“I’ll never buy another lead again,” so says a disgruntled sales person after failing to close quickly a lead he bought from a third party company. Being in the lead business, I hear this all the time. Rarely do you hear, “I’ll never advertise again.” Yet, in many cases 99% of the people who see your ad won’t buy your product or your service. (Advertising serves other purposes like branding, but for most small businesses, advertising is to produce sales.)
I once did a consulting job for a company that sold uniforms to Fire and Police depts. Their shtick was to send out catalogs every quarter and hope that 0.25% of those receiving the catalogs bought. These guys would have been happy with an incremental increase of 0.10%. Compare that to the Victoria Secret catalog that gets 11% of its catalog receivers to purchase. Uniforms are not as sexy as lingerie. But there is a huge gap between 11% and .25%. Even with such a small return on its catalog, this company was profitable.
In the lead business, the standard is raised even higher. A company will typically pay a higher cost for a lead campaign than an advertising campaign. Lead Campaigns are a more targeted approach rather than the rapid fire shot gunning of advertising. Or the lead campaign is the residue or the results of an advertising campaign.
A good lead campaign should be bringing the buyer and seller together for a discussion of services. You have to keep in mind that leads are not deals. A good lead campaign may only close 5% to 25% of the leads purchased. The percentages vary according to the industry. By comparison, on average only 2% to 3% of the clicks in a Google Merchant Cash Advance PPC campaign convert to sales. A reputable lead generation company can provide better averages than Google.
Where I see most companies make a mistake in purchasing leads is that they focus on price rather than asking the lead company what their definition of a lead is. You can call Info USA and the sales guy or gal will invariably tell you that their company sells leads. What they are really selling you are contacts- a name and the businesses contact information. Contacts are not leads. The merchant has no intent to buy.
My company has a simple definition of a lead.
“A merchant, who is in the market to buy a product or a service, and is somewhere along the buying cycle and is willing to discuss with vendor(s).”
We use “merchant” because we sell B2B leads, like Merchant Cash Advance and Credit Card Processing leads.
The real key phrase and if you are in sales please pay particular attention is “somewhere along the buying cycle and is willing to discuss with vendor(s).” If you think of a buying cycle like a clock, 1 O’clock represents a merchant who has just entered the market and is interested in purchasing the product or service. 11 O’clock represents a merchant who needs the product or service ASAP. He’s opening his new business on Monday and needs that credit card machine up and running. With all leads, a gap emerges between the time the merchant enters the market and when he purchases.
This sales-marketing gap causes the greatest amount of friction and frustration between sales and marketing. (It does not matter whether the marketing team is in house or third party). The gap is created because each department has separate goals. Marketing is looking for interested merchants with intent to purchase. Sales is looking for deals that close quickly.
The sales team wants the 11 o’clock leads. These leads close quickly and there is not much effort to be expended. Sales hates the 1 o’clock, 2 o’clock, 3 o’clock type leads. The buying cycle for these leads is much longer 1, 3 or even 6 months. These leads require more patience and more effort to close.
From the marketing company’s perspective, both the 1 O’clock and the 11 O’clock leads are equal. The merchant filled out the online form, he met all the requirements, and he confirmed his interest with the qualifier. Obviously, there is a definite intent to purchase. The question remaining is when? Will he buy today or will he buy tomorrow or six months from now?
A good salesperson does have some influence on the buying cycle. Certain inducements, incentives and deadlines may compel the buyer to make his purchase earlier than he anticipated. The real key, if you want to close more deals, is sound lead management where you can remain relevant with the buyer throughout the buying cycle without being intrusive and without expending a ton of time and effort.
Part II – How to overcome the marketing-sales gap and new technologies to help you close more deals with minimal effort.