Everything you need to know, and nothing more, about leads and lead management in a services firm.
One of the first things many professional services firms do when adopting a CRM system for the first time (whether it’s Salesforce, Dynamics or something else) is “turn off” the leads database. This is fairly logical for a firm that is relying heavily on “referral-based” marketing and operating predominantly within its known network. A firm that operates within its known network only really markets to its clients, high-value prospects (people the firm’s partners know personally and would like to do business with, but have not), and its referral partners. But this isn’t scalable nor sustainable.
If a firm is going to unlock sustainable revenue growth and value creation it has to build a marketing model that’s capable of reaching beyond its known network. It has to build a model for bringing people it does not know into the network through lead generation programs. It needs a lead generation program.
But if you’re going to start a lead generation program, you’ll need a process for managing the leads you generate. This article covers just about everything you need to know about leads and how to manage them.
What’s a Lead?
To start, a lead is a person. Not a project. A lead may be someone you know (at least by title). Or someone you don’t know. It’s anyone who enters your marketing database who hasn’t been disqualified. You may have put them there (you built a list). Or they might have put themselves there (by subscribing to your newsletter). A lead is someone that you could do business with now or at some point in the future. My favorite definition is this—a lead is a “clue to sale.”
Why Leads Matter
Leads become prospects. Prospects become revenue. Having the ability to systematically attract a healthy volume of high-quality leads is a key leading performance indicator for your firm’s revenue. If you’re attracting more leads this quarter, chances are good you’ll have more revenue opportunities next quarter, and more revenue the quarter after that.
Inbound Leads vs. Outbound Leads
Generally speaking, an outbound lead is a name on a list. It’s someone you’ve identified as a potential fit for your firm’s services based largely on who they are (i.e., the company they work at and their title). An inbound lead is essentially the opposite of that. It’s someone who’s identified themselves as a potential client for your firm based on their interest in your thought leadership or services (i.e., they subscribed for a newsletter or made a direct inquiry about working with you).
For more on this, read Weighing Inbound vs. Outbound Lead Generation Tactics.
All Leads Aren’t Created Equal
As you’d probably expect, how you generate a lead affects everything that happens during the sales cycle. An outbound lead has no relationship with you whatsoever. You’ve identified them as someone you’d like to do business with, and you’ve designated some lead generation tactics (email, telephone, LinkedIn outreach) to make that happen. Their natural inclination is to retreat away from your outreach. Who is this firm? Why are they contacting me? I have no need right now. This retreat shapes the entire sales journey from the smallest things (i.e., opening and clicking emails) to the larger things (i.e., the nature and tenor of qualifying and value creation conversations).
By contrast, inbound leads behave quite differently. Often, they’re leaning towards your firm. They were referred to you. They found you in a Google search. They heard your prospect. They’re intrigued with what you have to say, and they’re seeking to learn more. They have an active problem they’re struggling with, and they think you could help. They see you as a potential trusted advisor long before any sales dialogue and that shapes their behavior during the sale.
Assigning Lead Sources
Because of this push/pull relationship between inbound and outbound leads, it’s important that you establish a process for determining and assigning a lead source for anyone who enters your marketing database. This will help you determine what’s working in your marketing efforts (and what’s not) at some point in the future. Depending on the scale and complexity of your firm, you can get much more targeted in your lead sources, but as a starting point you can use a collection of sources along these lines:
- Referral
- Organic – search
- Organic – social
- Paid media
- Webinar
- Event
- List built
Lead Statuses
As you develop a more robust inbound marketing or lead generation program, you’re going to find that not only was “turning off” the leads database a bad idea, but that you need a much more effective way to organize and segment the leads within your database.
New
To start, virtually every lead that enters the system starts with the status of “New.” If it’s an inbound lead you may know nothing about them. It’s just a name and an email. Or just an email. Your task is to figure out what to do with them, and how to progress them through a buying journey over time.
