In a tough investor market, consistent revenue is key to standing out and making it to the next round of funding. When prospects stop returning calls, outbound click rates decline, and pipeline dries up, how will you keep growing? The answer: inbound funnels.
The good news is that most companies have a powerful, untapped inbound marketing resource at their disposal: their website.
Far from just a place to park a demo form and spout some value prop copy, your website should serve as a source of leads and, ultimately, revenue. In fact, it could be your most cost effective marketing channel—at 61% lower cost per lead than outbound.
And here’s the thing: every established, late-stage company knows this, because they’re investing in lead routing. Early-stage companies, on the other hand, think they don’t have the traffic volume to justify the investment.
Let’s dispel this and other myths by talking about the risks of ignoring lead qualification, and the benefits you can realize by making it a priority.
Is lead qualification worth it for startups & early-stage companies?
We often hear from startups and early-stage companies: We don’t have that much website traffic, so lead qualification isn’t worth it.
Nothing could be further from the truth. Even if you have a moderate amount of site traffic, lead qualification can seriously impact your business.
Consider the following stats:
- Average site visitor conversion rate: 2-5%
- Average lead to opportunity conversion rate: 13%
- Average sales close rate: 19%
So let’s assume you have 5,000 monthly visitors to your website. Apply those average conversion rates, and you’ll get:
- 250 leads per month
- 33 opportunities per month
- 6 customers per month
If only 33 out of 250 leads are likely to convert to opportunities, it makes sense that you spend more time with the 33 and not with the other 217. Lead qualification helps you identify who those 33 are.
And if your LTV is high enough, six customers per month is a solid revenue base that’s just waiting to be exploited.
Of course, these numbers are bound to change based on your organization and the nuances of your ICPs and industry. But this example is at least compelling enough for you to investigate and start testing.
The risks of ignoring lead qualification—especially for early-stage startups
If you don’t invest in lead qualification, your startup is sure to face significant risk:
- Missed opportunities. How many leads go uncontacted because you haven’t gotten around to it? How many highly qualified leads are uncontacted because you’ve been wasting time on unproductive conversations?
- Poor user experience. Every prospect has a reason for contacting you. If you respond to an unqualified lead expecting a sales conversation, they’re going to have a poor experience which will reflect negatively on your business.
- Misallocation of resources. There are only so many hours in a day. You shouldn’t waste time on unproductive conversations—especially if sending them to a marketing nurture or product manager can provide mutual value more effectively.
Why you shouldn’t wait to build a lead qualification & routing system
In an effort to be capital-conscious, many startup operators cut corners in key areas. Rather than invest in a lead qualification & routing system, they’ll string together Calendly, Typeform, and Hubspot with a scattering of Zapier integrations.
This is a mistake. According to data from Cleo in 2020, this mistake costs companies upward of $500K annually.
Let’s say you’re an operator who’s solely responsible for sales. You already have a million things on your plate—you don’t want to waste time selling to people who will never buy.
A simple lead qualification setup that captures data, qualifies leads, and automates meetings with good-fit prospects can save you hours in the day. Over weeks, months, and years, that extra time adds up.
You shouldn’t wait until you achieve a certain size or scale before you start realizing value from lead qualification. In fact, the earlier you invest in lead qualification, the more effectively you can scale.
How to set up a basic lead qualification funnel
So what does a basic, starter lead qualification funnel look like in action? You don’t need anything fancy to get started. All you need is a system that, when someone converts on your website, answers the following questions:
- Is the lead an active buyer?
- Is the lead a good fit for our product or service?
Here’s a simple, four-step process to identify and properly route leads who meet those criteria.
1. Capture data
Your lead qualification system should capture key information that helps qualify the lead. While it’s impossible to tell with limited information, certain attributes can give fairly reliable signals:
- Company size
- Company role
- Industry & vertical
- Technology use & familiarity
To capture this information, companies use a variety of tools, including form questions, enrichment data, and third party sources. The more accurate your data, the better able you’ll be to route leads to the right place.
2. Determine the lead’s intent & fit
The next step is to use that data to determine the lead’s intent. Are they looking for a sales conversation, or could these seemingly unqualified leads provide valuable feedback and insight into the market?
The data you capture in the previous step can also determine whether the lead is a good fit for your business.
If you only work with Fortune 1000 companies, then a seed-stage startup isn’t going to be a good fit for you.
If you sell software to help sales leaders manage hundreds of reps, a company size of 11-50 employees isn’t going to be a good fit.
While you can automate lead routing based on certain signals, it’s important to remember there’s always subjectivity involved. Be sure to have human review processes to interrogate the data and make sure your automations aren’t inadvertently missing key opportunities.
Default, for example, provides centralized inbound pipeline views to allow human validation across all stages of the prospect’s journey.
3. Determine the appropriate destination for the lead
All qualified leads could end up with an account executive. Some will first go through an SDR. In some cases you’ll have enough data from the outset to automatically qualify and send straight to the AE.
Alternatively, you may have a self-serve, product-led growth model. In this case, you would route the qualified leads to schedule a demo and unqualified leads to set up an account and start a trial.
If the lead isn’t qualified, there are a number of actions you could take:
- If they’re not an active buyer but are a good fit for the product, put them in a marketing campaign for further nurture—then re-engage them in a few months
- If they’re interested in the product but aren’t likely to buy, send them to a product manager so they can offer feedback or market insights
- If they’re a potential integration or strategic partner, connect them with the appropriate person to initiate those conversations
4. Automate lead routing
Once you’ve mapped out all the possible destinations for a lead, the final step is to build a lead routing system to make sure that when leads come in, they end up in the appropriate place.
One misconception is that lead routing tools are super expensive and out of reach. However, Default can help you build a scalable system for a fraction of what the big companies are spending.
Additionally, you may think you can handle your inbound conversions without lead routing software. However, if you want to scale fast, you’ll hit a tipping point where manual routing just won’t work. Putting in a lead routing system early in your startup’s journey can save time and headaches down the line.
Default is an all-in-one platform for lead qualification, routing, & scheduling—and it’s ready to launch in minutes, not months. If you’re ready to start maximizing your inbound traffic, see it in action today.