Every Lead That Didn't Convert Is A Learning Opportunity

There are lots of reasons why a good lead may not convert into revenue, or even a qualified sales opportunity. This can be very frustrating, but don't throw the baby out with the bathwater! There is so much you can learn from leads that don't convert. This intel is pure gold for adapting your value proposition, your messaging, your operations, to get that much closer to product-market fit.

WHEN GOOD LEADS DON'T CONVERT

​First, you need to rule out process and team reasons why good leads don't convert to qualified opportunities:

• Poor definition of “Marketing Qualified (or Sales ready)” lead. Are they genuinely good leads? Do marketing and sales agree? 

 

• Sales process and tools. The team is hungry but the tools are non-existent, or simply not streamlined to show the right information and ensure the right follow-up. As Jason Lemkin says, the #1 most important thing you can do with your leads is implement an SLA (and have the right systems to enforce it!) 

 

• Effectiveness of the Sales team. If leads are high-quality and everyone agrees that this is a proper MQL or "sales-ready" lead, then leave no stone unturned. What can be addressed within the sales team?

Read more: How To Generate MQLs That Turn Into Real Opportunities.

If you are convinced the marketing and sales are firing on all cylinders, and MQLs are simply not converting, this is when the real market intelligence starts to show itself through patterns of lead behaviour. Use it to shape your go-to-market strategy, or your product itself!

• The timing is not right. A lead's need may simply not be urgent. They are just educating themselves. However, if this is a pattern, then the product itself may be ahead of its time and the market overall is just learning about it, preparing budget for it, or simply not ready for it.  

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• Too competitive. Inbound leads that very directly ask for quotes are actually not always great prospects, especially in a mature competitive market, because they are often just getting as many quotes as possible. They may even have a preferred solution already and they're just contacting you to help validate their preferred option.

 

• No budget or authority. The person is very interested but just not close enough to the decision maker, or even close enough to influencing the decision maker.

 

• The lead doesn't want to talk. Some people simply won't engage until they are absolutely ready to buy.

 

• The "pitch" doesn't connect. Whereas all the above may not be within your control, this one definitely is. Sales is an all-hands-on-deck effort and all teams need to pitch in to prepare the right materials to support conversion from lead to revenue.

 

• Pricing. Depending on the type of business, particularly in high-volume SaaS businesses, pricing can make a difference. It's less about lowering your price and making sure you segment customers correctly to apply the right pricing model to the right segment.

 

• The product isn't right. Our marketing has tapped into a real problem and urgency, but somehow after they evaluate your product, there is a blocker. This is where qualitative data can really help to understand the gaps, whether through win/loss interviews or more informal feedback and conversation.

WHO IS GATHERING AND ACTIONING THIS INTELLIGENCE?

It is critical to have a person or team on the front lines responsible for directly experiencing it and sharing it with the organization so that we can adapt quickly. If the team is not continually recording and sharing all of this rich intel, change that today. This is what will allow you to nimbly adapt your pitch, timing, product features and overall value prop accordingly. This could be a marketing growth manager, a product leader, even a sales operations lead.

The key is to have a person deeply focused on the details of each lead and the patterns of lead behaviour. This is typically a marketing, product or growth leader, not just an admin mechanically generating an end-of-month report from Salesforce.

WHEN IT'S TIME TO PIVOT

If everything is aligned process-wise, you have a dedicated team whose primary focus is processing MQLs, a killer pitch deck and product, and the leads are all right in the target audience - but they’re simply not buying - another question to ask if whether you have the right target audience.
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For early stage companies that don’t have product-market fit yet, this is a continual process of understanding the market and pivoting until you hit it right (see Do This 1 Thing For Product/Market Fit). Maybe the problem you are solving is not urgent enough, or you're just ahead of the curve and not yet urgent enough, or what you're selling is valuable for a different audience, or you need to change something about the offer or the message to better connect. For established companies, it is also possible that the world is changing and your target market that used to be so hot is now too competitive, saturated, or disrupted. Your target market needs a refresh.

Further reading:

• How Do I Generate MQLs at a New Startup?
• How to Generate MQLs That Convert Into Real Opportunities
• The Complete Guide To Interviews That Lead to Product-Market Fit​