When customers hold their hands up
by Troy Harrison
I’ve talked a lot about prospecting (outbound lead generation), and inbound lead generation is a huge subject in any industry. Inbound lead generation, of course, used to be much different and less frequent, but with technology, it’s a big subject and a big business.
What isn’t spoken about much is what happens to the lead after it comes in. Many times, incoming leads are either mishandled or not handled at all, and then the marketing department gets blamed because “the leads are weak.” Make no mistake – anytime someone reaches out to contact YOU, they plan on buying SOMETHING from SOMEONE. Whether that’s you – or whether it should be you – depends on how you handle the lead.
The mistake that is made in analyzing lead performance is that, typically, only one number is reviewed for “lead conversion rate,” and that’s the ratio of incoming leads to sales. So, if one lead out of 25 incoming leads turns into a sale, that’s a 1:25 ratio. However, like anything else in sales, the intermediate steps tell the story. Here are some key factors in your conversion rate:
1) Lead response time: It’s crucial that an incoming lead is responded to quickly. “Quickly” means different things to different people, but a Boston University study several years ago pegged the “magic window” at 30 minutes. What they found is that, if a lead is responded to with a personal phone call within 30 minutes of receipt, it has 20 times the chance of turning into a sale as one responded to 24 hours or more after receipt. Think about that for a moment. A potential customer will never be more interested in initiating a sales conversation than they are at the moment that they fill out your “contact me” form, so why not take advantage of that? It works. With the tech we have at our fingertips with our smartphones, there’s really no reason that a lead should take much longer than 30 minutes to respond to. I’ve even seen this anecdotally – when I get a lead coming in, I contact them with a call at the earliest opportunity (immediately if I am able). They are shocked and pleased to get that type of response – and my lead conversion rates are strong. It will work for you, too.
2) Lead response quality: Coupled with the above point, lead response quality is huge. If your “contact form” is like most, after they fill out the form, they get redirected to a screen thanking them for reaching out. Maybe your automation sends them a generic “someone will be in touch” email. That’s all well and good, but all too often, no one actually gets in touch. Note that the Boston University study depended on a personal phone call, and your sales process should, too. I was talking to a business owner recently who bemoaned the fact that, at a recent trade show, his company received 40 new leads, but only converted two into orders. Upon further questioning, he said that his salespeople simply responded with an email after returning from the show and that they waited on the customer to re-initiate contact. He didn’t have stats on how many did so, but I’m guessing less than half. A personal phone call, done quickly, is key to lead conversion. If your salespeople don’t want to do this, find new salespeople.
3) Where in the buying process you are contacted: Your entry into the customer’s buying process is crucial. Are they getting ahold of you to learn about your product or to discover information? That’s good. Do they think that they have all the necessary info, and just want you to give them a price? That’s less good. Are they just reaching out to you to “keep the competition honest?” That’s worse. This is information you need to know – and one reason, in my opinion, that salespeople don’t treat incoming leads with high importance is that they assume the negative. Don’t. Teach your salespeople that every incoming lead is a high potential opportunity, and make it part of your sales culture.
4) Shortcutting the sales process: Closely related to the above point is that there is a temptation to shortcut the process, particularly the Discovery phase. Doing a good discovery is an investment of a lot of time and work – but it’s also the most important phase in selling. 80% of your chance to win or lose the sale depends on the questions you ask, and if you don’t ask very many questions (because you assume knowledge on the part of the customer that may or may not exist), you are costing yourself an opportunity. Worse, you might sell the customer the wrong thing and create a bad reputation for yourself.
Here are the key metrics you should use to evaluate your incoming lead program:
- Time elapsed from lead receipt to initial personal contact
- Ratio of incoming leads to Discovery appointments
- Discovery appointments resulting in Presentations
- Presentations resulting in Proposals
- Proposals resulting in Sales
- Sales to repeat customers
Even if you don’t get many incoming leads, it’s important to have a good program for handling them, and to make it part of your sales culture. Don’t rely on sales automation programs; they’re great and all, but they are no substitute for personal selling on the part of you and your salespeople.
Troy Harrison is the author of “Sell Like You Mean It!”, “The Pocket Sales Manager,” and a speaker, consultant, and sales navigator. He helps companies build more profitable and productive sales forces. To schedule a free 45-minute Sales Strategy Review, call 913-645-3603 or e-mail Troy@TroyHarrison.com.
INDUSTRIAL SUPPLY MAGAZINE
The November/December issue of Industrial Supply magazine features an in-depth cover story about Kimball Midwest. Plus, we're featuring articles by contributing writers Dirk Beveridge, Frank Hurtte, and Mike Marks, as well as interviews with numerous product and distribution industry experts.
