Improving Sales With Lead Generation
April 22, 2014
“How do I improve sales?”
The question is as old as commerce itself, and it’s an issue that comes up over and over again. Yet very few of the companies I work with have discovered the very real need for a lead generation plan, and fewer still have actually undertaken one.
The vast majority of small business owners understand that they have to do something to keep the sales pipeline full, but whether they lack the time, the money, or an understanding of where to begin, the net result is usually the same: they don’t do anything.
Consistency is Key to Successful Sales Efforts
The first thing many business owners figure out is that it’s very difficult to effectively wear that hat themselves. Ask a president, CEO, vice president of operations, or another senior-level manager who has tried it, and they’re likely to tell you that given their day-to-day responsibilities, being consistent with their sales efforts is almost impossible.
One problem is the fact that reaching even a modest number of prospects—let’s say 10—typically requires more than seven attempts just to reach that prospect. When targeting C-level prospects, conventional wisdom holds that 12 call attempts is the average number needed to make contact.
In the case of lead generation efforts aimed at individuals with product development, engineering/design, or similar roles (those who don’t spend their day sitting by the phone, in other words), the difficulty of catching them at their desk pushes the number of required call attempts to 10 or more.
10 hours of dialing, 100 calls, 10 prospects
That means you can count on making 100 or more phone calls in order to reach those 10 prospects.
On average, a well-executed lead generation initiative requires 10~15 solid hours of dialing every week—that’s a bit more than a typical president, CEO, or other senior staffer can squeeze into their calendar.
Let’s consider some other popular options for improving sales leads: trade shows and trade publication advertising.
Marketing for a typical trade show starts more than 90 days before the actual event as you begin the task of driving traffic to your booth. That effort ramps up as the show draws closer, and usually includes daily (or multiple daily) email blasts and social media updates during the event, as well. Think of the time and expense that go into rental of booth space, power, furniture, carpet. And then there are the logistics required to get people and materials to and from the show, airfare, hotel rooms…
Even with a basic 10’ x 10’ inline booth, a trade show can easily cost as much as $10,000. A good show might generate 50 quality leads, roughly half of which would meet the “sales-ready lead” definition. And what happens after the show? Someone has to start the follow up process ASAP for fear of losing that expensive sales momentum.
Trade Publication Ads:
The cost to run a half-page, four-color ad just one time typically starts at several thousand dollars, although the actual amount will vary widely depending on the publication. For that amount you effectively place your spot adrift in a sea of pages crowded with other advertisers; that’s why to be effective, it’s generally accepted that a given ad should run four or more times. The good news? The ad will be in front of thousands of individuals. The bad news? You don’t know who they are, how to follow up with them, or even whether or not they were interested in your ad.
Time and Money Well Spent
Lead generation efforts, on the other hand, can be designed to offer practical, effective, focused outreach. It begins with the creation of a targeted list of prospects—an art in and of itself. The most effective programs also include some sort of positioning exercise, time spent sharpening your messaging and value proposition in advance of any calls or outreach.
With clear messaging and a recent prospect list in hand, it’s time to consider the Rule of 45. Simply put, this states that 45% of all inquiries (not just qualified sales leads) will buy from someone. In the B2B space, the timeline for that purchase is generally 12 months. Whether or not they buy from you is a matter of how fervently you chase that new business.
The Rule of 45
While time is a key factor in this rule, the most proactive way to capture your company’s fullest share of the marketplace is consistent follow-up; pursue just 25% (a consistent number reported by many companies), and you’ll only compete in only 25% of the available deals.
Lean Times Call for Lead Gen
Clearly, the best way to improve sales is to actively and aggressively pursue the prospects in your target markets. Yet time and time again, I hear companies tell me they’ve decided to curtail lead generation spending because their cash flow has fallen off.
What these companies fail to realize is during lean times, lead generation is more important than ever! If lead generation spending is slashed, sales will continue for a few months as orders work their way through the pipeline. Once the queue is empty, recovery is (at best) several quarters away. It takes time to rebuild the inquiry level, and even more time to refill the pipeline.
Just consider the average sales cycle for your product, and you’ll see that the rebuild time is considerable. If you need to increase sales, you need to boost lead generation immediately. To quote James Obermeyer, CEO of the Sales Lead Management Association, fewer leads for six months means a smaller pipeline for nine months, and that means declining sales for three to twelve months.
Sustained Lead Gen Efforts Pay Off
You will notice a bit of lag in that timeline; the time between the start of any lead generation initiative and the day that the initial interest turns into actual orders can be several months. In other words, there is a real need to stick with lead generation. As with any process improvement effort, the results don’t materialize immediately. But if you persist and put real energy and enthusiasm behind it, lead generation will result in greater sales.
Can you afford to suffer through declining sales for the next year? If not, the lesson is clear: curtail sales lead generation spending at your peril. The consequences for your pipeline and sales revenue can be significant and long-lasting!
To learn more about CONNSTEP’s lead generation services, contact us today.
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