Lead Management – Lead Status, Qualification and Conversion

In this episode of the ShellBlack Whiteboard, Shell introduces the concept of the Lead Status field, Lead Qualification and Conversion. Shell discusses the necessity of determining "fit" for your products or services and whether a Lead is "Qualified" or "Not Qualified." Additionally Shell discusses the timing of converting a Lead record (early vs late). Shell talks though some scenarios in which you might want to convert a Lead besides being qualified, and the ability to de-dupe a record during the conversion process. Lastly Shell answers the age-old question – do you have to use Leads with Salesforce.com?

View this video on YouTube: http://youtu.be/kV_1uBedXZI

View part one of this segment – Leads, Accounts and Contacts and the Salesforce Data Model

Transcription of video:

Welcome everyone to another episode of ShellBlack Whiteboard. Again, Shell Black, President and Founder of Shellblack.com and Salesforce MVP and we’re going to continue our discussion on Leads. In an earlier installment we talked about the dictionary definitions of what a Lead, Account and Contact was and how they differ in the database. In this installment, we’re going to get into qualification, what is this conversion process, we’re going to talk about the timing of when you go through that. Do I convert a Lead early versus late and maybe some benefits and things to think about.

So, when you’re thinking about Leads, I want you to think about it as really a temporary bucket of where you have these records and you really are trying to determine one thing with this whole qualification convergence process. You’re trying to determine if that Lead record is a good fit for your products and services or what you do and that is qualifying the Lead. It is determining fit and qualified if we were very narrow and maybe we take it in a very traditional sales focus is, is this someone that would consume or buy or purchase our products and services? Are they a good fit for that? You can expand that a little bit and think of it also as is this person, this Lead record someone that our company could interact or engage with? So, not necessarily sell them something. So if we kind of broaden that thought for a second, maybe put on our non-profit hat, is this someone that would help volunteer for a non-profit activity or maybe is this a company that we could see ourselves partnering with and that would have value if we worked together? So maybe working together, different than selling them something, but that could be what qualifies them if they are a good fit for your company.

So Leads again, temporary bucket – the whole purpose is to vet out or screen out this population that is not a fit for what you do versus the folks that you want to engage and continue to work with and potentially sell. And the way that you kind of synthesize and work that database and trying to narrow it down really to get one of two results. You want to know are they qualified or are they not qualified and take that population and work and synthesize that population records down into that end result of qualified and not qualified is really determined by your Lead Status which is a pick list in Salesforce to see where they are in that funnel of that qualification process, that business process of qualifying.

I’m not going to get into the Lead status field too much. There is a blog post on our website that talks about how to create a well structured business process and it uses Leads as an example to talk about what your stages or status should be on that, but your Lead Status is the field that you use to determine where you are in that qualification funnel and again the outcome of qualification. Are they qualified? Are we going to engage, interact or sell to them? Or they’re not a fit for what we do and we’re going to move them out of the database and move on. And I put a third bucket in here, it’s a little squishy and it’s called qualified, but not now, and that really gets into the timing of when you should convert that record.

So, that’s going to be our little segue and I’m going to flip back to the other side of the whiteboard for a second and what I’ve done to talk about when you move that Lead into an Account and Contact through that conversion process, I’ve drawn kind of a spectrum here of converting the Lead early versus converting the Lead late and when you convert. So, first thing I really want to get across is your company, you determine when is the right time to convert it. Only your company will know what the criteria is to determine they are a fit or they’re ready to convert. So don’t necessarily use the fields that come out of Salesforce on that business process. Get together and try to figure out what that means.

But, let’s talk about the timing, so this might help illustrate when you should convert by giving you some examples. So let’s talk about what an early conversion step would be and that would be when you find that Lead is a fit for what you do, but there may not be necessarily an immediate need. You may not have a volunteer event for them to get engaged with or they are not ready to buy today, but they consume your products and services. Late in the conversion process is really when you do a lot of preselling in the Lead bucket before you jump the fence to Accounts and Contacts, and Opportunities. So a late conversion step would be not only do they have a fit, but they have an immediate need, they need a quote. You need to be working on Opportunities right now because they want to buy. They’ve said yes, I want to buy, so maybe a late conversion process would be a little bit more preselling rather than doing the sales in the Opportunity process and that would be a late convert. Then there’s the squishy middle and the squishy middle would be they have fit, they are a fit for your products and services, but there’s a need but not now.

