Using a Lifecycle Marketing Strategy to Convert Qualified Leads to Customers
Finding qualified leads in your industry requires a detailed lifecycle marketing strategy. The goal when scaling your business is to find leads and convince them you're the best company for their needs.
Your lifecycle strategy works directly with your marketing and sales funnels to influence how successful you are at converting leads. Combining the two as a strategy can increase your brand awareness and monthly revenue streams.
In this guide, you will learn about qualified leads, developing a qualified lead lifecycle marketing strategy, improving your conversion rate, and the five crucial metrics to keep track of during the conversion process.
What is a Qualified Lead?
Developing a complex lifecycle marketing system is essential when turning a qualified lead into a paying client.
But you may ask yourself, "What exactly is a qualified lead?"
When an initial lead, called an information qualified lead (IQL), gives you any contact information to show interest in your service or product, they convert to a qualified lead. They also pass from the awareness stage to the consideration stage of your lead lifecycle marketing strategy.
[Infographic; Lifecycle Marketing Strategy]
As seen above, qualified leads pass through three important stages. Each stage helps to guide leads through the lead conversion funnel and helps to land you the most high-valued leads. These lead stages are:
- Information qualified lead (IQL)
- Marketing qualified lead (MQL)
- Sales qualified lead (SQL)
While you explore how IQLs, MQLs, and SQLs differ in your lifecycle marketing strategy, the three have a fundamental commonality. Your goal is to ensure you only expend resources, most notably time and money, on leads serious enough to purchase your services or product.
A lifecycle marketing strategy should be developed to understand where IQLs, MQLs, and SQLs fit within your funnel process. This helps fill in the blanks of the before – building brand awareness – and after – turning qualified leads into paying customers.
A Lifecycle Marketing Strategy Helps Convert Qualified Leads to Paying Customers
Developing a lifecycle marketing strategy requires a deeper understanding of your potential customers. Start this process by creating buyer personas, which detail the type of customers your business typically attracts or wants to attract.
Your marketing and sales team uses these buyer persons throughout their different funnel systems. Both teams' funnel processes work collaboratively to help create your lifecycle strategy.
The Six Stages of the Lifecycle Marketing Strategy
Each phase of the lifecycle marketing system helps to provide a lead with more information. You will help identify potential clients' problems, educate them on solutions, interact with them to show you care, and more.
Understanding how to structure each phase maximizes your lead development success. When implemented correctly, these six phases will help you convert a stranger into a customer.
1. Converting Strangers to Information Qualified Leads (IQLs)
After you've created several buyer personae profiles, it's time for your marketing team to begin developing brand awareness. If you're a solopreneur or small business, this step may require outsourcing a marketing agency or freelancer to streamline the process.
Don't forget to stand out from the crowd when building brand awareness. A company that blends in with the crowd will have far less business than one that puts work into being an innovator or an authoritative source.
"Your brand is a story unfolding across all customer touch points." – Jonah Sachs
When you build brand awareness, developing a unique selling point, remaining honest with your audience, and helping them identify and understand their problems is essential. Each of these will convert a stranger to an information qualified lead (IQL).
Develop a Unique Selling Point
Unless you have a unique service or product with no or few competitors, you must develop a unique selling point (USP) for your brand.
Ask yourself these questions:
- Why should customers choose my business over my competitors?
- What problems can I solve that others lack a solid solution for in my niche?
- Which products or services do customers like most about my company?
- How is my product or service worse than my competitors?
If you have answers to these questions, your marketing and sales team will know how to position your brand when building awareness. It also streamlines lead generation, making it easier to acquire more leads.
Keep It Honest
Avoid overselling your product during the brand awareness stage. Overpromising and underdelivering hinder your reviews and referrals that come later in the lifecycle strategy.
Keep it honest with your target audience to attract the most qualified leads. You want customers who appreciate your service and have a high opinion of your brand. This helps convert a qualified lead to a repeat customer.
Repeat customers are 50% more likely to purchase a new service or product than new customers, which makes customer retention crucial.
Teach Your Audience
The key to a successful brand awareness campaign involves educating your audience. During the initial education period, you want to focus your marketing strategy on providing general information and answering specific questions related to your industry.
