There is no simpler and faster strategy to grow your sales than to effectively follow-up on 100% of your sales leads. Great sales lead follow-up can be the engine of sales growth. I have worked with companies and salespeople that have doubled their sales in just a few short years merely by changing their procedures for following up on their sales leads. This isn’t a difficult task. The question is: what’s holding you back?
Various studies have found that among companies of all sizes and industries, approximately 50% of sales leads are not followed up on. One prominent expert on sales leads, Ken Krogue, President of Insidesales.com, says that studies conducted by his company show that 73% of sales leads are never contacted by a salesperson.
Consider for a moment that nearly $250 billion (yes, that is billion with a B) are spent each year on traditional measured media and new media to create buyer interest in products and services. If 50% of the sales leads generated by those dollars are deemed unworthy of follow-up by sales teams then that means that $125 billion in marketing expenditures are essentially flushed down the tubes each year due to sales indifference.
I’ve never understood this call reticence. You have a choice. You can generate qualified sales opportunities by talking with people who have reached out and expressed an interest in talking to you about your product. Or, you can make cold calls to people who haven’t proactively reached out and have no developed interest in talking to you.
Here is a simple illustration of the power of responsive follow-up to 100% of your leads.
Let’s make some assumptions about a fictional company, Smythe Industries:
The Average Selling Price (ASP) of their typical customer order is $20,000.
Their sales team:
- Receives 20 inbound sales leads per week.
- Follows up on 50% (10) of those leads.
- Converts 50% (5) of their followed-up sales leads into qualified prospects.
- Converts 50% (2.5) of those qualified prospects into orders.
- In sum, they’re converting 12.5% of their leads into orders and closing 2.5 orders per week out of every 20 leads and winning $50,000 in new business.
Now, let’s see what would happen if Smythe’s sales team maintained all of their 12.5% conversion rate but followed up 100% of their sales leads (instead of 50%):
- Receives 20 inbound sales leads per week.
- Follows up on 100% (20) of those leads.
- Converts 50% (10) of their followed-up sales leads into qualified prospects.
- Converts 50% (5) of those qualified prospects into orders.
- In sum, they’re converting 12.5% of their leads into orders and closing 5 orders out of every 20 leads and winning $100,000 in new business.
The math is compelling. Without a substantial change in your overall selling process you can substantially grow you sales. Therefore, in place of the old-fashioned sales skepticism about sales leads, I propose that every company needs to adopt a “No Lead Left Behind” process and follow-up with 100% of their sales leads.
Sales Leads Today Are Not The Old-Fashioned Sales Leads
“These are bad leads. I can tell just by looking at them.”
Really? How often have you said that? Or heard other salespeople make this claim?
I hate to say it, but I still hear salespeople say this like they believe it. When so much has changed in how our customers initiate their buying process, how they gather and evaluate the information that they need to make decisions and how they interact with vendors and their salespeople, surely you can’t believe that you can accurately guess the potential value of a lead just by glancing at it.
In fact, a sales lead today is a very different creature than those in the past and it demands a different proactive response. The Internet provides a low-cost, low-touch means for companies to deliver detailed information about their products and services to any interested party. As a result, the merely curious information seekers no longer have to reach out to a company, and consume its sales time by talking to a salesperson, just to satisfy their basic curiosity about a product or service.
A 2010 study showed that more than 90% of all B2B customers conduct some form of online research on a product or service before they engage with a sales person. This means that most potential customers have initiated their buying process prior to ever talking with a salesperson. As a result, the inbound sales leads that a company receives are from a different audience than even 10, 15 and 20 years ago. These are valid leads from people who have done their homework and are deserving of a response by sales.
Effective sales lead follow-up is a core sales process that every company needs to master. It is the easiest and fastest path to find new sources of revenue in nearly every company. But before you can define and implement this process you have to make the fundamental commitment as a company, and a sales team, to leaving no lead behind.
Check out Lead scoring in Base.
Join us as we welcome Andy Paul on 4/15 for the online seminar: The Science of Lead Response and learn how to measure and improve your lead response program. We look forward to having you join us!