Inquiries

How Effectively Are You Managing Your Valuable Leads?

Know Your Cost of Leads

Do you know how much it costs your company to generate profitable sales leads? The emphasis here is on profitable - because not all sales leads are profitable. Nor do they each cost the same. However, they represent good money you’ve spent to buy more sales opportunities for your sales force. 

Of course not all sales leads are born equal. They come in many shapes and sizes. From advertising, trade shows, seminars, direct mail, email promotions, teleprospecting and other promotions. Each lead costs you, and someone in your organization is comparing cost with revenue generated.

Effective Lead Qualification Essential

Generating an inquiry is of course the first step. The purpose of lead qualification is to turn them into prospects. And prospects into customers – hopefully lifelong customers.

All leads (at some point) must be qualified whether we like it or not. The sooner the better!  More often than not the most effective way is to outsource to an experienced sales support agency with a history of sales qualification success.  Why?  Because it’s unlikely you will develop an in house resource staffed with a dedicated and professional Business Development Team of the highest caliber that are focused entirely on the lead qualification process.  If you have (or create) an in-house resource to do this then your actual operational costs will be higher and profitability therefore will be lower.  

Some companies believe they can avoid the cost of qualification by turning the leads over to individual salespersons (or in some cases to the salespeople of their Channel Partners). A more effective solution is to pre-qualify and only have a salesperson engage once the potential exists for a sale. The salesperson - whose time is far more costly - can then focus his or her time entirely on the job of selling.  

Impact on sales force sales productivity can be as high as 400% when a salesforce is focused entirely on pre-qualified leads!

Leverage your CRM - Require feedback from your Salesforce

While many opportunities require immediate follow through (and the sooner the better!) others require multiple follow ups over an extended period of time before they mature. Salespersons without the support structure (i.e. a functioning and workable CRM) to manage and control future sales appointments may permit many of these qualified opportunities to gather dust and die.   On the other hand few companies who have CRM’s actually leverage them to maximize sales force productivity (a subject covered in other articles and blogs on the ETI site)!

Are you in control?

  • Do you know exactly, at any time, what happened to each sales lead you distributed ? To every salesperson or salesforce, VAR, channel partner, distributor? To every office in the U.S.? Worldwide? Last month? Last quarter? Last Year? Year before?
  • Do you know exactly how much each sales lead cost?
    • Per ad source?
    • Per VAR?
    • Per distributor?
    • Per salesperson?
    • Per area?
    • Do you know exactly how much sales volume each sales lead or source produced?
    • Which source generated the greatest number of sales? Per ad? Per month, season, period? Highest to lowest?
    • How much you profited?
    • Do you know which VAR, distributor, salesperson, is most efficient in terms of number of sales leads converted? Over any period? Highest to lowest?

Feedback, Feedback, Feedback

Feedback is the crucial element to successful lead management and tracking. Yet there are many salespersons, both in your direct and indirect sales forces who don’t understand the importance of disciplined feedback. As a result, they don’t provide the necessary status or progress reports on each sales lead for which they are responsible.

The consequence of this is that no CRM or equivalent will work for you. An exceedingly high price for a company to bear. Leads are the lifeblood of business. And since you’ve already incurred the high cost of generating and qualifying the leads, it is intolerable to lose the immediate and future business they represent. And you lose the rewards of lifetime sales. Worse, you aid the competition.

Sales Leads are a Perishable Asset

How you manage leads makes the difference between a wasted investment and a solid return on investment!

Once your company spends money to find a prospect, the clock starts ticking; each inquiry has a life span.  Some of the leads may take a year to buy something, some may take six months, and some will only take a few months, or a few days.

We know that nearly half of any group of leads will buy; however, the perishable asset issue arises when leads are not followed-up promptly, or at all.  The facts (research) show that just because some sales leads are six months to a year old, half of any given group of leads with the same age is still in the market to buy.

As the great hockey player Wayne Gretzky said, “You miss 100% of the shots you don’t take.”   Companies are not immune from the same issue.  No (or slow) follow-up, no sale.

Far too many companies experience sales lead asset losses because their sales and marketing people do not follow up and contact prospects.  Sometimes it occurs because follow-up is slower than with their competitors or follow-up fails and the prospect doesn’t hear from the company at all.

Michael Falkson, CEO of eti Sales Support, said, “ETI's experience shows that 80% of inquiries that will convert into Market Qualified Leads will do so within 18 business hours.  Thereafter your chances of success will fall off dramatically“.

It makes sense to understand that buyers have a timeframe to buy.  Eventually they:

    • buy a product from you,
    • buy from your competitor,
    • decline to buy the product category (a different product entirely),
    • lose funding and don’t buy anything, or
    • never had an intention to buy in the first place (students, prisoners, competitors, etc.).