Only briefly mention your product or service during this phase.
You want to provide valuable insight to grab your audience's interest. Help them understand their problems and the solutions available using effective marketing and content strategies.
Any prospect interested in exploring your products or services after the education phase becomes an IQL.
2. Convert Information Qualified Leads (IQLs) to Marketing Qualified Leads (MQLs)
An information qualified lead sees your product or service as a valuable solution to their problem. They just haven't engaged with you in any meaningful way – yet.
[Picture: Lead to MQL]
Tracking IQLs is the most challenging part of the process. Unlike MQLs and SQLs, IQLs provide you with no data to track. Instead, they move from educational content to learn more about your product or service.
Since you lack any meaningful data for this phase, you'll need a solid strategy at this point of your lifecycle marketing strategy. This step aims to convert a solid IQL to a marketing qualified lead.
What Is a Marketing Qualified Lead?
A marketing qualified lead is a potential buyer who has shown genuine interest in your service or product. They interact with your company, have given you their contact information, and want to know more about your products or services.
Once potential clients reach the MQL phase, they are ready for more individualized marketing techniques. This helps inform the lead about your products or services in more detail, provides more insight into your brand values, and continues to educate them on the problems they face and the solutions you offer.
Marketing qualified leads have not decided to invest in your product yet. But they do see value in your product or service. With the right marketing strategy, you can motivate them enough to move them through to the sales pipeline.
How Do I Know When a Lead Turns to an MQL?
After moving past the education phase, an IQL begins looking further into your products and services. They have expressed interest in your company and have started engaging with you.
You can define an MQL by when an IQL:
- Gives you their contact information.
- Downloads a copy of a form on your website.
- Requests a quote, estimate, or consultation.
- Signs up for your email list.
- Applies for a demo.
- Repeatedly visit your website's home page or price page.
- Watches a video of your service or product online.
Once a lead has contacted your business, they can move through the pipeline to a sales qualified lead.
Your business will need a skillful nurturing process with your MQLs to get more information to and from them and convince them to purchase from your brand.
Lead-to-MQL Conversion Rates
The average lead-to-MQL conversion rate is 31% across all marketing channels. With an effective marketing strategy, you'll have enough steady traffic to convert many prospects during this phase.
Calculating Your Lead-to-MQL Conversion Rate
[Infographic: Equation for Lead-to-MQL]
3. Turn Marketing Qualified Leads into Sales Qualified Leads (SQLs)
Once a prospective customer becomes an MQL, you want to see their potential to turn into a sales qualified lead.
The MQL-to-SQL phase marks the handoff process from the marketing team to the sales team. To deliver the best SQLs for your sales team, your marketing team needs to condense the MQL list down using other factors. The team also nurtures MQLs until they are ready for the sales process.
What is a Sales Qualified Lead?
A sales qualified lead is a potential customer who has been carried through the MQL process and is now ready to be converted to a buyer. A detailed, streamlined process between your marketing and sales team is essential during this marketing strategy phase.
There are many factors your marketing team needs to consider before moving an MQL to an SQL. These factors can include demographics, buyer intent and interest, firmographics for B2B sales, and more.
[Infographic: Factors of moving an MQL to an SQL]
When your team makes the MQL-to-SQL conversion process as specific as possible, it makes it easier and more successful for your sales team to turn a prospect into a paying customer.
Rushing or mismanaging the MQL-to-SQL phase of your lifecycle marketing strategy increases the chances of getting low-quality SQLs. A low-quality SQL means time, resources, and money wasted on trying to sell to a person who has no interest in purchasing your product or services anytime soon.
To avoid wasting your time on leads who never convert, your marketing team needs a good plan for moving an MQL to an SQL.
The MQL-to-SQL Process
Converting a marketing qualified lead to a sales qualified lead takes more time and resources than previous phases of the lifecycle strategy. You want to narrow down the pool of marketing qualified leads to only those who are ready to make a purchase soon.
Spending more time on marketing to your MQLs spends significantly less money than trying to convert SQLs not yet prepared to purchase. A smart customer acquisition strategy takes the average cost to convert a customer into consideration, helping you focus your marketing on the most relevant, cost-effective leads.
