Guest post by James W. Obermayer, CEO of the Sales Lead Management Association www.salesleadmgmtassn.com. Well, this isn’t entirely true. The actual number is 45% of all inquiries turn into a sale for someone. When Mike Simon (founder of Inquiry Handling Service, now Harte Hanks) taught me that number, I was a wee communications manager just out of college. The information changed my marketing and sales career.
Of course, I only half believed him that half of the inquiries I gave our salespeople at Beckman Instruments were as worthy as he contended. I had to prove it to myself.
After completing several “Did You Buy Studies” (necessary because the salespeople reported back on only 25% of the inquiries given them), sure enough…45% of inquirers had bought something within one year (we surveyed inquirers that were 12 months old). 24-26% of inquirers bought something that were six months old (yep, we went to a different group). And 12-15% of inquirers bought within three months from a different set only three months old.
Yes, we measured conversion from a single source (tied to avoid mixed sources), but always from a single point in time within 30 days.
Once we had these numbers, I started to report to management on the ROI from various lead generation sources. That stirred up a few hornets. Some sacred-cow lead generation sources were proved to be less than stellar, while some thought to be ‘fillers’ were purchasing more than expected.
The variable we found was us. We knew that our lead generation activities found buyers, but with only 25% follow-up by our salespeople we were not participating in 75% of the opportunities. Duh!
Simple variable, but oh so hard to change!
Increase follow-up and you will increase sales. We found that increasing follow-up, by almost any means, increased sales. Hence, the justified claims from marketing automation software and lead generation and qualification companies that their programs increased sales 200-300%. No surprise there.
The lesson learned? If you can’t get your salespeople to follow up 100% of the inquiries, find an outside firm to nurture the leads for you. No budget? Think about the lost opportunities. Begging your salespeople to do the obvious usually doesn’t work. Spend a few bucks and have professionals nurture the leads until each is sales ready.
Toss in nurturing with a marketing automation program and you’ll be beating 75% of your competitors. Why only 75% you ask? That’s because 25% have already figured out that half of the inquirers buy something from someone… and that someone is the person and company that follows up.