If you’re in sales, own your business or are a solopreneur take the below example and adjust so that you get the impact. The figures I used are more in line with a Fortune 500 company since those are my roots.
Mental Strength Teaser:
Q. You just landed a new job, and you’re asked if you’d rather be paid $30,000 per day for 30 days, or get paid 1¢ on day one, 2¢ on day two, and continue to double your daily salary for 30 days? The obvious answer for people who don’t do the math is to take the $30,000 per day . . .
But, in reality . . .
A. The 1¢ daily salary when doubled daily for 30 days and totaled equates to over $10 million. The $30,000 per day salary would only provide you with $900K.
The moral of the story is that sometimes value isn’t as apparent as you would think. The fast answer isn’t always the right answer!
Now, fast forward to present day and something a bit less hypothetical…well for a few — the value of last quarter’s marketing.
Consider the following sales and marketing metrics:
- Lead generation marketing budget $1,000,000
- Leads generated 20,000
- Net qualified leads 8,000
- Close rate 20% (solid)
- Total number of sales 1,600
- Average deal value (assumed) $7,500
- Total gross revenue $12,000,000
- ROI 12:1 (impressive!)
So, is it time for celebration?
At a 12:1 ROI, you’d think so. But, knowing where this story started, you should be asking yourself, “What’s the catch?”
The catch is that you may not be considering the 80% of all qualified leads that didn’t close — a whopping 6,400 leads!
Most organizations have a “fly-by” approach when it comes to how they view leads. If the prospect isn’t ready to make a purchase in the next 60–90 days, then they are a “bad lead” at least in the eyes of sales. That’s not surprising, nor is it really “wrong,” given how sales organizations are structured and incentivized. You want them to be focusing their energies on what they do best: selling.
Best practices dictate that you determine the value of these “no’s” before you relegate them to all being “no…not ever.” There are many types of no’s that still have tremendous value to your and your company, for example:
- “No — not until my budget is approved.”
- “No — I’m not the right person (but I’m willing to tell you who is if you earn my trust).”
- “No — not until our procurement process runs its course.”
- “No — not until I can make a convincing case to management.”
- “No — not until our current contract expires.”
. . . to name a few.
According to a “did you buy?” study of people who responded to a direct marketing campaign, 45% indicated they will buy from someone within one year of identifying themselves as interested.
Said another way, if those in that 45% aren’t buying from you, they will be buying from your competitor. Equally as important, the same study also shows that nearly half of those who did buy (43%) took more than six months to make the purchase.
Grant it, the price of product weighs heavily into the purchase/sales cycle, and the point here is MANY individuals and group eventually DO make the purchase.
Let’s face it. Most sales forces don’t have the patience or tools to manage potential buyers for that long. But the underlying message is still the same: If you aren’t following up with these leads, you’re leaving money on the table.
But, I’m getting ahead of myself.
Let’s develop the true value of these no’s — assuming the same value, metrics, etc. as above. From the perspective of lost opportunity, the implications are staggering.
Assumptions:
- # of no’s: 6,400
- % that will buy sometime this year: 45%
- % of “your fair share” 33% (or insert your market share)
- Total resulting new business 950
- Average deal value $7,500
- Total incremental gross revenue $7,125,000
Considered from the perspective of pure lead generation, that’s HUGE news — just as huge as if you were to:
- Increase your list universe size by nearly 600,000 names
- Find a new way to market that would drive your response rate from 2.0% to 3.1%
- Make a 55% increase in your marketing budget
As I said, it’s HUGE news!
Now, what if you found that the bigger opportunities were the ones your sales teams were initially missing? For both B-to-B and B-to-C, the truth is intuitive. The larger the deal, the more it must be considered. So, the real value associated with these no’s would be even greater than projected here.
But, why not just get new leads? Leads that are hotter will close faster.
Because, it’s easier and usually cheaper to work a lead that you already have than to find a new one that doesn’t know you yet.
Don’t believe me? See for yourself.
Going back to the original math:
- Lead generation marketing budget $1,000,000
- Leads generated 20,000
- Net qualified leads 8,000
- Cost invested to generate a qualified lead $125
- ($1 million ÷ 8,000 = $125)
Thinking through this, you can intuitively come to two conclusions about the leads that did not turn into immediate sales:
- 6,400 leads have a “street value” of $800,000 (6,400 x $125 = $800,000)
- You can spend an additional $125 to maintain contact, nurture and incubate these leads before it becomes easier (and cheaper) to find a new lead and truly worth walking away from your initial investment.
