3 Ways How Low-Quality Leads Can Hamper Your Business Growth

by Debbie Apr 24, 2021
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“The Lead Generation Process Starts by Finding Out Where Your Target Market 'Lives' On The Web.”
-    Wayne Davis (Lead Generation Specialist)

Source: Dazeinfo

Lead generation is one of the most challenging tasks and expensive tasks for businesses. Consistently generating low-quality leads can cost thousands of dollars to companies, hamper their growth, and reduce overall customer satisfaction. 

In this article, we will understand how low-quality leads can stunt the growth of your business. Before diving deep into the impact of low-quality leads on a business, let’s know some crucial fundamentals:

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What Are The Key Differences Between High-quality And Low-quality Leads?

A lead or a business prospect is considered a business or a person who can eventually convert into a paying client or customer. Leads are usually not termed as good or bad leads, but they are categories as qualified or unqualified leads.

A high-quality or qualified lead has a genuine interest in your business and is seriously interested in your products or services. These leads have a solid potential to buy your offerings. 

Not every qualified lead ends up becoming a paying customer, but they have a higher chance of a conversion. Low-quality or unqualified leads are those prospects who either aren’t capable of affording your company’s products or services or having very little and even no interest in them. 

Unqualified prospects have many questions about your offerings and are like hit-and-miss because of their lack of product understanding. Low-quality leads have the slightest chance of a conversion. Just because someone visits your website or dials your sales reps doesn’t mean that he/she is a qualified lead. 

Every lead has to go through your sales funnel, which comprises four crucial stages to be nurtured and turned into a paying customer:


Source: FunnelKake

Let’s explore a few characteristics of qualified and unqualified leads for understanding the differences between them in a better manner:

What Are The Crucial Characteristics Of Qualified Leads?

  1. Qualified leads either have already finished or are in the process of completing the lead nurturing campaign cycle.
  2. High-quality prospects are crystal clear about what exactly they are looking for.
  3. Qualified leads usually have low churn rates because they close on their specific terms.
  4. High-quality prospects have done their educational research before contacting your business and are in complete control of their buying cycle.
  5. Qualified leads have an estimated budget in their mind to go ahead with.
  6. A high-quality prospect has the authority to approve a sale.

What Are The Crucial Attributes Of Unqualified Leads?

  1. Low-quality prospects are usually uncertain of what your business offers.
  2. Unqualified leads are usually not sufficiently nurtured so they can close their sales cycle.
  3. One of the significant characteristics of poor quality prospects is that they aren’t sure about what they want or what are their specific requirements in a product or service.
  4. It’s not impossible to turn unqualified leads into paying customers, but their churn rate is exceptionally high.

Qualified leads deserve all the sales attention and resources your business has to generate conversions and ROI. But figuring out which leads are qualified and which are the low-quality leads is a daunting task. 

So, let’s take a few crucial techniques to separate wheat that’s qualified leads from the chaff, which are the inferior quality leads!

Why Segregating Unqualified Leads From The Qualified Ones Is Important?

Chasing unqualified leads could be the biggest mistake for any business as it’s a sheer waste of your sales team’s time and efforts. Most of the companies end up grabbing inferior leads, and by the time they realize that the leads are unqualified, they already have spent lots of money and resources trying to turn those leads into customers!

The process of identifying and avoiding low-quality leads can help you in quickly analyzing whether you are wasting your time on a prospect who doesn’t have any intention of purchasing your products or services.  The process of filtering out the unqualified leads is also known as lead qualification. 

The lead qualification process helps figure out whether a prospect aligns with your ideal buyer persona and has a higher chance of turning into a paying customer.

One of the best sales qualification strategies is BANT which helps in determining whether a lead is likely to be converted into a customer or not:

Source: Lucidchart

Chasing qualified leads also keeps your sales reps encouraged and motivated all the time, which is a plus point for your business as it allows them to grab more such prospects that can be nurtured and turned into customers.

What Are The 3 Ways In Which Low-Quality Leads Can Hamper Your Business Growth?

When it comes to leads, no leads are better than chasing the unqualified ones because there will be no conversion if your prospects don't have the authority, budget, or state of mind to afford your offerings. Many new or inexperienced businesses end up chasing low-quality leads, but they don't know how these prospects can stunt their organization's growth.

