I hear a lot of this, “I wish my lead provider would give me better leads.” And, a fair amount of this, “Customers don’t work the leads the way they should.” However, so often that is all it amounts to–a bunch of under the breathe quibbling.
There are some basic things lead sellers and lead buyers should be exchanging to maximize everyone’s interests.
If I am a sales manager I am consumed with getting the maximum production at the least cost. That means I am focused on four guiding principles that were around and perfected in the industrial age:
- minimizing inventory
- minimizing labor
- minimizing defects
- maximizing production
For clarity, let’s convert that to sales lingo:
- minimize leads (lead providers hate to hear this, but it helps them too)
- minimize sales people
- minimize fall-out
- maximize closed deals
Using this framework we can build a reporting system that quickly focuses me on optimizing my sales performance and gives the right metrics to feed my lead providers to help me succeed.
What I Need to Know
Understanding the nuances of your sales force is critical to operating profitably with online lead generation. Tapping into the key metrics of your sales management process can put you head and shoulders above your competitors, making money when others are scratching their heads in disbelief.
1. How efficiently am I making contact? This simple question actually encompasses a couple of metrics many studies reinforce as key driver of sales conversion.
First, how efficient (fast) am I to my first attempt on a newly received lead. Anything outside of 5-10 minutes will reduce contact rate by as much as 75%.
Second, how many attempts does it take for me to make contact. Assuming you are lightening on speed to contact, this metrics is a key indicator of marketing quality and efficacy on the front-end. Are they expecting, anticipating my call?
2. How long is my sales cycle? This is critical to forecasting sales production. Although there is no right answer here it certainly effects your sale management, true ROI, and lead buying. This metric will help you get the right marketing mix. With a good database marketing, lead nurturing, and lead management, you can optimize trade-offs of lead price and quality to maximize through-put on a budget.
3. How many leads does it take to get an application? This is a fundamental building block to your cost per acquisition. It is also a basic indicator of marketing quality. I have long held that application rate and cost per application is a better measure of lead provider value than closing rates and cost per sale. Getting a customer to talk to you and consider an order or product is indicative of a compelling marketing campaign. Getting that customer to send you money is all about sales, product, and service.
4. How many applications does it take me to get a sale? See number 3. It is not necessarily an indication of lead source quality or value, but it is certainly a critical business metric. If you have a large fall-out rate you need to fix something in the market, the product, or your sales team.
What My Lead Provider Needs to Know
Here is the second secret to making lots of money with online leads. Good communication with your lead provider. Remember you are outsourcing your marketing department in this model, which can be very profitable–assuming you communicate with them like your own internal marketing department.
1. What leads do I have the highest contact rate? This is a great metric for lead providers with a capability to optimize their creative and media buying. Your contact rate is indicative of their effectiveness at meeting and setting consumer expectations. If you are making contact that means they are generating an earnest customer inquiry.
2. What leads do I have the highest application and close rate? Every sales person, team, and organization acquires a sweet spot. Sometimes it is experience, expertise, product, or market. Regardless, it is working and your lead provider should know about it instantly. If you are closing deals on a particular segment of leads that is what a good lead provider wants to feed you as much as they can. That makes a happy consumer and a happy lead client–see LendingTree secret.
3. What leads do I close the fastest? We are going to build to a theme here. A good lead provider wants to maximize your successes and minimize your failures. Tell them what you are closing the most and the fastest. This is making your sales more profitable and giving them a more stable lead buyer. It also gives them additional insight into creative and media that is performing the best, again improving their performance to you.
4. What leads do I fail on the most? This lead tracking can have a double benefit if you share. It doesn’t matter if this failure is from false information, deceptive advertising, over-sold leads, poor product fit, slow follow-up, protracted sales cycle, poor sales technique, poor lead management–if you share the data you have a partner in fixing the failure. Lead providers can control their practices and see the best in the business work leads. Used as a marketing and sales consultant they can improve their performance and give you insights on lead management best practices that work on their leads.
—
If you have news, opinions, tips on the lead generation market I would love to hear them. Comment on Lead Marketwatch, email Bill Rice, or follow me on Twitter.
(photo credit: siegel jackie)
