Every sales organization requires three things: sales managers, salespeople, and sales leads. In principal, the formula is simple: the sales team will meet their quota if the sales manager focuses the salespeople on the right sales leads.
Most sales organizations know how to find salespeople and sales managers, leaving sales leads. There are 4 sources of sales leads: 1.) referrals, 2.) conferences and trade shows, 3.) inbound marketing and 4.) proactive sales. Each sources has its pros and cons: the key is selecting the right sources for what you sell.
For example, there are businesses where referrals are often the best or the only way to grow. These “word-of-mouth” businesses tend to offer services that are intimate, offer solutions to frequent problems, and have limited marketing resources.
However, most businesses need more than one sources of leads to maximize revenue. Not having the right combination of sources stagnates growth and increases your cost of client acquisition. Different lead sources vary in the amount of upfront investment, sophistication required, and payback period.
Most sales organizations are pretty good about investing in referrals. Referrals have the highest probability of a close, the lowest cost, and all you have to do is ask for them — learn to ask for referrals. However, referrals are limited by the number of people in your network, your ability to engage your network in two-way communication, and the frequency of the need for what you sell.
Networking and referrals are the dominion of Property & Casualty Insurance Agents, Financial Advisors, Lawyers and Accountants. Why are these groups so successful at networking and getting referrals?
Networking is best when it produces symmetric returns — you get has many referrals as you give. Achieving symmetric returns requires that you meet a high-frequency need and that you are able to maintain two-way communication with a large network.
Let’s look at an example. Referrals work great for Property & Causality Insurance Agents because everyone with a house, car, or other large assets is a potential customer. The need is very frequent; people need insurance with the purchase of every car, house or major asset, or when they want a lower rate. Since the need is frequent, insurance agents get a high return on networking — nearly everyone can provide them with a referral at least once. The return on networking is further increased because the transaction to sell property and causality insurance is less than an hour. This leaves insurance agents with a lot of time to engage in networking and two-way communication. Rethink where and why to Network.
However, networking does not provide symmetric returns if you sell a specialized product or service. For example, if you sell insulated fiberglass doors for cold-storage warehouses, networking will have low and diminishing returns, and the benefits will be asymmetric — you will give more referrals than receive. This is because the need for your solution is infrequent. Even if you only network in the Cold–Storage community, people only need new fiberglass doors every-so-often. They don’t wear out very quickly, and only so many new cold–storage warehouses are built each year.
If the number of referrals are limited, how can you grow faster?
Conferences and Trade-shows
Conferences and Trade-shows are a quick way to expand outside of your current network — especially if you want to develop a national network. Conferences and Trade-shows are straight forward. They have clear start and stops, a relatively captive audience, defined competition for attention, and defined expenses. All of this makes them a big business: exhibitors spend an estimated $24.5 billion a year on trade shows and attendees spend an estimated $44.8 billion.
While some booths can be quite elaborate, getting started is rather simple: buy a ticket, book a flight and hotel, and go pass out cards. From humble beginnings you can move on from handing out business cards to multi–story trade show booths. If you want to get a fancy booth there is help.
Conferences and Trade-shows can require a significant financial outlay. Attending a conference without a booth on average requires $2,500 per week. Exhibiting is significantly more expensive with the average square foot cost for exhibits being $22.32 and total costs of at least three times that amount. So for an average 10’x10′ booth you can expect to spend $6,696. I have also included a detailed analysis of Trade–show budgets for exhibitors, as percents of total costs:
- 24–33% Exhibit Space
- 12–33% Exhibit Design (the avg. life of a display is 5–years, the average life of graphics is 1–year)
- 19–22% Show Services (electricity, cleaning, drayage, I&D)
- 9–13% Shipping and Transportation
- 4–21% Travel and Entertainment
- 4–8% Promotion and Advertising
- 2–5% Other
However, once you have financially committed, no additional skills are required. Just meet the perquisite of being a salesperson: the ability to meet new people and interest them in what you are selling.