Let's take a look at some of the crucial ways in which unqualified leads can block your business progress:


1. Low-quality Leads Can Drain Your Bank Balance

Lead generation is, without a doubt, one of the most crucial and expensive processes for your sales team.  A well-organized lead database, rigorous analysis, and a robust automation platform are a few core elements of a winning lead generation campaign.

Your lead generation program has various costs to justify ROI, and chasing unqualified prospects and bearing all these fixed costs will only cost you lots of money that will be a complete waste.

2. Chasing Unqualified Prospects Is Time-Consuming

Your sales rep's time is one of the most precious resources for your business, and there's nothing worse if they will spend that time on unqualified leads. Identifying prospects, chasing them, and nurturing them to turn into a paying customers each phase is incredibly daunting. 

If low-quality leads are stuck in your sales funnel, it's a sheer waste of your time. Your sales reps have to struggle with numerous cold calls and follow-ups with the hope to find qualified leads that can be converted into customers, which is time-consuming.

3. Poor Quality Leads Stunts Your Productivity

Your conversions will never increase if you are spending time with low-quality leads. Every poor quality lead wastes your sales reps' effort and time that they should have spent on chasing the right prospects. 

It demotivates your sales team and hampers their performance which eventually shows in their low productivity. You are risking more than what you can earn by pursuing a low-quality prospect. 

So, it's better to walk away from such leads and focus entirely on chasing the qualified ones who have the potential to purchase your products or services.

What To Do With Unqualified Leads?

No matter how much effort you make, your sales team might encounter many low-quality prospects. But this doesn't mean that you should be rude with such opportunities. Remaining cool, calm, and welcoming with unqualified leads is also a smart move. 

So, let's look at three crucial reasons why you should not straight away reject low-quality leads:

I. You Aren't Aware Of The Peers Of Unqualified Leads

An unqualified lead might not be willing to buy your offerings, but you never know if they are somehow related to or acquaintances with somebody who is your existing customer. 

If your customer will tell the unqualified lead about your business and if you treat your customers well, they'll mention that too, which might encourage the low-quality prospect to think about your business. 

II. Not At This Point Doesn't Indicate 'Never'

Every lead and even the unqualified ones have some or the other reason to contact you. If, at the time of the first contact, inferior quality leads aren't ready to make a purchase doesn't mean that they'll never buy your products or services.

If you portray yourself as an amiable and helpful brand now, you will be the first one they will contact once they make up their mind to take the buying decision.

III. Low-Quality Leads Can't Be Customers But Can Be An Advocate

Not every lead is there to be turned into a paying customer, and a lot of low-quality leads might be inclined towards your business niche, for example, professionals or hobbyists without purchasing power.

People who are interested in your business talk online and in-person to other enthusiasts. If you give these advocates value, they'll spread the word about your business.

What Are The Six Crucial Ways Of Identifying Low-Quality Leads?

Marketing analytics is much more than just crunching numbers and data on spreadsheets. You can easily monitor each prospect's behavior on your web portal and track what he/she is following or sharing on social media platforms for:

a.    Identifying their core areas of interest.
b.    Dig a little bit to know about their genuine preferences.

Investing time on social media channels can be one of the most effective customer engagement strategies. These platforms help you build a loyal community of potential customers, identify qualified leads, find influencers for your brand, and much more!

Once a prospect fills your website's contact form, the best technique is to track his/her digital footprint across your marketing campaign, which will help you in identifying whether that particular lead is of a low-quality or high quality.

There are a couple of proven ways to identify and nullify an unqualified lead before investing time and resources. Let's look at these in brief:

I. Analyzing Leads' Activities

Keeping an eye on leads' activities, such as before contacting a lead, you must check whether a lead has opened your marketing email or visited your website recently. 

If you contact leads randomly without analyzing their activities, chances are higher that you will end up chasing poor-quality prospects who aren't willing to engage with your brand.

II. Take Help From Gated Content To Filter The Poor Quality Prospects

"Great content is the best sales tool in the world."

