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March 2004
Five Tips to Generate Higher Quality Leads and Boost Your Sales
By Kate Purmal, President, Driver Group
With new hope on the economic horizon, companies across the country are turning to lead-generation campaigns as a way to bring new deals into their sales pipeline quickly. According to a December 2003 survey by Bitpipe, Inc., lead generation will dominate the tech marketing agenda in 2004 and expenditures for online lead generation will rise to 45 percent, up from 40 percent last year.
There's no question about it, lead generation gets your phones ringing. However, before you invest, make sure that the program maximizes the quality and quantity of leads. To help you generate better leads from your next campaign, consider the following five tips.
Decide How Many Leads You Need
Define a measurable revenue objective for the campaign. Then calculate how many qualified leads you need in order to achieve that goal:
- Total Leads = Total Impressions x Response Rate
- Good Leads = Total Leads x Estimated Percentage of Good Leads
Since not all leads will fit your target customer, you need to estimate the percentage of good leads that you'll receive.
- Close Rate = Deals (12 months) ÷ Total Leads (12 months)
Finally, if you know your close rate (the percentage of good leads that ultimately convert to closed deals), you can estimate the number of deals that will result from your campaign. You can estimate this number (10 percent – 25 percent is typical) or look at your past sales data to calculate it.
For example, how many leads are necessary to close 10 new deals using the above equations? Let's assume that you get a 1-percent hit rate (typical range varies from 1 1/2 percent to 4 percent), 20 percent of the leads you capture are good, and your sales team's close rate is 10 percent. To close 10 new deals, you would need 50,000 impressions for a total of 500 leads, 100 of which are good.
Target the Right Leads
Clearly defining the ideal lead makes it possible for you to improve your list selection. As a result, you can spend less time and money to reach your target audience, while simultaneously increasing lead quality. Here are some questions you might ask yourself to determine the ideal lead:
- What are the characteristics of your best customers today?
- Is there a particular company size that is best?
- Is there a specific industry that is more likely to use your product or service?
- How do you know a good lead from a bad one?
Ask the Right Qualifying Questions
Since the number of leads that result in closed deals determines the success of a campaign, it's critical to follow up on hot leads immediately so you don't leave any deals on the table. The quickest way to identify good leads from bad ones is to ask three to five key qualifying questions during lead capture, preferably by multiple-choice. The questions should come directly from your definition of the right leads based on the “Target-the-Right-Leads” tip above.
For example, if your ideal lead is someone who authorizes or influences the purchase decision for your solution, is currently evaluating solutions like yours, and works in a large company with over 10,000 employees, you'll want to include three multiple-choice questions:
- What is the size of your company (number of employees)?
- What is your role in purchasing a solution?
- Are you currently evaluating solutions in this category?
Streamline Your Lead Follow-Up
If it's your good fortune to have the problem of managing hundreds of incoming leads every week, you need a quick way to differentiate the leads requiring immediate follow-up from those that can wait. Asking qualifying questions up front makes it possible for you to single out hot leads and to determine which ones aren't worth your time.
Typically, company size (or evaluation or purchase timing) is a key component when deciding which leads are worthwhile. To streamline the process, create three or more follow-up buckets for the leads you capture. For example:
- Hot — Lead fits target profile and purchase or evaluation timeframe; follow up within seven days.
- Warm — Lead fits target profile, but not purchase or evaluation timeframe; follow up within 30 days.
- Cold — Lead doesn't fit target profile; add to your marketing database for email offers.
- No opportunity — Target falls below your minimum company size or other key criteria.
Create a Low-Touch Plan to Advance Cold Leads
Not all leads generated through your campaign are immediately ready to engage in the evaluation process. Low-touch methods can move leads through the buying cycle without tying up expensive sales or telemarketing resources.
You can maintain a high level of awareness by touching these leads every 30 days through consistent email marketing campaigns. This inexpensive procedure will keep your company and product “top of mind.” Generally, you don't need to create new marketing materials. Regular email contact can include:
- Links to recent press articles
- New product or event announcements
- Email newsletter (quarterly)
- Case studies and testimonials
- Other marketing tools
Kate Purmal is the president of Driver Group, a Silicon Valley-based management consultancy. Driver Group clients include CBS MarketWatch, Hewlett-Packard, Intuit, Palm Computing, Handspring, and a number of emerging, venture-backed technology companies. Kate was voted one of Silicon Valley's “Most Influential Women in Business” in 2003.
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