. Sometimes they call it a prospect, a known contact or company. B2B will be mostly an account that might be of business interest and the qualification process. There are many, many methodologies, but the one that has to stick for the longest is known as band, which is budget, authority, need and time or timing. There are more, you know, I think better ones, but at least everyone feels intuitively that they understand that for a lead to be qualified to, to have a business opportunity, you have to have an idea of how much it costs. Whatever you are trying to buy, ideally you have already budgeted for it, right? You have set aside some money that the person that you're dealing with has either access or is someone that can make the decision. Right. Rather than just someone that is trying to understand the Offer only obviously that there's a need that your company can fulfill. That's the need is the trickiest one because you can have leads that need something that they need help, but for whatever reason, your company can't or won't take care of their need and they will have to find someone else that can. But need summarizes those two ideas that do you really need help? And can I provide it? And lastly, one important one is timing, right? Sometimes you have all the elements, but it's not urgent. There's no meaningful trigger to take action today, right? Your typical pain that you know you need to solve, you have the resources, but it's not big enough, large enough that will compel you to take action. So you can use other methodologies. But the idea is that ban is a good guideline to understand if someone is a qualified lead. The challenge is this, is that the way that you break down those four characteristics, you do it in the form of a quadrant. And I was going to do a little like diagram of it, but hopefully for listeners it's quite simple. Right? So you have the X and the Y, right? And a ton of the characteristics you can put on the X which is intent. And the other set of characteristics you will put on the Y which is fit. Right? So for example, intent has to do a ton with I need it, I need it now, right? I think those are the biggest ones that the lead needs help or the company needs help and, and the timing is important. I need it now. And to some degree I have some money to deal with it. Because if you want to do something but you don't have the budget, your intent is not true, right? You really don't have the resources to pull it off. But on the other quadrant is all these other things as well. You need help, but can I help? Right? Is your need something that I can fulfill? Are you the right size of companies that you help? Is your budget large enough or in the configuration that we need to help you out? Right. Sometimes you might have the budget, but your conditions are not the ones that we want or need or can attend. So Fed has everything to do with matching the the client or prospect requirements to what your company can do. And so in that matrix you have people that obviously falls in any of the four possible combinations. Ideally you have someone that is a right fit and has intent. And those are the ones that typically you will call qualified leads. You will have people that have intent, they want help, they want, want it now, but you won't or can't help so you have great intent, you don't have great fit. Obviously you have people that are the great. You know, the right fit is the type of company that you want to work with, but for some reason, they don't want to take action today. And finally, the combination that nobody wants, right? Not the great fit, not intent. You don't even care about them. You don't know them. So our go to market motions, where we do outreach or where we wait for someone to come in will be strong in one of those two facets, right? So typically, people that come to you will have great intent, but you will have to determine if they are a great fit for the organization. And then therefore, you have to qualify them. You have to ask them questions, learn more about their business to really understand if that intent is real, one, first thing. And second, if. If they have intent, if they're the right fit for you. And on the other side, when you do outreach efforts, when you do outbound, when you prospect, right, you won't start on a list that is not a great fit. That's a given, right? Why would you invest resources on someone that is not a great fit for the company? So usually fit is given, but obviously you don't know if they have intent because if they had, they might have already reached out to you. And I'm assuming that that's the reason you start the effort. So I'll make a pause there and kind of like ask you if you have encountered that challenge on some of the things that we've done or out there where that might create confusion.

Yeah, yeah, definitely the. Yeah, it's like the distinction with the outbound versus inbound effort. And if, especially if the marketing team is, you know, performing some of those outbound efforts, one of the like, key components is synergy between the two teams of really fully understanding and being on the same page with one of one another of what are we looking for? Like, what is. What is our definition of a good lead? You know, being able to start from a basis of the two teams being really aligned. Because if you think about it, with the outbound effort, the marketing team is performing the first step of the process for the sales team. So the how well that they do that is going to affect how well the sales team can perform the end of the process. And while we're measuring different KPIs for each step, they affect one another. And so it can cause increases, you know, the two teams to have friction and start butting heads or really form like a, a good, you know, good bond and you can actually be like helping each other improve in your specific areas.