Marcus Sheridan (Digital Marketing Expert)

Establish higher lead thresholds; for example, prefer creating gated content to segregate leads who have a genuine interest in your products or services from the ones who are just passing the time!

Content marketing is a proven lead generation technique to grab the target leads, and gated content guarantees to deliver qualified leads at your doorstep. Gated content is online materials like eBooks, whitepapers, tutorials, etc., that require the visitors to fill out a form and provide their details as email addresses before allowing them to access the content.

The visitors who will fill these forms will be the qualified leads who are genuinely interested in your products or services. Gated content might be a barrier to entry because every visitor wouldn't provide their details.  Still, it filters the inferior quality leads and helps businesses in grabbing only the qualified ones.

Here's an example of a mobile marketing eBook by Appboy that requires visitors to fill a five-field form before accessing the content:


Source: Instapage


III. Research About The Demographics & Professional Details Of Your Leads

Analyze the lifestyle or employment status of your leads which is especially useful for B2B companies. 

For example, if a B2B company provides services to a particular organization and if a person has left that organization, he/she wouldn't be a viable lead. Besides, with the help of analyzing your prospects' job titles, you can identify the key decision-makers that should be chased because they have the actual power to buy your products or services.

To understand your target audiences better and chase the right leads, you can create buyer personas that are a detailed description of your ideal customers. You create buyer personas based on your ideal customers' personal details, interests, behavioral traits, demographic and professional details.

Here’s an example of a B2B buyer persona:

Source: HigherVisibility

IV. Study Your Website Pages 

Identifying the crucial areas of interest can help a lot when spotting unqualified leads. You can track which specific pages of your website potential customers spend the maximum time and which pages they skip. 

The traffic data of your website pages will help you in customizing your approach to align with what your customers are looking for!

V. Analyze The Effectiveness Of Your Sales Campaigns To Study Leads Behavior

While analyzing your sales campaigns' effectiveness, you can understand which specific user conduct indicates sales readiness and which needs to be nurtured with the help of a lead nurturing campaign. It will allow you to segregate the poor or low-quality leads from the qualified ones quickly based on their behavior.

VI. Listen To Your Sales Team & Their Pain Points

A sales professional's efficiency is determined by the kind of leads he or she receives. But eventually, if a lead can't afford or isn't interested in your product, even the best salesperson can't close the deal!

You must listen to your sales team and strengthen the sales processes. Dig deeper and find out with your sales professionals' help the reason behind particular leads not getting converted. 

There might be some issues with such prospects, for example, they have different preferences, or your lead generation techniques might need refining. Whatever the case, it can help you to figure out whether you are chasing unqualified prospects or not.

Assume you have an electronic repair shop. You receive many calls from customers looking for electronic products; it's an indication that you must calibrate your marketing campaigns because somewhere, you are targeting the wrong leads!

Businesses should invest in retargeting campaigns to convince their existing customers to repurchase their products or services. That's much easier than chasing and converting an utterly new lead into paying customers.

Separating unqualified prospects from qualified ones is a daunting task, but marketing automation can be the solution for accelerating your lead-identifying process by eliminating manual tasks and steering your efforts in the right direction.

Once you have filtered the unqualified leads out and identified the ones that are most likely to be lucrative, your sales reps will be able to close top deals by chasing only the sales-ready prospects. Your sales reps will be able to analyze leads behavior, spot the prospects whose specific needs are aligned with your business, and provide them with customized solutions to satisfy their requirements.

Identifying the sales-ready or qualified leads is one of the most significant elements of the marketing process. When you understand which specific leads to chase, closing deals becomes a piece of cake!

The Closure!

Whether you are doing business in the brick repair or eCommerce niche, low-quality leads will hamper your growth and block future success. 

However, with the help of being transparent in your business processes, qualified lead generation can be accelerated.

To filter the unqualified leads, you can make your organization's marketing and sales teams operate in alignment so that they can define specific parameters for high and poor-quality prospects.

The more you are honest with your organizational practices, products, values, prices, etc., the easier it will be for the qualified leads to discover your business. 

Keeping this fact in mind is crucial as your business grows.

Capturing only qualified leads helps in maximizing your website conversions and increasing the bottom line of your business! 

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