Industrial and Manufacturing Marketing Blog

How Unqualified Leads Bog Down Sales Pipelines for Industrial Companies

I have yet to come across a manufacturer, a distributor or an engineering firm that didn’t ask for more leads. No surprise there!

The more I probe, the clearer it becomes what they really want are more requests for quotes or proposals. This is understandable since the sales pipeline needs to be full and active at all times because of the long sales cycles that’s typical for industrial companies.

However, this singular focus is causing a lot of frustrations because not enough leads generated by marketing are converting into sales opportunities. If you haven’t already heard or read about this problem, here are two stats that will make you sit up and think.

  • 79% of marketing leads never convert into sales. Lack of lead nurturing is the common cause of this poor performance. (Source: MarketingSherpa)
  • 61% of B2B marketers send all leads directly to Sales; however, only 27% of those leads will be qualified. (Source: MarketingSherpa)

I can cite many reasons for this disconnect. Based on my experience as an industrial marketing consultant working with clients, the root of the problem is the lack of understanding and/or spending enough time to understand the differences between Marketing Qualified Leads (MQLs), Sales Accepted Leads (SALs) and Sales Qualified Leads (SQLs). As a result, Sales continues to blame Marketing for generating “crappy” leads that never turn into sales.

For a more in-depth explanation of these terms, see my post “SAL is the Glue that Binds Sales and Marketing in Lead Generation.”

Sales Funnels—Traditional vs. Modern

The sales funnel used to be simpler in the past. The truth is today’s industrial buyers do not follow a straight line path from the top of the funnel through to the bottom. Digital marketing and social media have disrupted the traditional process and it has become a lot more complex now with many more opportunities for leakage from the sales pipeline.

Traditional vs Modern Sales Funnelsfunnel

Lead Generation vs. Demand Generation

Even though these two terms are used interchangeably, they are not the same when it comes to your sales pipeline. A while back I read a very interesting article by Eric Wittlake (@wittlake) where he made an important distinction between the two. According to his article:

Lead generation is collecting registration information, often in exchange for content, in order to build a marketing database for email or telemarketing follow up. The direct outcome of lead generation is new contacts available for sales or marketing.”

Demand generation is the practice of creating demand for an organization’s products or services through marketing. The direct outcome is that your audience is more likely to purchase your products and services.”

As you can see from these two definitions, the objectives are very different and are the primary cause of the perennial tug-of-war between Sales and Marketing. The two functions have to be synced in order to generate leads that accelerate your sales pipeline. I’m sure you’ve heard it a hundred times before about the importance of aligning Sales and Marketing. It sounds simple in theory but it is a huge challenge in the real world.

To overcome some of these challenges, you should consider the following:

Marketing shouldn’t focus only on generating new contacts from downloads of free content. Their responsibility must extend further into lead nurturing and qualifying leads based on a variety of factors including understanding visitor intent and interests.

Sales cannot take follow up action only on leads that need an RFQ/RFP now and ignore the rest because 50% of the leads that are qualified are not yet ready to buy. (Source: Gleanster Research). Sales and Marketing need to work together to create effective lead nurturing strategies that will keep qualified leads engaged with relevant content and help them move closer to a buy decision.

Telemarketing can be effective but its role needs to be redefined. This critical first human touch shouldn’t be wasted in cold calling and blind prospecting. Its value needs to be maximized by using it to fully qualify new contacts based on pre-defined criteria developed jointly by Sales and Marketing.

I’ve found Marketing Automation that is synced with Sales Automation tools to be extremely valuable in getting Sales and Marketing to work together towards a common goal of increasing the company’s revenues. Objective lead scoring, lead nurturing, handing off and routing fully qualified leads, tracking and measuring ROI are some of the other significant benefits of using technology in industrial marketing.

I can also tell you from my own experience with using different Marketing Automation platforms for clients, it requires a significant amount of work at the startup stage and qualified people in place to sustain the process of generating fully qualified leads that have a better than average chance of turning into sales opportunities. Technology alone is not a silver bullet for solving all your lead generation problems and it certainly isn’t “set it and forget about it.”

Let me direct you to some of my earlier articles on this topic that may help you gain a deeper understanding of the challenges of industrial lead generation.

Achinta Mitra

Achinta Mitra calls himself a “marketing engineer” because he combines his engineering education and an MBA with 36 years of practical industrial marketing experience. You want an expert with an insider’s knowledge and an outsider’s objectivity who can point you in the right direction immediately. That's Achinta. He is the Founder of Tiecas, Inc., an industrial marketing consultancy in Houston, Texas. Read Achinta's story here.
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  1. Marketing is essential for any business and same is the case for the industries. This article is quite informative and puts light on the importance of converting the website visitors into customers. What I learned form this article is that it is really important to employ an apt strategy to convert the potential customers into actual customers. And everything is not a piece of cake but the effort done at the beginning will help you in your future business endeavors.

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