Regardless of the reason, the reality is that any group of leads from a given month has a life span.  Each month a few make a decision and disappear; they are dead to you.

However, how these inquiries are handled, contacted, qualified, and entered into the pipeline is vitally important. B2C marketers and salespeople know response to consumer inquiries is a race - - response times from inquiry to that first call from the lead holder can be down to less than a minute.

In B2B, response times are more often within an hour or two, or ‘same day’ for best of breed sales departments with inside salespeople.  Those who are asleep respond in days or weeks, and then wonder why the marketing isn’t working for them. The company’s investment in marketing is lost, and the potential asset has failed to buy.

Why it matters:

First, fast responders sell more than those who are slow, sluggish, unhurried, leisurely, and dawdling in pursuit of a prospect. In other words, those who take days  or weeks to contact a prospect.

In B2C and B2B, the best salespeople understand that faster is better and slower is also-ran.  The first person to speak to the inquirer creates an expectation level for others to follow.  The sales rep who is first to answer questions directs the conversation; he or she often becomes a “trusted advisor” and steers the inquirer to the features and benefits unique to their product and not so unique to competitive products. The subsequent delivery of pricing (a proposal?), literature, white papers, articles, case studies and other educational materials further cements the first responder in the leadership position.  Great first responders deliver pricing and answer questions the same day, before competitors make the first call.

Delayed response means a higher rejection rate. Prospects often ignore delayed responders as they no longer need information.  Plus, they see the delay as the first indication of the value of the business relationship: slow to respond, slow to deliver, slow to service.

Some leads may never mature for these ‘follow-up slow-pokes’ because budgets can be canceled, the inquirer changes jobs, the committee never meets, and what appeared so promising dies in a whimper.

Will You Be a First Responder or a Dawdling Responder?

The decision to be first is within your hands.  You can put the tools and the people in place to accomplish this within a few days; it’s a series of simple steps.

    1. Outline the sales stages required to make a sale.  Get agreement from salespeople.
    2. Outline the buying stages of the prospect.  Talk to customers.
    3. Meld items one and two as much as possible so that Sales is aware of and delivers information the prospect needs.  You now have the sales stages for the CRM system.  If the prospects expect pricing in the first call or proposals immediately, give it to them.  Read Zero-Time Selling by Andy Pauliii.
    4. Drive inquiries into a CRM and marketing automation system within a minute of the prospect submitting their form.  The CRM tool has to deliver the lead to Sales within your agreed-upon parameters.
    5. The marketing automation system swings into action and delivers information and content based on the buyer’s needs (form) or actions while on the site.   Many systems grade the inquiry by website actions, forms submitted, where they have been on a site and for how long.  Some new systems use machine or artificial intelligence to understand the buyer’s profile, accuracy of the address, email and phone numbers, previous buying history, etc.
    6. The inside sales department must jump into action as soon as the lead hits the CRM system and they are notified. This often means in less than a minute.
    7. If you do not have an inside sales or qualification department and the volume of leads is substantial, go to a qualified outside service. First responder service, qualification and nurturing are what they do. They make the call, pursue the prospect, and develop a lead into a qualified status or an immediate need.   They also nurture unqualified leads until they are sales ready, which frees up your salespeople’s time.
    8. Send the sales-ready leads to the salespeople.
    9. Eventually close out those names in the database that are not buying.

For B2B, certainly there is a fast, first responder requirement even if the inquirer takes weeks or months to make a decision.

Why It’s Important:

Leads that are followed up fast will buy at a higher rate. He who is a first responder sells more than he who is not.

The issue is that leads that are followed up fast will buy at a higher rate than those that are contacted within days or weeks, or sometimes even months after the initial contact.  He who is a first responder sells more than he who is not.

About the Author

James W. Obermayer is a four-time book author (two on the subject of sales lead management), is the founder of the Sales Lead Management Association; membership is free.  He is also the host of the weekly SLMA Radio Program.  In his spare time he is the principal of 20-year-old Sales Leakage Consulting, located in Washington State.

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  1. James Obermayer, Managing Sales Leads: Turning Cold Prospects Into Hot Customers, (Mason, Ohio, Textere, an imprint of Thomson/South-Western, 2007), and Racom Books, Page 10
  2. James Obermayer, Managing Sales Leads: Turning Cold Prospects Into Hot Customers, (Mason, Ohio, Textere, an imprint of Thomson/South-Western, 2007), and Racom Books, Page 12
  3. Paul, Andy, Zero-Time Selling, Ten Essential Steps to Accelerate Every Company’s Sales, Morgan James Publishing, 2012
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