Do your sales leads work as hard as you do?
Material handling companies spend millions of dollars trying to identify qualified prospects for their products and services. We have come to understand the benefits of targeted marketing using sophisticated database techniques. But what happens once a prospect “raises its hand” and indicates some level of interest in what the company has to say? Some sobering industry information may be illuminating.
A recent study from the Harvard Business School found that fully 80 percent of the sales leads generated from marketing programs are never followed up by the sales organization. In a similar study, Performark, Inc. stated, “As much as 90 percent of a business-to-business direct marketing budget may be spent trying to attract leads, and yet a shocking number of those leads are ignored. Of those leads that were actually followed up, over 60 percent were not called until 60 days after the initial contact. Of those leads that were followed up, a large percentage were poorly qualified. Direct marketing studies have shown that poorly qualified leads cost companies hundreds of thousands of dollars and increase the cost per lead, since poorly qualified leads are less likely to result in a sale.”
Successful sales lead management today requires a company to evaluate every aspect of its sales process. Taking a long, hard look at your current sales lead processing procedures may be the best first step toward increased sales. Here are a few areas to look at first.
Your prospect database should record and keep as much lead source information as possible. If one of the desired end results from a closed-loop sales lead management system is a suite of reports that helps management evaluate the effectiveness of each marketing activity, make sure your prospect database is set up to record the source of the lead and how it came to you (phone call, bingo response, Web, business reply card, etc.). This will aid you greatly in evaluating which programs work best for you in terms of increased responses and sales. Make sure this source information stays attached to the inquiry from the beginning of the sales process all the way to the end.
There are four specific areas of information that are required in order to build a successful marketing effectiveness reporting capability:
- Campaign Type – Identifies the type of marketing campaign responsible for stimulating a response.
- Campaign or Project Name – Identifies the name of the specific function/project.
- Source – Names the specific stimulus (source) from which an individual response was derived (purchased list, an internal list, etc.).
- Response Vehicle – Defines the response medium through which the respondent contacted the company.
Let’s face it. Quick, personalized response to an inquiry creates a very positive image for a company; it is often the first measure a prospect has of how professionally the company operates. Each company should set a goal to send out the requested information within 48 hours initially, with a long-term goal of 24 hours. It is important that the company responds with the information requested, incorporating a customized greeting and letting the person know how to contact the company if there are any questions or interest.
A company should use the source information described above plus the qualification information described below to determine how it will respond to each inquiry: Will the respondent receive a full literature pack or just an e-mail? In either case, the prospect receives information, but those who stand a better chance of becoming customers receive the more expensive fulfillment package. Not only will you respond quickly but over time you will be able to reduce your overall cost to fulfill these requests.
Qualify, Qualify, Qualify!
An inquiry is an expression of interest, whereas a lead is an expression of interest that is qualified to purchase the product or service and has an identified timeframe to make a buying decision with an established budget.
Attempt to qualify each inquiry before it is sent to the sales organization. The time and effort spent up front qualifying these leads can result in gigantic payoffs down the line in the form of increased sales productivity. Many companies argue that inquiry qualification is one of the tasks they pay their salespeople to accomplish. This is a shortsighted approach. Let’s take a look at why:
- Sales reps are paid to sell. Typically, they are paid quite well to sell. When your sales reps are spending more time selling to qualified prospects and less time qualifying inquiries, everyone is a winner.
- Inquiry qualification can be handled quite well by a lower cost resource, usually a trained telemarketer.
- When push comes to shove, the vast majority of sales reps would rather have a root canal than pick up the phone and qualify inquiries. (See above for real-world research.)
A well-designed inquiry qualification program will increase sales results and sales productivity. This process can also assist a company to determine accurately which programs are working the best to create sales.
Components of an Inquiry Qualification Program
Elements of a well-constructed inquiry qualification program are as follows:
- Define a consistent set of criteria, with significant input from sales, which help identify who is an ideal prospect. Typically, these will be what kind of company (end-user, reseller, distributor, government, etc.), what industry, an indication of either the company’s size or the size of a potential deal, what budget has been established, what is the anticipated decision timeframe and any other items a company needs to identify the companies with whom they should be spending time.
- Once these criteria have been agreed upon by sales and marketing, it is imperative to start using them whenever the company has contact with a potential buyer—at a trade show, when they come to the Web site and request information, on business reply cards, etc. This will help prioritize which companies to pursue and the follow-up timeframe, as well as become an excellent source of marketing profile information that can be used to identify companies for future sales and marketing programs.
- Start classifying all inquiries and qualified leads with a standard format. It is important that the Lead Quality code contain at least two characters: one relating to a decision timeframe and the other relating to either the company or potential deal size.
This Lead Quality Scoring format will accomplish several important objectives:
- Decisions can be made regarding which leads should be forwarded to sales. For instance, should accounts looking to make a decision 13 months from now be sent to sales? Should they be put into an e-mail nurturing process that sends out regular communications and invites them to call or visit the company’s Web site when they are ready to start evaluating solutions?
- As qualified leads are sent to sales, they will have a better way to prioritize their follow-up activities.
- Decisions can be made regarding the most cost-effective way to fulfill these inquiries.
- It is possible to track the number of inquiries from a marketing program plus the number of qualified leads, as well as the timeframe and size of these leads. As more information is tracked over time, the marketing department can evaluate which activities are generating the best leads and which activities need to be expanded, modified or eliminated.
By incorporating these elements into a comprehensive material handling sales lead management program, companies will experience increased sales results and sales productivity. Their overall cost of sales will decline and the sales cycle will be shortened.
|Meet the Author
Mark Friedman is president of The Velos Group, Inc. located in Anaheim, California, and on the Web at www.velosgroup.com.