Articles

Leading sales expert addresses the critical question of why sales opportunities are stalling – and how to re-energize your revenue performance

By Dan McDade, President, PointClear

Today's recessionary economy brings with it a lot of uncertainty, with buyers holding onto cash and making purchasing decisions more slowly. Naturally, this creates panic in companies that are trying to sell their products or services. Most often, their first impulse is to start filling the pipeline with even more leads. After all, shouldn't more leads deliver more opportunities?

In reality, however, just the opposite often turns out to be true. Drowning your sales reps in more leads – especially those of poor quality – can actually make things worse.

Why generating more leads isn't the answer.
Today's lower sales numbers are creating a rising interest in volume lead generation. But most often, this just results in a lot of marketing dollars being wasted. What you end up with is a big pile of poor-quality leads that fail to provide return on investment. Like Jack Lemmon said in the movie classic Glengarry Glen Ross, the leads are "weak".

Consider this: A 2009 CSO Insights survey reported that senior sales executives rate just 35 percent of leads as "good" or "excellent," and 65 percent as "average" or "poor". And only 26 percent of sales executives surveyed were satisfied with the quality of leads received.

It might be surprising to know that 79 percent of leads even today are not being followed up on by sales organizations. The reason why? Because of their perceived poor quality.

Conversely, however, when sales reps are given fewer, but better quality, leads, they can focus their time more effectively on the most likely buyers. Such a practice makes sense in any economic climate, but in our current market downturn it can be a way to actually improve efficiency and do more with less resources.

By taking a "less is more" approach and working on lead refinement, it's possible to send only the best prospects to your sales reps. This also renews the value of lead-generation programs, since reps start receiving leads they can actually use.

What are some other steps companies can take to start improving their sales performance? Here are a few that will offer the most impact:

Don't overlook longer-term prospects.
Businesses naturally want short-term leads, because they feel a need for results now. In the search for the quick close, however, some of the most promising leads get lost.

That's unfortunate, because prospects who don't respond immediately, or who say when first contacted that they aren't interested, often represent the largest base of potential new customers. In fact, companies that focus strategically on long-term opportunities realize by far the highest lead conversion rates.

By nurturing quality leads over time, companies are able to forge deeper relationships that ultimately translate to business. Nurturing longer-term leads is especially important now, as prospects are stretching the buy cycle. Despite the temptation to focus only on dollars coming in short-term, companies should broaden their outlook to include longer-term prospects.

Use segmentation to identify top prospects.
If you're going to capitalize on leads with the most sales potential while reducing time spent on weak leads, properly identifying them through segmentation is essential. Because some market segments respond higher than others, it makes sense to identify those segments and market to them specifically.

Initial segmentation requires basic research on each prospect to weed out those that aren't a match for your offering, and to group them into related companies you'll want to target similarly. Most companies group leads by industry, annual revenue, employee headcount or similar characteristics. You can then test these groups to determine the highest responders.

Additional segmentation into short- and long-term prospects should come as you begin making contact. In initial exchanges, determine whether the decision-maker is receptive to buying now. It's important to interpret "I'm not interested" to mean "I'm not interested at this time." Any lead that fits your criteria for a high-value prospect, even those who claim not to be interested, should be kept in the prospecting loop. You never know when changing circumstances may convert "I'm not interested" into "let's talk."

Multiply touches and media.

Just as you don't want to abandon leads that claim not to be interested, you shouldn't abandon them because they don't respond to initial contact attempts. Prospects often don't respond at first because they aren't yet ready to buy or are simply focused on something else.

Studies show it can take ten to 12 touches to identify whether a prospect is sales-ready. To further increase your chances of reaching promising leads, also be sure to employ some mixture of media – quality outbound calls, voicemail messages, email and direct mail – to touch them repeatedly over time.

Multi-touch, multi-media campaigns work because they build familiarity with busy decision-makers and increase the potential of impacting them at a time when their need for a solution is high. They also increase the chance of dovetailing into a prospect's communications preferences, as some people are more email oriented, others more voicemail oriented, and others more receptive to direct mail or live conversation.

You can rise above the sluggish economy.
It's true that our business climate has changed and sales numbers are often harder to hit these days than the same time last year. But by focusing on strategic practices for identifying and reaching the best prospects, it's possible to still build revenue while streamlining costs.

About the Author
Dan McDade is Founder and President of PointClear, the prospect development company. Before McDade founded PointClear, he served as Vice President of Marketing for the direct mail firm, Jackson & Perkins, and as President of UST: The Business Marketing Group. To learn more about PointClear, go to www.pointclear.com.