By January 28, 2013 1 Comments

Demand Management: Converting Leads to Qualified Opportunities

The goal of demand management is to convert leads to qualified opportunities for the sales force to close. Because the direct sales organization is an expensive resource (fully loaded cost per head), the best-run organizations are expert at allocating these expensive resources to the right opportunities at the right time for maximum ROI.

These best-in-class organizations utilize a comprehensive demand management plan which outlines how Sales Development Representatives (SDRs) or Business Development Representatives (BDRs) take a marketing lead, evaluate it and then pass it off (if qualified)   to the direct sales team.

While anyone can run a demand management function, few are able to consistently convert leads to qualified opportunities with a high close probability.   A best-in-class demand management plan establishes how demand creation, demand management, sales, sales operations, marketing operations, product marketing and sales enablement will work together. Key processes that have been jointly developed and mutually agreed upon have to be instituted as regulating mechanisms for seamless and flawless execution. Below are some of the key areas that typically comprise a “make or break” demand management function.

An Image depicting Demand Management Planning Converting Leads to Qualified-Opportunities

Lead Scoring

In the beginning, when typically there is an abundance of sales development representatives and a scarcity of leads, the issue of lead scoring is not of paramount importance. However, it is a best practice to institute a lead scoring process to prioritize leads for optimal resource allocation. This is extremely important when the demand creation plan is fully executed and demand management resources are stretched thin.

At this stage, lead scoring can become rather complex, but at the root level, the concept is to prioritize leads based upon a target account profile. A target account profile, jointly created by sales and marketing, is a composite sketch that serves as a blueprint, or litmus test, to determine whether a prospect (if aware of the solution) has a high propensity to purchase.  The goal is to segment leads into a spectrum of buckets that span “least likely” to “most likely” to purchase.

Lead scoring can happen at either the individual or account level. While the individual level is obvious, the account level is a composite of individuals based on a company or a location within a company. In both cases, demographic and behavioral data is evaluated, and points are assigned or withdrawn, based upon predetermined rules assignments. The sum of those points are then evaluated against thresholds, and the lead is then routed based upon the mutually agreed-upon rules between sales and marketing.

In summary, the goal of lead scoring is to skim the cream off the top of the lead bucket as quickly and accurately as possible so that the right sales and marketing resources can be applied to maximize the number of qualified opportunities.

Lead Rating

A lead rating model is used to establish an objective, quantitative, managed, and repeatable process for applying the right resource at the right time to each and every lead. Sales and marketing should join at the hip to document the criteria associated with prospects that have a very high propensity to purchase. Adding more criteria is not necessarily better to construct an effective lead rating model.  Capturing key criterion is critical, and   is best accomplished by incorporating historical experience and current observation from both subjective and objective perspectives. The goal of the process is to create questions (closed end) for each criterion that the SDR will use when following up with each lead. The responses are given a point value and a corresponding weight. The points are then multiplied by the weights and added to yield a lead grade.


The Achilles’ heel for lead hand-offs rests on roles, responsibilities, terminology, definitions, processes, systems, metrics and feedback. Roles and responsibilities between the demand creation team, marketing operations, sales development, inside sales, direct sales and sales operations must be clearly defined with explicit terminology and definitions. Processes need to be documented, communicated and adhered to by all, and self-regulated through systems (CRM & SFA) with real-time metrics and reports. These reports would then escalate throughout the organization hierarchy based on time and priority. Developing a call guide to document and train SDRs is a great way to solidify hand-offs.

Once there has been a live connection with a lead, (typically over the phone but it could be in-person) and responses to the pertinent questions have been processed to establish a lead grade, then the lead is:

  • Passed to sales as a qualified opportunity
  • Passed to marketing for nurturing or star bursting
  • Kept in sales development for follow-up
  • Marked as dead

It is critical to monitor the lead hand-off to ensure that the proper procedures were followed up to the decision point, the decision in fact was correct, and the appropriate follow-up steps occurred. Positive and constructive feedback should surface on a regular basis to keep the process fine-tuned.

The hand-off from the demand creation team to the sales development team is where dialogue needs to occur to ensure that the target audience is producing the desired leads in terms of titles, roles, target companies and volume. Communication between the sales development and sales teams needs to occur daily in order to validate that the right questions, answers and weightings are in place to justify a qualified opportunity and to facilitate the conversion to a qualified lead.