So, we know these unclosed leads are valuable. Now, as a marketer, what comes next?
I read about a major fitness equipment marketer that has over 13 steps in their nurture program. So, for them, a ‘no’ isn’t really a ‘no’ until the prospect has said so 14 times. They’ve discovered that if a follow-up communication can generate even a .2% response sales rate, then it’s worth executing versus investing to find a brand-new lead.
Any good nurturing system should meet three criteria:
- Controlled by marketing, not sales (so best practices can be followed)
- If you’re a solopreneur YOU control this, do not farm it out until you can bring someone in house.
- Timely, relevant, personal and valuable
- Designed to enhance the brand and promote sales
Each nurture stream can and should be specifically designed to align with your sales methodologies. The following is an example of how three media channels — telemarketing, email and direct mail — can be integrated to provide a very robust and largely automated nurture strategy.
Assume that the nurture program for a lead begins when that lead has been ‘qualified’, but refuses a sales presentation. The lead needs to be handed back to marketing to own and develop.
Note: Sales needs to be convinced that there is no penalty associated with this action, it just makes everyone (and the company) more productive. They also need to be convinced that the lead will be handed directly back to them when the lead is ready to buy.
Telemarketing
Immediately exercise your rights under the Do-Not-Call legislation and contact the non-buyer. Start by asking several innocuous and typical customer service questions regarding their experience with your sales person. Also include a question as to their reasons for not buying.
If the non-buyer requires more information, get it for them. If they know when they will be closer to a purchase (such as when a contract will be up for renewal), capture that date.
Email
An email should be launched to follow up the call. Thank them for their time, confirm that the contact was made and provide links for more information and possibly more offers.
Those who click on the links and opt in to receiving more product/ service information continue to be excellent prospects. Serve them up an email series designed to educate them on all your products/ services benefits.
An email nurture stream is what many services/company’s use, like Microsoft’s LiveMeeting, Microstrategy and eBay to get their customers to engage after signing up for a free trial. They are ingenious systems and worth signing up for a free trial just to experience.
There are way too many e-mail services out there…a few are AWeber, iContact and Constant Contact.
Direct mail – Thank you:
‘Thank you’s’ can be sent to a prospect for nearly any reason, though it’s important that it’s somewhat bona fide. It has dramatically improved a prospect’s willingness to extend dialogue. I like the old fashion way of hand writing them, but there are several automated systems out there that can assist you like Send Out Cards.
Exciting News – E-mail:
“As someone who has shown interest in the past, <share new relevant news here, then make offer>” — you get the idea. You can set-up a Google alert with specific keywords to trigger a proactive “touch.” Also, SmartBrief has a selection of hot industries you can get a condensed news and stories from.
Survey – E-Mail
Assume that they are a new lead for the very first time. Survey them with questions like what problems are they trying to solve, are they more interested in speed or price, etc. (Remember, you don’t have to qualify them again, you already know that they are valuable.) Survey Monkey is great for this
Other:
Consider using trigger mailings tied to the data you captured in your original program. Or, focus on a contract date or a seasonal event that drives purchasing.
In each of the cases, the point is to stay top of mind with relevant information. Your mission is to keep the door ajar so your sales team or the customer can come back and re-engage when the time is right.
Summary
After looking at the bigger lead generation picture, you can see that these nurture activities are a pittance compared with the $125 that it costs to generate a lead in the first place.
So, while these methods may not be intuitive, you now know the secret to the mental strength teaser. It should now be an easier decision for you to invest in nurturing activities. And now you can smile every time you hear that you have another batch of no’s…you know you’re closer to your personal success!
Please share your thoughts in the comments below
If you’d really like to make fast progress towards realizing your full personal power and potential as well as develop the mindset of confidence, request your Introductory Consultation today!
Roland Gilbert
Roland N. Gilbert is Vice-President and founder of the Perennial Consulting Group a management consulting, coaching and sales force development firm that focuses on overcoming fear and other limiting beliefs and creating empowering solutions so that individuals can live out their passions!
No comments:
Post a Comment