Cost cutting was the theme of 2009. For 2010, there has been a shift to top-line revenue growth which is vital to sustained long-term success for middle market companies. Lead generation is a challenging piece of the revenue-building process in any type of economy.
Lead generation is a deliberate and organized process of attracting and qualifying potential customers who have shown interest in buying your product. It breaks down to three key steps — identify prospects, qualify and capture information and close the sale.
“Done right, lead generation will reduce sales costs, increase the closing ratio, reduce the time to close a sale, and ultimately increase company revenue,” according to Christopher Ryan, president of Fusion Marketing Partners. “The Internet has had a significant impact on lead generation. Prospects can self-qualify and become educated about your products via a company’s Web site prior to dealing with a sales person.”
Successful sales organizations used to put a great deal of money and effort into chasing potential customers and pushing them to buy — often referred to as a push strategy. That changed to a more balanced approach adding a pull strategy, where customers come to you when they are interested and ready to buy. Social media, the Internet and more sophisticated prospect capture and nurture programs are helping companies pull in more customers rather than having to chase them down.
The key is recognizing how customers buy your products and matching sales and marketing strategies to specific customer buying habits. What kind of information do they want? How to they want it presented? Who makes the buying decision? What motivates and influences the decision?
Bernie Schneider, president of InfoPros discovered that customers were inclined to search for their type of products via the Internet. This gave him the confidence to switch to a 100 percent pull strategy.
“About two years ago we decided to move to an inbound sales strategy based entirely on Google ads,” Schneider said. “We learned we needed less expensive sales people, because the leads generated were already somewhat interested in our services and had educated themselves. The sales people just needed to reinforce interest, answer questions and close the sale rather than spend time trying to identify the decision maker.”
As a result, cost of sales dropped to 6 percent vs. 12 percent and lead flow increase at the same time. The proposal win rate went from 20 percent to 49 percent and the sales cycle went from six months to two months. It took a lot of experimenting to crack the Google key words code and make sure they had a great elevator pitch to quickly capture prospects’ attention when they came to the Web site.
“We learned that prospects will only look at three to four Web pages. This required spending time honing our message to hook them quickly,” Schneider added.
A 100 percent pull strategy won’t work for everyone. It all depends on your business model and how the customers buy.
Pikes Peak Cargo Secure, Inc. relies more on an outbound strategy for lead generation. The company sells proprietary cargo related products exclusively to the military. They understood the best way to generate leads was to use their own products to cross market and up-sell by putting company contact information on all products sent into the field.
“Our customers are deployed to military bases including Afghanistan and Iraq. They don’t have funds available until they are on the ground. At that point the only way to reach them is via e-mail. We try to stay top of mind so when prospects need something they know how to reach us,” according to Brad Brakel, vice president of business development for the company.
Brakel says the keys to success have been following up on leads and diligently keeping his database clean with up-to-date customer data.
“Companies need both a push and pull strategy to meet sales goals. But what makes it work is good quality prospect and customer data,” said Laura McGuire, CEO and co-founder of SmartTracks.
Quality customer data is the foundation of any effective marketing machine. It is extremely expensive to bring in cold customers. Data-driven communication with prospects makes any type of sales strategy much more effective. A multi-layered data-driven marketing approach that is personalized to the customer based on information you have collected can make response rates double.
“Anytime you can make sales material feel like a one-on-one custom piece, even though it may be one-to-many, you have a much greater chance of connecting with the prospect in a personal way,” McGuire said.
It boils down to staying in touch with the market and potential customers to keep the sales approach and messages current and impactful. But, don’t lose sight of your company’s business model and what will work in your specific situation cautions David Lee, president of Strategic Perspectives.
“Don’t expect some other company’s ideas and success to necessarily work in your own company. Stop and think how it applies to you and then tailor the idea to your own business, market, customer and product.”
Ann Snortland, principal of Snortland Communications, www.snortcomm.com, is the spokesperson for the Peak Venture Group Middle-Market Entrepreneurs. She can be reached at firstname.lastname@example.org.