Entries from December 2008
Marketing-for-Leads Guide: Step 5 – Calculate how many qualified sales leads will you need
Step 5: Determine how many qualified sales leads are needed to meet your sales revenue goals.
To calculate what you will need, consider using my “Sales Lead Calculator”.
This interactive spreadsheet was designed specifically for B2B marketers. It automatically performs a series of calculations based on information you provide about your company’s sales revenue targets, average close rate, sales price and so forth, giving you a realistic number of leads needed to meet your sales objectives.
Using the dollar figures and percentages you enter, the spreadsheet will automatically calculate the following for you:
- Revenue needed from marketing leads this fiscal year
- New customers needed this fiscal year
- Qualified leads needed
- Total inquiries needed
- Total marketing contacts you need to "touch" in order to meet your goals
- Lead-generation budget
- Lead-generation budget as a percentage of sales
- Average cost per inquiry
- Average cost per qualified lead
- Average cost per sale
- Inquiries needed per salesperson this fiscal year
- Qualified leads needed per salesperson this fiscal year
- Qualified leads needed per salesperson per month
The Sales Lead Calculator not only gives you the total number of contact touches you require to meet your sales goal, it also gives you the number of contact touches needed per quarter and per month. Why? Because contacting 1,000 people twelve times a year will get you more qualified leads than contacting 12,000 people once.
| To download the complete Marketing-for-Leads Guide as a PDF, visit B2B Marketing-for-Leads Guide. |
A final consideration about the Sales Lead Calculator is the length of time it takes to close a sale. For example, if you have a six-month sales cycle, you should aim for twice as many leads as the calculator suggests. Why? Because if it takes six months to close a sale to a lead, half the leads you will get this year will close too late to affect the current year’s sales goal.
Consider using the Sales Lead Calculator in a meeting with your top sales and finance executives.
Use it to answer questions like these:
- What lead generation budget will we need to meet our sales revenue goals?
- What impact will spending more per touch have on our lead generation budget?
- How will our average response rate affect our overall results?
- How will the numbers change if we increase our average order size?
Webinar: What’s Working NOW in Search Engine Marketing – Jan 21, 2009
If you’re looking for ways to drive more traffic to your web site– and who isn’t?– I believe this information-packed, 90-minute webinar should be of interest to you:
What’s Working NOW In Search Engine Marketing – a webinar with Mike Moran
Search tactics and strategies to be discussed include:
- How to create “spider paths” that get your web content discovered
- 4 foolproof steps to effective organic search
- How to leverage social media and search to drive more traffic
- 5 keys to on-the-money keyword targeting
- 5 no-cost/low cost ways to proliferate profitable one-way links to your site…and much more.
Plus, your questions answered.
Presenter Mike Moran will share key insights and findings on what it takes in today’s market to maximize search engine marketing results. Moran is a best-selling author of Search Engine Marketing Inc, world-class search marketing expert, former IBM Distinguished Engineer and holder of 4 search-related patents.
About the Event
Presented by Mike Moran, best-selling author of “Search Engine Marketing, Inc.”
- Date/Time/Cost: Wed., Jan. 21, 11:30 – 1:00 p.m. $99.
- Complete details and registration
Special Early-Bird Bonus
Be one of the first 50 savvy marketers to register by January 7 and you’ll receive bonuses valued at $188.95. Full details at the link below.
Don’t know if you’ll be able to attend the live event? No problem. We’ve got you covered. By the close of business on Friday, January 23 everyone who registers will receive access to a full audio-visual copy of the program. Download these files and enjoy the program as often as you like. They’re yours to keep.
Mike Moran
Marketing-for-Leads Guide: Step 4 – Define “qualified sales lead”
Step 4: Determine the definition of a "qualified sales lead" with which marketing, sales and corporate management agree.
Your goal as a marketer is to help generate sales. Although there are some steps in closing sales that are out of your control, what you can do is identify qualified sales leads up front. If marketing, management and sales all agree from the start on what a qualified lead is, there is a better chance that you will generate leads that are valuable to the salespeople. It’s important to confirm the definition, in writing, with all parties. The definition of a qualified lead is different for each company, and each must do the work to define its own meaning of a qualified sales lead.