Marketing Qualified Lead (“MQL”)
An MQL is anyone who meets the firmographics and demographics you identified as your ideal client. Generally, we recommend thinking about this on 2-3 dimensions, and building it into the lead management model. As you build target lists or advertising segments for outbound lead generation programs, you’ll use these as your criteria. As you develop progressive profiling rules to manage your inbound leads you’ll use this as your criteria for that as well:
- Company Size—Identify a revenue or headcount threshold at which a company becomes a viable prospect for your services.
- Title/Role—Identify the typical titles or roles who most frequently hire your firm.
- Industry—Identify the industries where you’ve had the most and least success.
Ultimately, a lead that meets all these criteria earns the status of “MQL” in your database. You’ll notice that all leads you add to the system yourself will automatically meet the standard of MQL.
Sales Ready Lead (“SRL”)
As you get more serious about your inbound marketing program, you’ll likely want to introduce a status of SRL to your lead management model. This is the designation that says it’s time to start a business development conversation. This can happen a few ways:
- Direct request—An inquiry through your website, a response to an email, or a LinkedIn message.
- Implicit request—The individual crosses a lead scoring threshold based on their behavior. In this case, you may designate someone in your firm to do some light targeted outreach to see if you can help.
Rejected
As you adopt and develop more effective thought leadership marketing programs you’re going to raise the visibility of your firm. Yes, you 5x the traffic to your website. This brings a slew of new potential clients. And it brings a slew of noise. You’ll need to capture the ability in your system to weed this out. Generally, we suggested creating a “Rejected” status in your database to push those leads aside. As you get more sophisticated you can introduce automation rules to enable the system to clear these out of the way for you.
For more on lead qualification, read Developing a Proper Lead Qualification Process for a Professional Services Firm.
Lead Scoring
Lead scoring is a way to categorize your leads from highest potential to lowest potential based on either their demographics or their behaviors. Ultimately, it’s a way to determine the quality of your leads database, and to help your sales development reps (SDRs; if you have one) or business development leaders prioritize their outbound efforts. You may never bother with lead scoring nor need it. But, if you’re generating a lot of inbound leads and you want to do more than just “aggressively wait by the phone” for them to call you, then lead scoring is one way to do that.
Lead scoring is a fundamental aspect of most marketing automation systems, but not really part and parcel to most CRM systems. You only really need to do lead scoring if you:
- Plan to proactively reach out to leads you generate from your marketing efforts.
- Have more leads than your business development organization is capable of managing.
- Need to prioritize and become more efficient in how you prioritize your business development efforts.
These days, we generally recommend to keep your scoring as simple as possible. Just focus on those behaviors that indicate that some is potentially leaving the “learning” stage of their buying journey and entering the “vetting” stage of their buying journey. Generally speaking, this means they’re no longer just reading thought leadership articles, attending webinars, or downloading eBooks. They’ve started to do things like read case studies, download practice info sheets, or read service pages. Essentially, you’ll want to assign points to those behaviors and establish a scoring threshold that notifies you when someone crosses it. Set your scoring threshold based on the number of leads that surface and how many you’d like to follow-up with.
Leads vs Prospects—When to Convert?
While it sounds semantic, in the world of CRM, leads and prospects tend to be two very different things. When you “convert” a lead, that person becomes a prospect. That prospect is associated with a company and an opportunity. Essentially, your 1 lead that was in 1 database has now split itself into 3 different data assets housed within 3 separate databases—it’s a prospect (still a person), a company, and an opportunity. These nuances will prove hugely valuable in keeping your prospects database clean, tracking your time to close, and reporting ROI on your marketing activities.
At this point, the only question you really need to answer is, “When to convert?” Ultimately, you should convert your lead to a prospect the moment you identify a potential revenue opportunity.
Closing Thoughts
Building a lead management model can be tedious and difficult at first but generating leads and accelerating lead flow is a critical step in growing your sales pipeline and growing the revenue in your firm. It has to be done. So if you’re serious about scaling your firm, then it’s generally smart to step back and get it right.
