Dear SaaStr: At What Point Should a Lead Convert to an Opportunity?
The point at which a lead should convert to an opportunity or deal is when it meets specific qualification criteria that indicate it’s worth investing sales resources.
This is where having a clear definition of a Sales Qualified Lead (SQL) or Sales Qualified Opportunity (SQO) becomes critical. If you’re converting leads too early, you’ll clog your pipeline with low-quality deals. If you’re converting too late, you risk losing momentum.
Here’s how to think about it:
1. Define the Handoff Criteria
A lead should convert to an opportunity when it meets the following criteria:
- ICP Fit: The lead matches your Ideal Customer Profile (e.g., company size, industry, geography, etc.).
- Pain Point Identified: The lead has a clear problem that your product can solve.
- Engagement: The lead has shown meaningful interest, such as attending a discovery call, requesting a demo, or engaging with high-value content.
- Buying Intent: There’s evidence of intent to solve the problem soon (e.g., a timeline, budget, or external trigger like a regulatory change).
These criteria should be documented and agreed upon by both marketing and sales teams to avoid disputes over lead quality.
2. Use Qualification Frameworks, At Least a Basic One
Frameworks like BANT (Budget, Authority, Need, Timeline) or MEDDIC (Metrics, Economic Buyer, Decision Criteria, Decision Process, Identify Pain, Champion) sound complex at first
But they can help ensure leads are properly qualified before they’re converted.
For example:
- Budget: Does the lead have the budget to buy your product?
- Authority: Are you speaking with the decision-maker or someone who can influence the decision?
- Need: Is there a clear pain point or problem your product solves?
- Timeline: Is there urgency to solve the problem within a reasonable timeframe?
If a lead doesn’t meet these criteria, it’s not ready to be converted into an opportunity.
In the early days, you don’t have to make this too complicated. But at least make it a checkbox for these 4 to move from Lead to Opportunity.
3. Focus on Sales Accepted Leads (SALs)
Before converting a lead to an opportunity, it’s helpful to have a Sales Accepted Lead (SAL) stage. This is where sales explicitly agrees that the lead is qualified and worth pursuing. It’s a forcing function that ensures alignment between marketing and sales:
- Marketing generates the lead and qualifies it as an SQL.
- Sales reviews the lead and accepts it as an SAL.
- Once accepted, the lead is converted into an opportunity and entered into the pipeline.
This process reduces friction and ensures only high-quality leads make it into the pipeline.
4. Use Behavioral Triggers
Behavioral triggers can help you decide when a lead is ready to be converted.
For example:
- High-Intent Actions: Visiting your pricing page, requesting a demo, or engaging with a case study.
- Engagement Thresholds: Reaching a certain lead score based on activities like email opens, webinar attendance, or website visits.
- Direct Signals: Explicitly stating interest in a discovery call or demo.
These triggers indicate that the lead is ready for a deeper sales conversation and should be converted into an opportunity.
5. Don’t Convert Too Early
Converting leads too early is a common mistake.
If a lead hasn’t been properly qualified, it will clog your pipeline and waste your sales team’s time.
For example:
- At Adobe Sign / EchoSign, we learned that SMB leads who hadn’t used our product at least 3 times were far less likely to convert. By tightening our qualification process, we improved pipeline efficiency and conversion rates. If they’d sent 3 or more contracts through the system as a PLG / self-serve lead, it was a good one.
The key is to strike a balance—don’t wait so long that you lose momentum, but don’t rush leads into the pipeline before they’re ready.
6. Iterate and Improve
Regularly review your lead-to-opportunity conversion process to ensure it’s working:
- Analyze Conversion Rates: Are leads converting to opportunities at a healthy rate? If not, refine your qualification criteria.
- Conduct Win/Loss Analysis: Look at closed-won and closed-lost deals to identify patterns. Are there specific types of leads that convert better than others? Use data, not just your gut.
- Get Feedback from Sales: Are AEs reasonably happy with the quality of opportunities they’re receiving? If not, adjust your process.
The goal is to continuously improve your process based on real-world results.
Bottom Line:
A lead should convert to an opportunity when it’s qualified enough to justify sales resources.
This means it fits your ICP, has a clear pain point, shows engagement, and demonstrates buying intent. Use frameworks like BANT or MEDDIC to guide qualification, and ensure alignment between marketing and sales with a Sales Accepted Lead (SAL) stage.
If you’re seeing low conversion rates, it’s often a sign that leads are being converted too early or without enough qualification.
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