Consider Your Marketing Budget
While the U.S. Small Business Administration recommends spending an average of 7-8% of their gross revenue on advertising and marketing, it's not a reality for most companies.
[Infographics: Marketing budget Analysis]
Most startups and small businesses spend an average of 11.7% of their budget on marketing. It is expected to increase by almost 2% in the next year as companies focus more on building brand awareness, customer relationship management, new service introductions, and customer experience spending.
Most companies notice an increase in revenue when they spend more on their marketing team. This allows your team to build better brand awareness and gives them more time and resources to nurture an MQL to an SQL.
Analyze Your Sales Budget
While raising your marketing budget helps to nurture the MQL-to-SQL conversion, the amount you spend on your sales budget is still significant.
High-growth businesses spend 25 to 45% of their sales revenue on their budget. New product launches increase that by anywhere between 10 to 30%. This means you'll spend anywhere between 25 to 75% of your revenue on your overall sales team.
[Infographics; Sales budget]
As a small business, funds are often limited to a tight budget. It may be unfeasible for you to spend more than a certain percentage of your revenue on sales.
This is where a solid MQL-to-SQL process comes into place. With superior SQLs, you can convert more leads with fewer sales representatives.
Spending slightly more on your marketing efforts to get the best sales qualified leads prevents you from overspending on your sales budget.
Think of Your Buyer Persona
Keeping your buyer persona in mind at this stage of the lifecycle helps to narrow down your marketing qualified leads. You want leads who match your target audience, have a known pain point, and are ready to take steps to move forward with a solution.
[Infographics; Buyer Personas]
While many MQLs should be your buyer personas, it's not uncommon to have plenty who don't fit your usual criteria make it to this stage. During the MQL-to-SQL conversion process, the goal is to narrow the pool to those aligned with your buyer personas.
Ensuring your SQLs align with your buyer personas optimizes the success of your sales team during the conversion process. Leads that don't fit any planned buyer persona are wildcards, which may result in more loss than revenue due to wasted time and resources.
However, MQLs that don't fit your buyer personas shouldn't be dismissed immediately. They just shouldn't be prioritized.
Keep a close eye on those other MQLs in the meantime. There may be future opportunities for your marketing team to nurture them by taking a slightly unconventional approach.
The more customers who convert through this process, the more customer data your team will have available to help you pivot where necessary. Your marketing and sales team may need to adjust current buyer personas, delete others, and make new ones.
This is all part of ensuring your SQLs are the most qualified, as your target audience may shift over time.
Determine What Steps an MQL Must First Take
Gather your data and buyer personas to determine what steps an MQL needs to take to become an SQL. Remember, this is crucial to your sales, so take your time when determining these factors.
Every business differs, even those within the same industry. Clientele and business models vary, which makes this process completely individualized. Come up with a list of criteria or checkpoints an MQL must pass through to get to the SQL phase.
You'll also need to develop a similar list for your marketing team. The contact you've made with the lead matters just as much, if not more, during the conversion process. Below are a few examples.
[Infographics: What Steps an MQL Must Take.]
Nurture Your MQLs
Nurturing your leads has been discussed throughout this section. But what does it mean to nurture your MQLs, and how do you accomplish this?
Nurturing your MQLs is a marketing strategy to get leads more informed on your product or services, show them potential pain points your business can solve, and further familiarize them with your brand.
Your marketing team needs to consider all formats they can use for lead nurturing, such as content, events, social media, direct mail, and paid media. Which platforms you'll use will depend on which your target audience likes best and which has the lowest customer acquisition cost.
[Infographics: Ways to Nurture an MQL]
Be creative during this process, as you want to stand out amongst your competitors. MQLs are less likely to be enthusiastic about your product or services if your marketing bores them and fails to leave a lasting impression.
MQL-to-SQL Conversion Rates
MQL-to-SQL conversion rates for most businesses average 13% and take 84 days to complete. While this seems low, it varies widely depending on the source of the lead.
Calculating Your MQL-to-SQL Conversion Rate
Calculating your MQL-to-SQL rate helps you understand how each step in your lifecycle marketing strategy works cohesively with one another. It's a simple process tofiguree your MQL-to-SQL.
