Ten Critical Success Factors to Turn Leads into Customers

"…90% of marketing-generated leads are not acted upon by sales."

By Jim LaBelleLEADTRACK™

The business adage of "nothing happens until somebody makes a sale" is certainly true but we all know that a great deal of work must be done before that sale is made. Our sales reps need to work as many as 10, 15 or 20 leads in order make a single sale. It is incumbent on management and the marketing department specifically, to make sure the sales reps get as many quality leads as soon as possible to help improve the numbers game. But simply generating leads is not enough.

To be able to turn leads into customers a number of things must take place. Based on what we have learned from more than 25 years of helping companies optimize their lead management programs we offer the following insight summarized in Ten Critical Success Factors (CSF).

10 steps

1. Management Commitment – The boss must be aware and care.
2. Accountability – Put someone in charge and empower them.
3. Close the loop – With the prospect and sales reps.
4. Process – You need a system and must be organized.
5. Simplify – If it's too complicated it won't be used.
6. Fulfillment – A good process will pay for itself.
7. Reporting – Inspect what you expect.
8. Speed – Leads age quickly and die if unattended.
9. Don't build a system when you can buy a better one for less.
10. ROI – It is imperative that you look at the ROI for every activity.

1. Management Commitment

"The difference between a successful CRM system and a huge waste of money is a leader who motivates the rest." Source: Destination CRM, CRM Magazine

A company can have a great marketing department, terrific sales people and the most creative ad agency money can buy but if senior management is not serious about measuring the success of every ad they place or event they manage, precious marketing dollars are wasted. The best way to get management interested is to identify the true cost of lead generation.

You must identify all costs related to:

• Creating and placing advertising campaigns.
• Exhibiting at and staffing trade shows.
• Production and distribution of collateral.
• Telemarketing to handle leads.
• Website development and maintenance.

2. Accountability

"18% of prospects never receive the materials they had requested."

Who's in charge? Sadly when it comes to sales leads either no one is, or everyone is. Put someone in charge of lead management and empower them to challenge what is going on. Are the leads being entered, assigned and distributed? Are requested materials (brochures, samples, documents) being distributed to prospects? Give them tools to monitor what is happening and to report to the organization the relative performance of each component of lead management. This performance must then be included in the rewards system.

3. Closing the Loop

"90% of marketing-generated leads are not acted upon by sales"

Sales people are driven by how to earn the most by doing the least. They love "low hanging fruit" and will first grab the ripe leads that are ready to fall. If this gets them over quota and makes the house payment they may be content. But how many leads that need just a little bit of nurturing and follow up were wasted? Find a way to get feed back from the field rep and then cultivate all of the other leads. Use a lead management system to maintain contact with the prospect providing them with all of the necessary information to make them a warmer lead.

4. Process

"Use the Goldilocks approach. Some CRM tools are too big; others too small. Find what is right for your business." Source: Destination CRM, CRM Magazine

Just collecting business cards, reader service cards, website inquiries or telemarketing leads is not enough. You must have a process to capture, assign,/ distribute, and fulfill every lead. How will you assign the lead and get the lead detail to the rep responsible for making the call? How will you get the information requested to the prospect?

Depending on the complexity of the organization or product the solution can be as simple as an Excel spread sheet or as complex as an enterprise wide customer relationship management system that ties your lead program to accounting, payroll, production, logistics and service. In most cases the optimum solution is somewhere in between.

You need more than a spreadsheet to have control of what is going on but you probably don't need to invest a fortune and take years to get what you need. There are a number of sophisticated off the shelf solutions both hosted (ASP) for web access or installed on the lead manager's desktop or server

5. Simplify

"Don't buy what you don't need…People don't like change as it is; keeping things simple only makes implementation easier."Source: Destination CRM, CRM Magazine

Keep it simple. If you make the lead management and follow up process too hard you will not maximize the opportunities. Sales people or distributors should not become administrators having to deal with complex software or forms. If it is too difficult to work with they simply won't do it or will find a way to short cut the complexities. You must develop a straight forward process to assign, distribute and update leads in a timely manner.

6. Fulfillment

"43% of prospective buyers received requested materials after they had already made a decision." Source: U of Mass Center for Marketing Commun.

This is where a good process can pay for itself and the cost of a lead management system. Automated campaign execution and lead management software will allow you to deliver timely, relevant, consistent communications to prospects or customers
via email, direct mail, telemarketing or other communication channels. Replacing PDF formatted brochures as an email attachment for mailed brochure will save your company thousands.

7. Reporting

Leads age – make sure you know if your leads are blooming, ripe or dead. Inspect what you expect. Beyond just making a person responsible for distributing and assigning leads you need to make those who receive the leads accountable. Lead aging reports, viable and non viable lead reports, campaign effectiveness reports are all critical to determining what is happening with leads, what programs work and what programs need to be improved.

8. Speed

When service is perceived to be immediate, 95% of customers will do business with you again. Source: US Gov Buyer Survey

In lead management Speed is of the Essence. Leads that aren't followed up never turn into sales and the greater the time lapse in contacting a prospect, the less effective that follow up tends to be.

9. Why build it when you can buy it?

"Do what you do best, and let others do the rest." Source: John Arend, President of Maverick Marketing

As good as your IT department may be at providing support for your computers, phones and networks it is unlikely they have an intimate knowledge of campaign management software. The math is easy – estimate how many man hours it will take to develop an in house program, apply a loaded hourly rate – then triple it! You will be money ahead with much more sophisticated tools if you select a program developed and refined by lead management experts.

10. ROI

"If it's not worth measuring, it's not worth doing."

Whether it is development and placement of ad campaigns, the true cost of trade shows or, it is imperative that you look at the Return on Investment for every activity. A good source for this information is your accounting department. They are probably already looking at the costs and wonder why no one else is.

Don't forget to look at opportunity costs:

• What is the real cost in lost revenue of not following up on a lead?
• What is the cost of your company image when a lead is not worked?
• How much are you spending today to manually manage, distribute, follow up and fulfill leads?
• What is the cost to print brochures?
• What is the cost to mail brochures?

Summary

All companies invest heavily in programs to generate leads unfortunately 90% of these leads never get worked. All leads are not created equal. Some definitely have more potential than others but it is impossible to determine which leads are red hot if someone doesn't work the leads.

Your company can make dramatic improvement in your lead management program if you take the time to consider these ten critical success factors. They will help you to turn sales leads into customers.

© 2006 LEADTRACK Software. All rights reserved. For your use and information, not to be copied or distributed without consent of LEADTRACK Software. For a lead management analysis and information on LEADTRACK Software products and services contact [email protected] or call 800-294-7716.