Many business owners and managers seek my help to create more sales leads. While lead generation, marketing messages and advertising can all be super tough nuts to crack, the problem may not always be on the generation side of the subject. Before spending a ton of time, money and effort fixing a “leads problem,” it’s important to make 1,000 percent sure your team is making the very best use of the leads already in hand. A good way to do so is to look into in-bound leads management and conversion rates.
In-bound leads management
Many of the small businesses I’ve worked with have told me that they never let any leads go cold. I’m skeptical of that and here’s why: according to InsideSales.com, a company well known for its extensive research on lead conversion, the average lead is only contacted 1.7 to 2.1 times before it’s abandoned. In our case, it’s usually totally abandoned—the lead is not put into a nurture program, is not earmarked for re-targeting and is not called or emailed.
Think of how much time, effort and energy—both direct and indirect—went into creating that lead. Businesses work hard on branding, messaging, websites, reviews and social media, not to mention the resources that go into advertising and targeting. When, finally, all that work results in a call or email from a potential customer, it may be after hours or at a moment when your receptionist was on the other line or when you were in a sales appointment and couldn’t take the call. That potential customer became the statistic and took their interest to more responsive pastures.
Reaching out once or twice to make contact is not only a waste of those marketing energies and dollars, but also a huge opportunity cost. So, the first “leads leak” you can plug is to have a set process to follow up with potential customers. I’ve seen businesses tackle this a few different ways; here are two of my favorites.
A client who thought she had a leads problem was getting ready to hire a sales person and amp up her ad budget to accommodate the increased need for leads. Instead, I suggested she hire a part-time admin whose only job was to carry a cell phone. The business line was routed to that phone and the employee answered it any time it rang, day or night, and booked appointments immediately. This strategy solved the leads problem as bookings doubled.
Another client, a good-sized business with plenty of leads, had a receptionist whose job was to call back all its leads first thing in the morning. But the company lacked a systematic approach that ensured those leads would be tried at least six times. The company also hadn’t considered targeting their leads at times that would yield higher call-to-answer ratios. By implementing some structure around the time of day, frequency and modality (adding email and texts to follow up on calls), the company saw an increase of 7.5 percent in appointment bookings.
Sales conversion rates
Sales conversion rates are, by far, one of the most popular and one of the least accurate statistics that companies use. From organizations with multiple sales people to smaller owner-operator type businesses, so many employees are flat-out guessing their sales conversion rate. They “get a feel” for this number and then just make an educated guess as to what it is. My experience is that, on average, people guess about 10 to 20 percent higher than their actual close rate.
If it were terribly difficult to calculate, I might not feel so strongly about estimating sales conversions, but it’s an easy metric to track. Simply keep count of the number of appointments (reference your calendar at the end of the week if you have to) and divide it by the number of closed sales for the week. Then, multiply the result by 100 to yield your weekly percentage close rate.
Those that accurately track close rates can also get better at reviewing sales that didn’t close, providing an opportunity to try and recapture that business. Paying more attention to the reasons for lost sales can provide insight on how to improve that number. Making this shift in close rates can make a huge impact on overall business.
But before any of the benefits can kick in, you must master the metrics and really manage your number. Think of it this way: if you are currently closing at 30 percent and really work hard to increase it to 50 percent, you just made more money from exactly the same leads you had in the first place.
When you know your exact close rate and add processes to your sales approach, you can work that number and focus on improving it. Because, the fact is that those closing less than 30 percent are throwing away seven out of 10 leads and wasting marketing dollars.
Run your numbers. Implement a proven sales process (which consultants can help create if necessary) and you can make more money from the leads that you already have on your desk.