[Infographics:MQL-to-SQL Conversion Rate]
After calculating yours, see how it compares to others in your industry. A low MQL-to-SQL conversion rate may require reworking other parts of your strategy to increase your long-term customer acquisition.
4. Take Sales Qualified Leads and Turn Them into an Opportunity
Now that you have a pool of SQLs eager to hear more about your product, it's time for your sales team to turn them into an opportunity.
This stage involves moving an SQL through the sales pipeline, where your sales reps must further convince them that your product or service is most suitable for their problem.
What is an Opportunity Lead?
An opportunity lead is an SQL convinced enough that your product or service is a solution, and they are just about ready to purchase. Your sales team and prospect usually understand the exact type of service or product desired and an estimated dollar amount by this stage.
Once you've gotten this far with your lead, the chances of closing the deal are significantly higher. To get to this stage, your sales team needs a skillful approach that helps lead an SQL to an opportunity.
How to Move an SQL to an Opportunity
During the SQL-to-Opportunity stage, your sales team works individually with each lead. They must use their sales prowess to convince the SQL that they need your product.
A successful sales team will have a sales development plan to help guide the sales team and SQLs through the sales pipeline. This helps to improve your company's SQL-to-Opportunity conversion rate.
What is a Sales Development Plan?
A sales development plan helps you organize and structure the last steps in your lifecycle marketing plan. This gives your sales team a clear set of expectations to follow, provides you with necessary lead and customer data, and helps to manage any sales-related content needed from your marketing team.
Developing a rigorous sales development process creates a more impactful and seamless sales pipeline. The starting point for this process begins at the end of the MQL-to-SQL process. Your team uses three main data points to help create a sales development plan:
- MQL-to-SQL Conversion Rate
- SQL-to-Opportunity Conversion Rate
- Opportunity-to-Close Conversion Rate
These three combined create your lead-to-sale conversion rate, which shows your sales team's overall success with converting leads to customers.
To increase your lead-to-sale conversion rate, you need to optimize each listed conversion rate using your sales development plan. You can discover pain points your sales team experiences and potential bottlenecks in your sales process.
You can then use this data to improve your team's structure, thus increasing your business' conversion rates.
Common Sales Development Challenges
A few sales development challenges most organizations face include:
Vague SQL Buyer Personas
Having a poorly defined SQL makes the job harder for your sales team. Giving them an incomplete or inaccurate SQL buyer persona leads to confusion on which sales leads are worth pursuing. They may be pitching to unqualified leads without realizing it.
Buyer personas are everchanging, and your teams should add information as you learn more about your customers. Your marketing team uses different metrics and knowledge to get leads than your sales team does to land them as customers.
If your lead-to-sales conversion rates are low, a sales development plan can help you build more robust buyer personas.
A Poor Handoff Process
Prospects move from one team to another, starting from the end of the MQL-to-SQL process. From there, your sales team needs to know who handles each part of the sales process.
Some companies prefer sales representatives to work with leads from start to finish once they enter the sales pipeline. Other companies may need a final approval process from someone higher up to confirm. Figuring out which works best for your company helps streamline a lead through the sales pipeline.
If your company prefers a handoff process, ensure it's clearly defined in your sales development strategy. Your goal is to ensure that each sales representative understands the handoff process, so no leads are lost during each transition.
No Established Service-Level Agreement
Your sales representatives need a clearly defined service-level deal that includes timelines around each lead from the moment they enter the sales funnel. Define, in exact time, how quickly and frequently a member of your sales team needs to connect with a lead and what approaches to use during different transitional phases.
This standard needs to be upheld by each member of your sales team. So, be sure it's not too stringent and difficult to maintain. But ensure a good enough plan is in place to increase your team's effectiveness and productivity.
A sales development plan helps your sales team guide an SQL to an opportunity, getting those most likely to convert closer to the end of your sales funnel.
How to Create a Sales Development Plan
Conversion Rate for SQL-to-Opportunity
The SQL-to-Opportunity phase should have the highest conversion rate compared to all other stages. The average SQL-to-Opportunity conversion rate is 59%.
Calculating Your SQL-to-Opportunity Conversion Rate
[Infographics: SQL-to-Opportunity Conversion Equation]