Understanding the Hidden Costs of a Bad Lead

Experts have said for years that sellers need to prioritize lead quality over quantity.

The great thing about pivoting to this strategy is that fewer—yet higher quality—leads provide sellers with the opportunity to close faster deals. This happens in part because good leads can express an intent to buy the company’s product or service and, as a result, they would be ready to engage.

While sellers tried to find ways to do more with less, the industry has taken a turn for the worse:

“[Organizations] are under pressure to achieve ever-increasing lead targets which often end up in quality taking second place to quantity. The result: pipelines filled with low-quality leads, disappointing conversation rates, and unproductive friction between marketing and sales.”
—Integrate, The Hidden Costs of a Bad Lead

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Poor-Quality Leads Cost More Than You Probably Think

The average cost of bad leads is estimated to surpass $4 million annually.

Low-quality leads, however, will not only harm a company’s revenue stream. According to Integrate, they also diminish organizational trust and weaken down funnel programs.

Similar evidence comes from Digital Marketing Depot’s guide, where experts make a deliberate argument designed to show what happens if sellers reach out to a bad lead—they inevitably end up:

• Dealing with leads that have no interest in their solutions

• Losing trust with their partners

• Wasting budget and decreasing program ROI

• Missing prime prospects

When sellers are trying to accelerate the closing of a sale, “the real cost of a bad lead is time,” says Marina Lemas, Integrated Demand Marketer at Gigamon. Instead of nurturing revenue-producing leads, sellers may spend too much time scrubbing non-legitimate leads and pursuing dead-ends—which could lead to lower lead conversion rates and a slower sales pipeline.

How to Improve the Quality of Your Leads

The need for valid lead data is evident.

Bad data—be it inaccurate, incomplete, or non-compliant information—frequently results in bad leads.

As Digital Marketing Depot points out, “the effects [of bad data] are felt even further down the line, when [sales teams] follow up on key [leads] with irrelevant content or by prematurely nurturing them.”

The fact that your data is accurate and complies with regional laws or regulations doesn’t mean that duplicate lead records can’t be eventually collected; and it’s worth noting why sellers need to detect and merge duplicate data. Having multiple lead records on the same individual in your database may result in over-engagement and decreased conversions.
The optimal way of properly qualifying top-value leads and avoiding unexpected costs is through high-quality data.

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