So let me give you an analogy. So let’s say that your company is in the business of leasing cars. You find someone that has a lease today that is sitting on a lease with an existing vehicle. They are a fit just by the fact that they are in a lease, but that lease doesn’t come due for another two years, so you have a choice. Do you convert them early just saying the fact that they have a lease convert them and start tracking them as an Opportunity or do you wait until their lease starts to expire and then convert because there’s a need that’s immediate? So you have a choice. You can convert early and put an Opportunity out in the database with a close date out two years from now, or they can exist as a Lead with a follow up task for two years out when they are in that window, when they’re getting out of the lease and then you can decide to convert. This is up to you.  You might have multiple criteria, they are the decision maker, they consume those products and services, maybe they have your competitor’s product in place, they have budget, they have need. You might just say that if two out of those four things are in place, we’re going to convert them regardless of which two are in place. You determine that, but that’s maybe an analogy to help talk about the spectrum of when to help you guys focus on when is it time to convert that Lead.

Are there other reasons why you should convert a Lead? There probably are, so I’m going to give you some examples to think about, not a sales need, but there are some other reasons why you may want to go ahead and jump that fence and make that Lead into an Account and Contact. So here’s four quick ones that I could think about. So the Account already exists in the database, so let’s say that you go to a meeting and you find someone that works for Acme and you meet John Doe, but you already know a ton of people that work at Acme. You already know 14, 15 people at Acme. You may want to keep the data more organized and go ahead and move Joe over here to the existing Acme Account just because that relationship already exists and you want to go ahead and get him over there.

Let’s talk about duplicate records. This happens quite frequently. You buy different lists, you meet the same people at the same trade show and they come back in the database. Maybe you had an email marketing campaign out to your Contacts. They came in through your website from a Web-to-Lead process which spawned a Lead record for this Contact so Joe could exist here and Joe could exist here. Go ahead and convert them and get back to working with a Contact. When you convert, if there’s a campaign associated with this Lead, that campaign information will fold in just nicely during the conversion process and you can merge the Lead into the existing Contact. There’s a blog post on Shellblack.com that talks about how to de-dupe records during that conversion process and what to look for so I’m not going to go into step by step on that but I’ll give you the link in the transcript of this blog so you can go look at that.

So let’s also look at the use case of you go to a trade show and you find 14, 15 people at the same company and so you have 14, 15 Leads that are all working for the same place and again because we talked about in the first episode of the first installment of this series that all of these Leads are swimming around in the fishbowl and you can’t associate them together. You may want to structure the data better and you may want to say hey, I have 15 folks that are at a company and I’m going to go ahead and convert them into an Account so I can put those 15 people that I found at a trade show under this Account and keep the data more organized. That might be a compelling reason for you to convert rather than having a sale.

And the last thing I want to talk about on why maybe it’s okay to convert is if you have this need to create a custom object. I don’t want to get in too much on what a custom object is, but let’s say that it’s not a standard object, it’s not a Lead, Account, Contact, or Opportunity. There’s something else multiple record wise that you want to have about this person and the problem with having a custom object on the Lead side of the fence is without custom code, when you hit this convert button and you move to an Account and Contact, you need the custom objects that you’ve associated to this Lead record will get lost. The Lead record does not bring custom objects over in the conversion process. You’re going to break that data relationship. You’re going to leave the custom object as an orphan record basically. So if you do need to have a custom object, it’s better to convert and create the custom object on the Account and Contact side, you can brut force and bring that custom object over, but it requires custom code and not too many people are up for that challenge.

So, that covers a lot about Lead conversion. I want to wrap up with the question that comes out a lot and that is, do I have to use Leads and the answer is, no you really don’t and it really depends on your business model if this makes sense.

I am going to give you an extreme example to kind of make this go home and that is, let’s say that you’re a lobbyist and you’re calling on Congress, your House of Representatives and your Senators. That’s 500 some odd people if I remember my high school government class correctly. That is a finite universe of people. There’s no one that you have to qualify to understand they’re a good fit. You are a lobbyist, you call on Congress, it’s a finite universe, just make them Accounts and Contacts. You really don’t have a need for a Lead bucket. Now where the need grows is when your size of your database grows. So, if you have 10,000 Leads and a couple of hundred Accounts and Contacts that you do business with, Leads is a good place to separate the noise of who you could interact with and who you could sell to versus the folks that you’re engaged with, that you’re interacting with, that you’re selling to and supporting from a customer stand point. Noise, marketing got to be vetted out, got to be qualified versus who do you have a relationship, who are you interacting with today. The bigger the database, the greater the need to have Leads to be able to filter out and segment that population out of your database.

That wraps this up, so thanks for hanging in there with us. A couple of things before we sign off. If you have any feedback, we would love to hear it. Good, bad or indifferent. You can reach me on Twitter @Shell_Black or you can hit us on email at whiteboard@shellblack.com. That email goes straight to me. I would love to hear more from you on what you want to see in future episodes. Thanks so much.

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