Typical definitions include criteria such as the following:
- Does the prospect have a need or an application for your product or service?
- What is the prospect’s role in the decision-making process?
- What is the prospect’s timing for purchase or implementation?
- What is the status of the prospect’s budget?
- What is the size of the opportunity?
A prospect is a contact at a company who admits to a business problem, either latently or directly, that could be solved by a product and/or service that you are selling. Your role, as a marketer, is to give the prospect hope of solving his/her company’s problem. Here are a few examples:
Problem: The company’s current disparate computer systems require employees to perform redundant data entry, thus wasting time and reducing efficiency.
Solution: Your software product would enable single data entry.
Problem: The company’s managers suspect its truck drivers are wasting time on their routes, but they don’t know for sure.
Solution: Your global positioning system would allow management to track the location of each truck at all times.
Problem: The company relies on face-to-face meetings among employees located in various parts of the country, but it has recently slashed its travel budget. It can’t afford to send the employees to meetings that require air travel.
Solution: Your web-based conferencing service would make it possible for the company’s employees to meet "virtually" in cyberspace.
In addition to having a business problem that you can solve, qualified leads
- Have an established project in play. This is apparent if a solution task force has already been appointed or, for a small company, if the inquirer’s boss asked him/her to find a solution or make a recommendation.
- Have the money to buy a solution, or are in the process of developing a budget.
- Plan to purchase within a reasonable amount of time.
- Have negotiated access to power. In other words, they can get you in front of the appropriate final decision-maker(s) when the time is right.
In addition to defining a qualified lead, you should create a glossary of standard terms defining what your company considers to be a "suspect," a "prospect," an "inquiry," a "response," a "qualified lead," a "qualified suspect," a "qualified prospect" and so forth. Again, sales, marketing and management need to agree on the definition of each term. This will avoid confusion later.
| To download the complete guide as a PDF, visit B2B Marketing-for-Leads Guide. |
Lead scoring can be a valuable tool as you create your qualification definitions. To score a lead, assign points based on how well the prospect meets each of your lead-qualification criteria. Consider the following example:
| Funding, ready to go | 5 points |
| Budget in formulation | 3 points |
| No budget for project | 0 points |
| Is the decision-maker | 5 points |
| Is the recommender | 2 points |
| Is an influencer | 2 points |
| Has a clear need for product | 5 points |
| Plans to buy within six months | 5 points |
| Plans to buy in one year or more | 1 point |
| Plans to buy $50,000 of product | 5 points |
| Plans to buy less than $100 of product | 0 points |
To score the lead, add up all the points. Then, for example, those with 20 or more points are determined to be qualified leads; you should send them to your sales force.
Decision Makers Choose B2B Websites as a Preferred Source of Information According to New Survey
A new study by the Association of Online Publishers in the UK shows that 97 percent of business decision makers chose B2B websites as the media most used for work.
The survey was conducted online across a representative sample of 751 respondents in the UK in May 2008.
Additional findings include:
- 51 percent of business decision makers chose business websites as their preferred source of business information.
- 60 percent ranked business websites as an essential source of information in their work.
- 60 percent consider business websites as sources of information that they couldn’t get elsewhere.
- 56 percent say that B2B websites are their first choice when researching/informing business decisions.
- 55 percent rank business websites as their first choice for researching/informing purchase decisons.
- 54 percent put business websites at the top spot for gathering sector news.
70 percent of the B2B decision makers who participated in the study found that business websites offer more engaging content and advertising than other business information sources and considered them to:
- Offer instant access to information (79 percent)
- Save time (77 percent)
- Offer innovative ways to access information (74 percent)
- Allow business decision makers to interact with peers more efficiently (69 percent)
The survey further revealed that 82 percent of all business decision makers use at least one B2B digital delivery mechanism for work, rising to 91 percent among regular B2B websites users. Email alerts/newsletters are the most popular (51 percent).
More details are available here.
Marketing-for-Leads Guide: Step 3 – How much revenue needs to come from marketing’s leads?
Step 3: Determine the percentage of your company’s new business revenue that needs to come from marketing-generated leads.
This step in developing your marketing-for-leads plan focuses on determining how many leads your marketing programs need to generate so that the company can meet its sales revenue goals.
"Why Bother With a Marketing Plan? We’ve Got a Sales Team."