Conferences also provide focus attracting people with a shared interest. As long as the shared interest attracts your potential customers, conferences are an effective source for sales leads.
The problem is conferences are expensive and take a lot of time. How can you grow your sales faster without spending all of your time on the road?
Utilizing Inbound Marketing
Inbound marketing allows you to reach a broader audience at a substantially lower cost. The only problem is that it requires new sets of skills — creating and publishing valuable content. Inbound marketing attracts customers using social media, email marketing, and search engine optimization, and then uses landing pages to converting traffic into sales leads.
However, you have to have something valuable to say and the skills to say it. Not everyone can write well, design and program beautiful webpages, shoot beautiful photos, or compose engaging videos. Can you publish interesting content every week? If you can it will pay dividends because each post can attract thousands or even millions of people to pay attention to what you are selling. A good example of inbound marketing is this blog.
Inbound marketing works well if you have the solution to a specific need, and potential customers are motivated to look for solutions.
How can you grow faster? Stop being passive and get active!
All of the above methods require prospects that are actively searching for information or help. For example, referrals only work if people are talking to other people about their lives, needs and wants. Referrals, conferences and inbound marketing only work if buyers are motivated.
What if you could be proactive? What if you could sell to buyers that have the need, willingness and resources to purchase what you sell, but have not started shopping? You could sell to people before they start comparing prices and features.
For most sales organizations: proactive sales equals cold calling through thousands of complete strangers. No one wants to spend all day interrupting people that have a low probability of wanting to be sold is hell.
Who wouldn’t cringe at the thought of making 200 calls per day to get one appointment, and getting one sale a month from 4,000 calls and 20 appointments. However, the most important thing is that traditional cold calling doesn’t leave time for a balanced approach to generating sales leads. Remember that most organizations still need to ask for referrals, attend conferences and invest in inbound marketing. Few businesses can grow using only one lead source.
However, proactive sales doesn’t have to equal cold calling. To be truly proactive you need to be able to predict who has a high probability to purchase from you. You need to be able to identify the characteristics, traits and variables that indicate that someone is likely to buy from you.
Once you can predict who is likely to buy from you, you can buy lists of sales leads, or find free lists. While sales brokers might sell you a thousand or more leads, you can’t sell all all of them. You need to use predictive analytics to identify the top leads — perhaps 10 or at most 100 — that are likely to buy from you. We call this Predictive Lead Generation.
The Next Step: Predictive Lead Generation
Predictive Lead Generation works by determining the characteristics that separate those who buy from you and who doesn’t. This might sound easy; it’s not. Most sales people mistake their target clients for their best clients. Outliers standout in our minds, making it hard to realistically recognize the average — your target client. Also, who wouldn’t want more of their best clients: clients that spend more, buy more, and/or are easier to work with. Unfortunately, closing these clients is wonderful but an infrequent uncontrollable event. Most people’s best clients purchased without any real sales influence of the salesperson at all.
Your target clients should be who you already have the most of — you know how to sell to them and they are willing to buy from you. Finding and selling more target clients will allow you to develop a repeatable and scalable sales process. What salespeople and sales managers don’t want more (and more consistent) sales?
Most people’s client base resemble the following string of clients “AABBBBBBBBBBCCCDDFF”. While most people are best at closing B’s and could develop a repeatable process to close more Bs, they are focused on the A’s. Don’t get me wrong, A’s are the best clients. They spend the most and are great to work with.
However, salespeople focus on A’s not because they are the best, but because they truly believe that A’s are their target market. Most salespeople think that their average clients is or should be an A. In reality, B’s are your ideal client. Important note: pursuing new clientele or selling new products and services should be treated as an experiment, not the proven stable foundation to grow your core business. Good business is boring business.
CAN shows you who is most likely to buy from you. Predictive Lead Generation allows you to confidently invest in the right deals, knowing that at the end of the month you will meet your quota.
Would you like to learn more about Predictive Lead Generation and finding the best leads for your business?