We have always heard that it takes ten prospective customers in the sales pipeline to guarantee a single sale. According to Sales Performance International, the average sales person believes that the number is more like 50 percent of new leads result in sales, and yet their statistics show that barely one in five leads even results in a sales call, giving credence to our old statistic.
When you couple the salesmanís misconceptions about ability to close, it is no wonder that many CEOs and sales executives cite generation of demand as a major barrier to growth. For many printers and their suppliers, and especially for the smaller companies that donít have much staff, this is truer than for the general population. Very few of us have a facility in the middle of our customer base. One printer acquaintance, Swifty Printing, in the center of Seattle, WA, is a rare company that might be able to rely on the walk-in possibilities from the small retail and office businesses within a square mile of the print shop. Most of us arenít so lucky.
In the last few years, we believe that the situation is getting even worse. In 2006, the number of companies rating themselves poor or dismal in lead generation efforts increased by 20 percent. Clearly, lead generation is a major issue, but the solution is not just doing one more thing right, it represents the entire presentation of the company and its products to be more tightly meshed to accomplish growth.
Letís assume that your current customers know who you are, what you do well, and know they can count on you to perform. Perhaps you also know them well enough to understand that you could provide additional printing for them if you only had additional capabilities. Ben Franklin Press of Phoenix, AZ was in this position. They already had the large volume printing of programs for a few major league sports franchises. Expanding their capabilities to handle grand format banners and point-of-purchase (POP) displays by purchasing both roll and flatbed grand format printers and finishing equipment allowed them to expand sales with existing customers and to sell to new customers. In this example, it is relatively simple to create growth and to do it with a different, and perhaps easier form of prospectingóto people you already know.
But what happens when you arenít finding enough new qualified leads? Letís take a look at some of the interrelated issues that should be discussed.
Every company should start selling with a good story. When looking for funding, or talking to bankers, this is usually called the Elevator Pitch. Unfortunately, once past the start-up phase, too many of us pitch what we sell, rather than the customerís need fulfillment. Product centric messages are just not compelling, relevant, or differentiated enough in a crowded marketplace to win new business. Developing a compelling story that incorporates new trends or capabilities and ties into the prospectsí unique business situation, presents the opportunity to show you can help himóand it helps you to sell. Is there a special printing opportunity that the customer doesnít know you have the resources to develop? Does a printer need new equipment or software to solve a problem that he doesnít know exists? If you canít solve a customer need, youíre just mixed in with the industry noise.
In selling, our job is to align the problems our products solve with the correct potential buyers. Typically, we target market segments, instead of specific companies to solve their specific issues. This works much of the time as the message rings true to some of the recipients; however, if we can be more precise in our targeting, it should be possible to receive many more qualified leads. What kind of targeting methodologies do you use or have you trained your marketing and sales staff to utilize? Companies that achieve better targeting typically achieve 20-30 percent higher yields from their sales personnel. Think fewer, but more qualified leads.
Marketing and sales departments ought to be coordinated in their approach to the market. Launching products to the masses, while they appeal to specific types of companies, is counter productive. Marketing lead generators should be compensated on quality, not quantity of leads generated. Regardless of how many hits are received by your Web site, the only ones that really count are the ones that leave contact information for follow up. Some companies now pay a small commission for leads that result in sales calls and/or closed sales, rather than just on lead generation.
How do you know whether your lead generation system is working? Certainly, sales growth will give you an overall view of success, but not help you to tailor the process to do even better. Overall, there is a lack of metrics, systems, and tools necessary to measure the returns on lead generation. Printers and suppliers must get a handle on what correlating factors they should be assessing or monitoring to determine how well they will do. Typically, there is a handful of factors besides percentage of leads closing. Do the customers know what you have to offer? Are they willing to let you meet with them? Is the project being discussed funded? How soon are they going to buy? And if the first answer is no, do you know when to call them again to see if the situation has changed? These and other metrics can be used to gauge successful lead generation.
Sales Process and Methodology
There is a statistic that 75 percent of all the leads generated by a marketing department are never acted upon by the sales department. In many cases, the decision not to follow up is related to a gut feel that the lead isnít qualified, rather than to anything specific. Sales reps need to be given concrete processes and methodologies for following leads so they can use science rather than intuition to separate the bad from the good and to prioritize their needs. Do you know what percentage of the leads has been contacted, and/or how they are perceived by your sales team? Perhaps a cookbook of questions and answers about what makes a good customer prospect would help.
Individual Skills and Knowledge
Many sales people also lack the skills necessary to achieve the proper responses from previously non-qualified leads. In our industry, too many sales people are really order takers. If the lead isnít ready to buy, recent statistics show that more than half of companies convert less than half of their initial meetings into follow up conversations. If a sales rep canít move a sale forward she/he not only loses out on a specific piece of business, but on all of the future business that the customer might then provide to a competitor. If your sales personnel donít have the situational and problem solving skills necessary to cultivate leads into opportunities, all of the marketing and pre-sales efforts that you pursue arenít able to contribute their worth to your growth.
Here are other ideas to think about when generating proper leads for your sales team.
Trade shows are historically a great way to get leads. A company goes out of its way to present its products/ capabilities in the best possible light. Even small printers can find it profitable to present their capabilities at regional events that are in line with their market. But donít just see how many leads you can gather. If you donít qualify before your record leads, youíre just wasting your time. With all of the work preparing for the show, mishandling the lead generation process becomes a major turn off for sales personnel. Once again, it is the quality not the quantity of leads that is most appreciated. Perhaps there are other targeted methods to reach buyers more effectively.
If it is relatively easy to find prospective customers in your print specialty, why not consider very targeted road shows. The big benefit of road shows is the ability to demonstrate to a wider range of a companyís staff, see their reactions in a private setting, and know for real whether they have a need and are qualified to buy. You can even get loan pre-approvals through your leasing company if the sale of capital equipment is in the mix.
We always wonder about the lack of prospecting actually done by sales people. Many have a well defined territory. If selling printing equipment, for example, the Yellow Pages, Internet, newspapers, the local printing trade organizations, and the like are perfect places to find potential buyers. And, yet, many sales people just sit back and wait for the leads to come from corporate. In our view, there is nothing more fulfilling than to find your own leads, rather than to sit back and complain. Certainly, it should not be the sales personís responsibility in many situations to generate leads, but the lack of prospecting in the face of not enough sales is inexcusable.
Lead generation and qualification takes common sense and a certain degree of knowledge. By addressing the ideas discussed here, increasing your growth opportunities should be possible without added costs.