Some people may get involved in an old argument, "Why do we need marketing? We have a robust sales force that is capable of bringing in sales. Why bother with a complicated marketing plan?" The fact is, even with a capable, motivated sales team—which includes a combination of salespeople, distributors, resellers and reps—you are generating less sales revenue than you could be if you relied on the efforts of the marketing team to find new business opportunities. In addition, if you depend only on the sales team, your cost of selling is probably higher than it needs to be.
In any business-to-business sales situation, salespeople typically find, on their own, about 40 percent of the new business opportunities needed to meet their company’s sales revenue goal. They develop sales opportunities through referrals, additional projects from past customers, potential customers they meet at networking events and past customers who have moved to new companies.
All of that works well for generating sales up to a point. Salespeople working on their own don’t generally reach the other 60 percent of sales potential for some very good reasons:
- Salespeople’s quotas and compensation programs reward them for bringing in short-term sales—this week, this month, this quarter. Therefore, they have little incentive to work the longer-term opportunities.
- Most people generally hate the rejection that results from cold calling. Salespeople are no different. They prefer to spend time with prospects that are ready to buy now, even though in reality those buyers represent only a fraction of sales opportunities.
- Salespeople tend to spend most of their time with current customers.
So how can marketing for leads be used to identify the other 60 percent of sales opportunities and make the sales team more efficient overall? Lead-generation tactics such as direct mail, telemarketing and events are ideal for finding qualified sales leads so that salespeople can spend each sales call where it is most likely to generate revenue. Online marketing via websites that cater to your target audience is another cost-effective way to generate leads.
What is the cost of a business-to-business sales call?
The average business-to-business sales call cost $329 in 2001, according to Cahners Research. This figure is based on responses from 23,341 businesses. Additional key findings of Cahners’ study include the following facts:
- A typical business-to-business sale that exceeds $35,000 takes an average of 5.12 sales calls to close.
- Less than 20 percent of sales efforts focus on prospective new clients.
- The average number of sales calls taken by customers over the phone is 4.61 per week.
- On average, customers have only 1.81 in-person meetings per week with salespeople.
- Seventy-five percent of the companies studied say that making a sale valued at more than $35,000 requires a combination of direct and indirect sales efforts.
| To download the complete guide as a PDF, visit B2B Marketing-for-Leads Guide. |
With the cost of a business-to-business sales call rising each year, companies cannot ignore the price tag associated with calling on prospects. By using the most efficient techniques to generate leads and investing in personal sales calls only when they have a greater potential to bring you closer to a closed sale, you automatically lower the cost of sales. The role of marketing for leads is to identify and nurture leads, moving them along to a point where the cost of a personal sales call, or a series of sales calls, becomes an investment in an actual sale.
React Faster to Your Leads to Increase Your ROI
You’ve got calls to action and contact forms on your website, and perhaps you’re investing in pay-per-click ad campaigns. But how quickly do you respond to these inquiries? Speed could make a difference in your bottom line.
Recent lead response management research by MIT shows the odds of making contact with Web-based inquiries increases 100 times if attempted within five minutes.
With this in mind, consider the results of this other recent survey:
- Email Response Time: 53.2 percent of the companies in the survey responded by email, with the average email response time being around 13 hours. This translates to the next business day. The average number of attempts by these same companies to follow up by email was 1.45 per inquiry.
Does your company wait until the next business day to follow up with its inquirers? Does it give up on following up inquiries after less than two attempts to reach them? Hopefully not.
- Phone Response Time: 39.5 percent responded by phone, with the average response time of nearly 44 hours. The average number of attempts these companies made to follow up by phone was 1.14 times per inquiry. This means that only a very small percentage of these inquirers got more than a single follow up phone call.
By the way, the fastest average response time was 2 minutes and 47 seconds.
Is your company’s response time closer to 2 minutes… or 2 days?
Consider the times you tried to get information about a product or service you needed. How did you feel when it took what felt like forever to get a response to your request for contact or more information? Did it negatively impact the chance of that company making the sale? I’ll bet it did.
In the B2B world, how responsive your company is to its inquiries, or how it handles the follow up of sales leads, has a lot more impact on prospective customers’ perception of your brand than brand advertising ever will.