Yes. And so I, I hopefully everyone feels like at this point it's okay. It's clear to me that out there, there's in my ideal client profile, in my addressable market, there's a group of companies that all of them are a great fit and some of them will have intent and I have two possible motions to discover them, right? Either some of them reach out and I qualify them or some of them are a great fit and I go and ask them if they're interested in having some business with us and we will discover together they are on offer. So from a company perspective is easy enough. You have two axes and you want to have great alignment with the two of them. However, when you go inside, that's when trouble start. Because typically the, the, the group of people, their metrics, their tools to qualify versus prospect have always been different in many levels. So I will start with the obvious one. It doesn't have to be this way, but it has been for a long time that typically the team that is in charge of increasing the amount of inbound increase is marketing, right? So marketing efforts are geared toward presenting the brand, talking about who you are, what do you do, how you're different. Why can we trust you with the expectation that the right fit clients reach out to the company through their traditional and digital channels and inquiry about the business. So that's been traditional in the marketing role. So the challenge of course is that when marketing craft these messages and distribute them across digital and traditional channels, there's no guarantee that only right fit people or accounts will listen, right? A lot of people that will not be a great fit for the company will listen, they will misinterpret the message, they will misunderstand or they will like to know more, but they will not be ready. Right? So they want to learn more, but they don't have intent at this moment, they don't have the budget. So and on top of that complexity, nowadays more and more of those engagements are synthetic, right? There's really not human visitors in some websites sometimes form being fields, phone calls being drafted. So all of us are dealing with the equivalent of individual spam in our inboxes, phone calls, forms, any channel that you open, you have that percentage that is going growing of non human inquirers. So therefore because that's been a metric of marketing, they have been tasked with the qualification process and we have created this fairly known process of saying, well you marketing, bring all those leads and you are in charge of determining if they're qualified. And so if marketing says they are qualified, they will become marketing qualified leads. But, but sales don't won't buy it. They'll say, well, I don't know, I need to approve them too. So I will have a conversation with them of sorts and if I agree with the definition or with the qualification and criteria, then I will consider them qualified. And that's your sales qualified lead. And technically there you are free to open a true business opportunity. Is that well documented process, right? And it has some opportunities. But in theory, the way that you measure all this, this is the tricky part, is that you count the number of inquiries, define a number of leads. Obviously, marketing typically is measured by the number of marketing qualified leads that they send over to sales. And sales will typically challenge that number with their own sales qualifying number. That's one process there. And so for business leaders listening right now, that's typically how you will handle your qualification process. Is the result typically of some marketing effort. It doesn't have to be. Sometimes it's just natural, right? It's referrals. You just happen to have a website and people is asking for your service and you need to set up within your marketing team at least one person or a fraction of a person that is in charge of catching all those inquiries in all those channels that you have open and qualify the leads so you can send them over to a salesperson. That's one flow. Now prospecting, again, typically in the past used to be done mostly by sales, right? So a salesperson is either crafting quotes and having conversations with qualified buyers, but when they don't have any, they will prospect, right? They will start reaching out one by one, asking, you know, are you interested in my business? And it used to be that the channels that they will use were very different from the channels that digital marketing would use. That's why I'm kind of like matching this conversation here is it's not that marketing and sales has for the longest time be using different channels. It's just that at least in the last 20 years, marketing is starting to rely on digital channels. And sales didn't start it at the same time. It wasn't as quick or at least not as excited about these areas in most companies. So the sales teams typically will use more traditional channels, but not anymore. Now they do those efforts on the same digital channels that marketing uses, right? Email, LinkedIn or social media networks. So in this case, sales uses a very different approach. You say, well, let me identify the accounts that I Want to reach out to the ones that I have been assigned or where the accounts that, you know, represent my quota for, for the quarter or the month industry had been assigned, the geography. And then I will use a tool or my own knowledge from my craft to get contact information about those companies and those buyers. Right. So as you know, we typically will do something like Apollo, Clearbit or any of the innumerable amount of tools