Work out how much each lead costs you, on average, to generate. For example, take your entire spend on marketing for the year (staff/time and spend on advertising, website, etc) and divide it by 12 to get your monthly marketing spend. Now look at how many leads you get per month (if you don’t know… estimate). Now divide your monthly average spend by the average number of monthly leads. This is how much you paid to buy each lead. Often this shocks people the first time they do it, and they insist it can’t be right. It is. Now that you know how much those leads are worth, you’ll want to make sure that you’re looking after every one of them.
I often find that half the leads a company gets are just frittered away. They’re left ignored for long enough for them to go cold and then put in a pile or left in a list and never seen again. Even more common and more of a delusion is the situation where a lead is followed-up, but then no next action defined. Consequently they fall into a black hole. If you take away only one point from this, it should be:
It’s easy to think at the time of speaking to a prospect that you’ll give them a call tomorrow or next week or next month, and honestly believe it. But believe me when I say again – unless you set an actual date for the next action – ideally in your diary with a reminder – it won’t happen. Most leads are squandered this way.
The key to all of this, especially in a business with more than one person handling leads, is to operate a formal sales pipeline. This will probably need to be in a database of some kind, a CRM (Customer Relationship Management) system, or a spreadsheet at the very least. But even though you’re likely to need a CRM system, I think that it’s good to start with a simple spreadsheet. This allows you to create column headings, ie the information you will keep about each lead, in a very flexible way. Once you’ve got that working for a few months, then move it into a CRM system. These start as cheap as free and then the sky’s the limit.
Some of the information you need to keep is obvious:
Then come the pieces of information specific to the current buying interest and the current situation:
Then you need to know some information about the progress with this lead right now:
And finally the most important points:
Now I usually recommend that the first column in your pipeline spreadsheet, or the main sorting order in your CRM system, is the NEXT ACTION DATE. Basically you don’t need to do anything until this date. The whole point of operating a pipeline is to look at it and know which leads you need to follow-up on today, and do it.
If you create and operate a sales pipeline including the above information, you’ll maximise your sales, and perhaps just as importantly, your prospects will be looked after and feel that you care and are efficient.
Hopefully at least some of you have noticed a very important piece of information missing from the above? OK, I was testing you. What do you think is missing? You need to track the source of every lead, eg where they heard about you. You need this vital information so that you know which marketing is working and what to do more of and what to stop. What else would you need to record in the sales pipeline for your business?
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