Sales Lead Management Today

How does Occam’s Razor Apply to Increasing Sales?

Recently a company president asked, “What is the fastest way to increase sales?”  I countered by asking her if she had heard of Occam’s Razor?    Of course she said, which invited me to go to the simplest answer, but first, a review of Occam’s Razor.

Occam’s Razor, attributed to William Occam, the 14th century theologian and logician Franciscan friar states that when competing hypotheses are equal in other respects, the principle recommends selection of the hypothesis that introduces the fewest assumptions and postulates the fewest entities while still sufficiently answering the question.   Simply stated, the simplest idea tends to be the best choice.   Occam's razor is phrased as pluralitas non est ponenda sine necessitate ("plurality should not be posited without necessity")i

In keeping with my thought to give her the simplest and fastest way to increase sales, my answer to the company president was that all inquiries and sales leads must be followed-up 100%.  The average follow-up varies between 5-25% for most sales organizations.   Ergo, follow-up 100% of the sales inquires and if you have been average up to this point you will get in front of 75% more buyers and close more sales.

Yes, research has shown that nurturing programs can increase the ROI for lead generation programs by 2X-3X.  If marketing jumps in with marketing automation (email and or telemarketing nurturing),in my opinion,  these count as follow-up. 

Having a CRM and Marketing Automation program are key components, no argument.  But the simplest, fastest, surest way to increase sales lies in the hands of sales management and the salespeople.  If 100% follow-up is enforced and not an option, sales will increase in 90-120 days.ii

“100% follow-up Rule:  Corporations that have a 100% inquiry follow-up policy will sell more that those that don’t.” iii

So, once again I am in agreement with William Occam, the simplest answer is usually the best.   I knew there was something about those Francisans I liked!

 

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  i. Wikipedia, this explanation is taken virtually verbatim from the Wikipedia definition.

  ii. Obermayer’s opinion is that, “Salespeople assume every corporate rule, procedure, request or dictate is optional until it is repeated at least three times over two months.”

  iii. James Obermayer, Managing Sales Leads: Turning Cold Prospects Into Hot Customers, (Mason, Ohio, Textere an imprint of Thomson/South-Western, 2007), and Racom Books, Page 15.  To order go to Racom.

Maximizing the Value of Your Lead Generation Dollars

Pressures are mounting on companies to maximize marketing ROI. In other words, the money spent on lead generation should show a strong return related to sales revenue. This money should be evaluated so it is continually applied to the highest yielding program(s). To do this, marketers must gain visibility into individual programs to determine the number and quality of leads they generate, and how many ultimately transform into closed sales.

But the issue doesn’t stop there. Increasing the value of lead generation dollars also means ensuring the leads being handed to costly sales resources are indeed “sales ready.” According to CSO Insights’ Sales Performance Optimization Study (2008), salespeople are generating 50% of their own leads. That’s an expensive proposition and raises the question – what is marketing doing?

It’s clear marketers must find ways to track and manage leads through the lead life cycle. This requires the ability to evaluate leads, determine when leads are “sales ready,” and when they are not. Additionally, marketers must take responsibility to nurture those leads that aren’t “sales ready” to maximize the value of what they’ve spent on lead generation dollars.

Industry benchmarks suggest that leads must be continuously “touched” before they close. About 80% of leads close after 5 contacts and sometimes it’s closer to 9-11 touches. If you’re assuming the value of lead generation dollars comes from one email blast or a month of AdWords, you’re not on the right track to understanding how to increase value. Nurturing leads (through multiple touches) as part of lead generation programs will increase the return of dollars.



Lisa Cramer is president and co-founder of LeadLife Solutions, a provider of on-demand lead management software that generates, scores, and nurtures leads for B2B marketers. For more information on lead management or best practices call 1-800-680-6292 or email [email protected].

Why Direct Marketing Causes Executives to Lose Their Marbles

Many marketers, reluctant to miss any avenue of opportunity, define their target as broadly as possible and in so doing miss the chance to convincingly address the most potent prospects. A typical example is a company that perceives its target market to be the Fortune 1,000.  That group is actually comprised of several thousand revenue reporting companies – some with centralized and some with de-centralized decision making.  While is sounds contradictory, I recommend that companies identify the largest, most targeted markets to make sure that they have a tightly defined universe, but with no gaps and then build contacts and contact information around those targets for multi-touch, multi-media and multi-cycle prospect development programs (covered in detail later in this book).