that you can get for contact identification. And then you start your process of reaching out. This is not used to be, not massive. It used to be very manual and now it has been automated in a very incredible way with tools like sequences or things like outreach or sell off. But the, the, but the, but the general idea is I have fit and I inquiry about your intent and, and if I spark some interest, then I have a conversation to truly qualify it. Again, but this is done by the salesperson. And then I discover you have a business opportunity. And so it's a very completely different process and it should be measured very differently because here nobody's knocking the door. So you are measuring how fast are we identifying accounts, how many messages or touch points do we have per account or per buyer person, how long does it take, how many meetings are we scheduling and therefore at the end of the day, obviously how many opportunities. Right. Where, where things get complicated sometime is that nowadays marketing and sales are starting to share a common place to do these activities, which is the CRM, right. The, the past was that marketing will have their website forms and their, you know, social media accounts and the leads will reside there. And it will be very easy to say, well, these are inbound source and sales will have that information on their email inboxes and on their Outlook client. And the same. Right. They will count their own leads as sales, you know, or outbound source. But nowadays that's not the case. Nowadays what happens is that probably you are putting all that information, the ones from inbound leads and the ones from outbound efforts in one place. And you can or shouldn't use the contact object, right? The, the, the record that represent the person as the thing that you use to count the outreach. This is, this is, I think the, what I'm trying to go with this point that what will people do in the past is that typically the person that will reach out to you will not be outreach and vice versa. So it was very, it's very, it was very okay to say, you know, if I have this person on my database is not being worked at the same time by marketing and by sales. That is not the case anymore. Right. Marketing will also source contacts to know who they need to advertise to, to start sending massive emails or to start, you know, they will get data from trade shows, from all these other sources to start sending gifts and other efforts that you can do in B2B. And, and those same contexts can be being reached out right now by the sales team. Right. So the important thing is that you use another entity to measure those efforts, to count them. Right. So in this case, as we, you have seen, Miranda, with our clients, we are starting to recommend to use a specific object on a CRM tool known as hopspot, which is called the lead object, which can be a little bit confusing because it's also the stage of some of the contacts. But obviously it's not the, it's not the only tool that you can use for that. As long as you have these concepts separated that when you, when you have a contact that reach out to you, it doesn't matter if you have it on the database before or not. And you start the process of qualifying it to discover if it's a business opportunity, you need to stamp that action with a lead object or a lead event, if you want to call it that way. Right. The only difference being that if they reach out to you, your process is trying to find fit, therefore you are qualifying. And if you are the one reaching out, then you are qualifying intent or you are evaluating intent. And typically you will call that prospecting. Right. And your measurements should be different. Right. When you are evaluating inbound leads, you are very interest on. Yes. Sheer volume, right. How many of them I getting? Yes. How, how much does it cost to get one? But also truly important is the quality of those inbound leads. How many of them do I need to get to get one qualified lead and how long does it take to know? Right. Because that's the other thing. Sometimes you get leads that never answer after they reach out and you know some others right away, you know if they're qualified or not. So the volume, the cost of them and the quality of them is relevant per channel that you have efforts. And when you flip it to outreach is completely different. Right. There you are more interest on your own efforts to identify them. Right. The steps or touches that you set up, the efficiency of that process. Right. If I'm sending seven emails or having a combination of emails and conversations after all those efforts, how many meetings am I getting? Right. Where you are identifying some intent. And finally, obviously you are not in the business of getting meetings at the end of the day, you want to know if you're getting business opportunities and I want to close with that. Right? What connect them both, right. At the end of the day, where your inbound efforts or your marketing activities complement and elevate your outreach efforts is that when you're doing them both, your last metric, the one that they share is the number of qualified opportunities in your pipeline. Right. And that's, that's the part that is relevant and therefore the answer to the question is one better than the other is, well, there's not such a thing. Right. It's you are in you, you at the end of the day want to do efforts to increase the number of qualified opportunities. And if inbound is working for you and Albon is also doing it, you can and should do both. Right? I don't know if you have a comment there on, on that one.

