Your organization invests a great deal of financial, human and technological resources into sales and marketing – so improving performance can have a significant impact on your success. Yet when conversion rates fall and it looks like hitting your sales goals is more and more unlikely, most will turn to deep discounts in order to ‘improve conversion rates’.
So I offer a few tips for improving lead conversion without dropping your prices and margins. And to give you some perspective as to the impact on your firm, here’s an example of what these tips can deliver in terms of results.
A university was able to increase its conversion rates by 10% increase – which generated 80 additional students that would spend, on average, $10,000 in tuition and fees during their first year at school. That’s $800,000 in incremental revenue just from tightening up processes and becoming a little more efficient!
So here are a few tips for improving performance…
Clear, consistent definition of ‘lead’. We all know about the battle between sales and marketing over lead quantity and quality – so take steps to end the fighting and get them working together on a clear definition of what a qualified lead is and how that qualifying information will be gathered.
According to the Gartner Group, only 30% of the leads distributed to sales representatives receive the appropriate follow-up because they don’t have all the information needed to distinguish a promising lead from a bad one.
Assume you spend $100 to generate an inquiry and you generate 1,000 per month – that’s a $100,000 investment. Now imagine that $50,000 of that investment is being ignored.
Now imagine that your sales and marketing teams have agreed to a clear, concise definition of ‘qualified lead’. And that when those leads are delivered to sales, they include the supporting information sales needs to realize that they need to contact each and every lead! This should play a large role in producing a higher conversion rate with your current resources.
Focus on those leads ready to buy today. Your sales team is evaluated and compensated on immediate performance. Hit your targets today, keep your job tomorrow.
Yet most organizations ask them to do almost anything BUT sell. They provide them 100 new leads and ask the sales person to hunt through the pile and find buyers – so let’s say they find 5 or 10 out of 100 new leads – that’s a 90% to 95% failure rate. Now who likes to come to work and fail all the time?
Research from Aberdeen Group, Gartner Group, B2B Magazine, Chilton, Reed Elsevier, and Cahners tell us that only 20% of all leads turn into an order within six months – and that 67% of all leads take over 12 months to turn into an order.
A simple lead prioritization process can help focus your sales team on the 20% that will be buying today – and the most common approach to prioritizing leads is BANT.
- Budget: Does the person control the funds necessary to acquire your products and services?
- Authority: Does the person have the authority to spend those funds and acquire your products and services?
- Need: Does the individual have a need that your products and services solve?
- Time Frame: Are they ready to buy now or later?
If you can use these questions to determine whether or not to provide the lead to your sales team, you should see more of your leads being contacted by sales – and that will also lead to higher conversion rates in the near and long-term.
Positioning for Future Sales – Nurturing Programs. When 67% of all leads take more than 12 months to place an order, you need to use resources that are less expensive to develop and maintain a relationship with the individual so that your organization is top of mind when the individual is ready to buy.
The dialogue must be relevant and provide the leas with information that strengthens their belief that you offer them the best solution for their needs. And, the dialogue needs to provide you with information that [a] helps you monitor their likelihood to buy so you know when to bring in the sales team to close the deal, and [b] helps you determine if the lead’s needs have changed to the point where a different solution is required. (Yes, that may mean they need something you don’t offer – and if that’s the case, recommend a better solution. But that also means your resources can focus on stronger opportunities for sales! )
A successful nurturing program will map out contact dates/timing as well as topics to discuss and information to gather in order to validate the potential of the lead. I have designed programs that have been 2-years in length and, based on the leads actions (or inactions) moved from multiple contacts per month (email, direct mail and telephone) to quarterly contacts (email, direct mail, telephone).
A little something extra – keeping communications relevant and timely. I wanted to emphasize this because it can easily become a problem for an organization.
Here’s my example – I recently contacted a company about an advertised product. The information that was sent to me answered my questions (the product didn’t do what I needed it to do) and also provided me with an overview of several other products under the “Here’s what people that purchased Product A also purchased”. None of the products were of interest but nice try to sell me something.
Since my first encounter with the company, I have received 2 to 3 phone calls and emails per week from the company. They have stopped being about the product that I originally contacted them about and have turned into general sales fliers with all of their current sales. Whenever I do speak with the sales rep, I tell him I have no interest and that there is no need to call. Then within a week or two, I get a call from the new rep that inherited my contact information – either ignoring the contact history notes or without those notes telling him/her that I am not interested.
The point here is this – the information they are forcing on me is relevant to them, not me. And the contact timing is not efficient or effective, just costly. I should have been relegated to a lower frequency of contact and they should be asking me about why I didn’t like their product and if I bought someone else’s product (I did and I would be happy to share why – which could help them improve their product.)
And that leaves me with this final suggestion for improving your lead conversion – learn from your failures. If someone buys from the competition, ask them why and ask them how that decision is working out for them over time. It can help you identify product modifications that will also improve lead conversion!