Companies that more quickly see the value proposition of a vendor’s product, whether due to immediate business pains or because they are looking to enhance their own capabilities, respond at higher levels than others.  So it makes sense to identify segments of the market and market to them specifically. Others, though still qualified, may be more hesitant and require different touch strategies and messaging before their sales potential can mature. They are still good sources of revenue, though, and if left behind in the rush to close will most likely end up directing that revenue to a competitor. Recognizing and nurturing all prospect potential is crucial to pipeline development, future revenue and market share.

By applying market intelligence and finely-defined segmentation strategies, I have been successful in increasing sales performance while actually reducing marketing costs.

The most misunderstood aspects of direct marketing involve lists and databases. Executives often feel that lists are a waste of their time; and database issues seem so complex that execs are willing to pay exorbitant sums to the “experts” who deal with them. Big mistakes!

Over 60% of the value of any direct marketing campaign is driven by list and database issues. To understand why, think about marbles.

LIST BASICS

For most business-to-business marketers there are a number of list choices. Response lists, subscriber lists, controlled circulation publications, compiled files. They each have advantages and disadvantages, but it is important to know that even the best lists are rarely more than 50% accurate.

WHAT MARBLES COST

Ever play marbles? Remember that different types of marbles had different values.

Machine Made Marble Price List

• Swirls - $.25
• Stripes - $1.25
• Flecks - $1.25
• Loops - $1.25
• Spirals - $1.25
• Agates - $5.00

What if I told you that your direct marketing campaigns are run as though you were playing marbles without knowing the difference between a Swirl and a Stripe? Worse, what if improving results was as simple as separating your Swirls from your Agates?

While most executives would not dream of buying a jar of marbles without knowing exactly what was inside, they approve the purchase of lists that contain the equivalent of Swirls, Loops and Agates, often without knowing exactly what they are getting.

THE NUMBERS

Suppose you have a mason jar filled with the following:

100 Swirls - $25.00 100 Flecks - $125.00 100 Agates - $500.00
 

The average value of each marble in the jar is $2.17. Reach in and grab an Agate for $2.17 and you have cause for celebration. Pay $2.17 for a Swirl and you will feel taken.

When you execute a direct marketing program you make essentially the same choice. You mail, call or otherwise contact individuals based on their potential value to you as a customer. Some names are worth very little (let’s compare these names to Swirls at $.25), some are average in value (say the value of a Fleck at $1.25) and some are high value names (such as an Agate for $5.00).

Is it possible to market to just the high value names? Yes! It is possible to market to the “Agates” and “Flecks”, and skip the “Swirls”, in your market with just a little effort and very little expense.

 

Here is how:

SIMPLE MARKET SEGMENTATION

Just as you can see the difference between a Swirl and an Agate when you look into the jar of marbles, it is possible to calculate the value of names you direct market to in advance by doing a bit of testing prior to rolling out campaigns.

The secret is segmentation. Segmentation breaks large universes of names (multiple lists and/or multiple list segments) into smaller, homogeneous “cubes” or layers of like individuals or companies. Once these “cubes” are identified, response from each “cube” can be separately analyzed. Some differentiating characteristics to use when segmenting names into “cubes” are geography, revenue, number of employees, growth percentages, SIC codes, decision-making levels and/or other data that is commonly available. You should also compare each list or list segment to your customer list and the customers of your competitors to determine how many customers match your prospect lists. The higher the match you find, the better the list.

If you pay $5 for a marble you expect to own an Agate. Think of lists the same way. Find the Agates, and mail more of them than Swirls, and you will enjoy a higher ROI every time. With segmentation, a list is split into distinct strata of names “cubed” by similarities rather than a random “jar of marbles”. Just picture your Swirls, Spirals and Agates all segmented by type and you have the right picture.

The following will help you win all of the marbles (without losing yours): http://www.pointclear.com/resources/