Yeah, it's also having those two separated and like clear, distinct in your mind of that like inbound versus outbound effort. It helps, I feel like it would help businesses to be able to identify where the areas where they can grow are as well or if one starts getting overloaded of there's more opportunity in the inbound effort versus the outbound effort to grow the team in those specific areas.

Yes. One last, one last idea that I want to throw out there is how do you impact for those two efforts, efficiency and efficacy. Right. How do you make them more effective? So a lot of companies are very aware of the efficiency part, right. Is what is the most cost effective way of reaching out a ton of people? Well, maybe I should write a blog because I get a ton of visits or I should pick display or video because I get a very inexpensive cost per view or cost per click. And if you go on the prospecting part, you might say something like, you know, I'm going to use this tool that cost, you know, a cent of a dollar to get a contact or this order tool that can send 1,000 emails per day. And so my, my touch point is very, very inexpensive. So I'm not going to, I'm not going to dive a ton into the efficiency part. I think is very evident. The, the part that is very hard to see is the how do you increase the effectiveness? Because the lever there is a trade off. So on the, on the qualifying part, on the inbound leads, the thing that makes it more effective is that you narrow down the potential, the potential viewers, the, the audience itself. Right. So if you forget focus on for whatever means possible. Right. And that's the part that Changes all the time. How can I get better audiences that are probably a right fit so I can have a higher impact on my message? Right. So getting better, identifying the right audience on all the different networks that you have access to digitally, it's the key, right? The topics that you talked about when you write content or when you talk about content or do video, the networks that you select and the places that you spend time on. Right. The groups, the topics, that selection increases efficiency tremendously because it goes, it comes back to you in the form or more qualified requests. Right. The phone calls that you get are better. The forms that you get are better. So the way that you increase efficiency there is that you pay attention a ton of to your initial audience and then obviously deliver a great message. On the flip side, on prospecting, the secret sauce, which again is a moving target, is finding better ways to measure intent. Right. So unfortunately for most B2B business, most of your target market is not in market, right. We, we talked about this very frequently is at most 5% of your target market is going to make a purchase decision this year. So when you reach out to a thousand companies, probably a very small fraction of them will, will engage with you because the rest don't have any business opportunity or business for you. So getting better at understanding those triggers and examples are. Yes, you have a list, but a handful of them have visited your website in the past. Right. It's not necessarily a guarantee that they have commercial intent, but it's better that if they have never visited. Right. If they are visiting some directories or some places where, you know, there's commercial intent. Right. I, I heard someone say, saying the other day, what if you, what if you target participants at a trade show or an event that is related to your industry? And I have seen that happen. Right. When I go to inbound for, you know, this HubSpot event, there's a ton of marketing tools that advertise around the event because they know the crowd. There are, you know, marketing automation buyers. So you have a higher chance of getting people with intent on a very small place rather than putting billboards everywhere. Right. So you, you, you can use the same idea when you are prospecting. Yes. You are very certain of the fit. How can you increase the chances of having a better intent or having intent? And then the other side on the, on the inbound side is exactly the opposite. Yes. You will get intent out of your offers. How do you increase the chances that you get better fit? And that will give you a higher efficiency on that process, even if it's not, sorry, we'll give you a higher efficacy even if it's not as efficient. Right. Because you can definitely put a ton of effort on getting a ton of traffic and a ton of inquiries of people that you will, you know, waste your time on. And on the other side and prospecting, definitely you can put a ton of resources and a ton of touches on reaching out to people that won't have intent. Right.

I mean when we as marketers get those targeted ad campaigns, it's like, oh, I know what you're doing.

Yeah, yeah, we know, we know. Now again, it's that little bit of a craft because where, where I, I tell people that, that, you know, that effect is important for the short term, but the equation for the long term is completely different because in the long term, right. You don't know if someone that is not a great fit today is going to be a great fit in the future. Right. So if you have effect, you know, efficiency channels where the cost per presence or per impression or click is low, you can justify to waste some of that money today because it will create a brand impression or perception for the years to come on that person. And we have seen some companies that do that, right. That invest on non buyers today because they know they will become buyers in the future. They will have the budget, they will have the authority, eventually they will have the need and they will need it at some point. And the same happens with prospecting, right. Maybe if you broaden your net, you will not get a ton of leads or qualify leads today, but you will present the brand, you will explain the product, you will describe what you do and if you have someone that listens, even if that person doesn't act today you have done a little bit of marketing even when your intention was only sales. Yeah.

You're like laying the groundwork to be a part of the that person's decision set when they get to the point down the, down the road.

And every company will have their own formula. But we typically say, you know, try to do 50, 50, right. Try to invest either on qualifying qualification effort or inbound efforts or prospecting efforts. 50, 50, you know, put 50% at least on what you need to happen today. Right. I need more email leads. I need to get prospects that are interested in our products and are great fit today and the other 50 into the future. Right. Into not this quarter, but the next year, the following years.

Wraps up this conversation for today.

We have sold the world today.

All right, well we will see you guys next time.

Thanks thank you so much. Bye. Bye.