More often than not, a lead will not be ready, willing and able to buy in the timeframe that an organization desires. A prospect may not be ready due to:

  • No plans to purchase
  • Existing relationships with other vendors
  • Trying to accomplish the task with in-house resources
  • The selection of a competitor
  • The perceived financial instability of the vendor
  • Budget issues
  • A reorganization

If the lead rating model includes the right questions and the lead fits the target account profile but the prospect is not ready, willing or able to commit, it is critical to nurture that lead until the prospect IS ready to make a purchase. The linchpin is to segment the heterogeneous pool of leads into homogeneous segments to provide relevant content that is valuable to the prospect at their current stage of the buying process.  In general, customers, qualified prospects, prospects in the funnel, website visitors, etc. are all separate segments. Even a segment of qualified prospects could be further segmented into their role in the buying process, stage in the buying process, etc. It is important to continue to segment as long as there is relevant content and a differentiated next step.

The backbone of any excellent nurturing program is to offer the right information at the right time to the right person. It is also imperative to break the process down into baby steps as someone in a nurture path is most likely not going to receive three emails, and three phone calls within three weeks and then be categorized as a qualified opportunity. Determining and addressing smaller milestones in the buying process is mandatory for a successful nurturing program. For example, first steps could be opting in to a newsletter, attending a virtual or live event, downloading a trial, participating in a survey, interacting with a subject matter expert on a social media platform, etc. Fully understanding the buying process and establishing an ongoing relationship with a prospect are fundamental for lead nurturing to pay-off.


The best-laid plans sometimes fail or zigzag towards the desired outcome. One way to manage performance to a successful outcome is to create a dashboard and establish Key Performance Indicators (KPI’s) to serve as an early warning indicator and proactively drive actions. In the area of demand management, it is optimal to establish metrics that report on multiple time dimensions: minutes, hours, days, weeks, months, quarters and years.

In managing the sales development representatives, the final deliverable is a qualified opportunity that turns into a closed deal. However, there are other metrics that can be measured, monitored and proactively managed such as:

  • The number of meetings set
  • The number of phone conversations
  • The number of inbound and outbound phone calls
  • The number of referrals
  • The date that contact information was verified
  • The number of callbacks
  • The number of leads attempted to contact
  • The number of dead or disqualified leads
  • The number of leads sent to nurturing
  • The number of emails sent
  • The number of contacts in the database

Marketing Assessment

Before attempting to develop a demand management plan, the best first step is often a step backwards. A best practice approach is to conduct a marketing assessment to establish a baseline of where the function is today, where it should be, a plan to move to the desired state and the resources required to advance the function forward.

The marketing assessment should include people, processes, systems, data, resources, execution, strategy and vision. It is important to establish or leverage a framework that supports an objective and quantitative assessment of the current situation and the desired state. The Capability Maturity Model (CMM) has proven to be an effective framework for this purpose. Basically, there are five stages in the CMM that describe how reliable and frequently the actions, practices and processes employed generate the required outcomes. The CMM model provides a common language, framework and ranking process so that the data collected is standardized. Completing the marketing assessment will establish the baseline for planning and measuring improvements.

Demand Management: Converting Leads to Qualified Opportunities

In summary, the demand creation, demand management, sales operations and sales functions must be joined at the hip to be most efficient and effective. The goal for the organization is to generate revenue, and all of the areas mentioned above play an integral role in achieving that goal. Success requires tight synchronization around sales processes plus agreed-upon terminology, roles and responsibilities. In addition, metrics and regulating mechanisms must be built into the process for proactive monitoring and management. Understanding and integrating the above principles and concepts into a demand management function should go a long way to fully optimize the conversion of leads to qualified opportunities.

Download a Demand Management Planning Template >>


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VP Marketing on Demand

About the Author:

Peter is a strategic and visionary marketing executive and brand champion who has leveraged his unique combination of classical training and entrepreneurial experience at start-ups and F500 companies to transform technology innovations into multimillion-dollar revenue streams. His experience spans all areas of marketing, including go-to-market strategy and execution; brand identity and brand positioning; product development; sales and marketing leadership; customer acquisition and retention; and influencer and analyst relations. Peter consults with c-level executives, teaches at USF’s EMBA program and serves as an advisor to start-ups.

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