LEAD GENERATION: THE LIFELINE OF ANY SUCCESSFUL SALES GROWTH STRATEGY
We all know that the best and fastest way to grow your business is with existing customers, particularly those with ample funds, active projects and a commitment to your relationship. Most of us are also familiar with the 80/20 rule, where business is done by the few, strategic customers that keep coming back. However, new customer leads are just as imperative for any company seeking to sharply grow revenue and protect its market standing.
Lead generation is the lifeline of a thriving sales growth strategy. The percent of new customers can range from 10 to 30%, depending on business goals, turnover of existing customers, available sales resources or % of sales quota criteria, and whether there is a willingness to focus on long term payback.
Yet, as noted, the need to include new customers into sales pursuits is also for risk mitigation. This may be one of the strongest cases for lead generation in addition to revenue growth. Even the best companies lose customers. Smart companies face this reality head-on and plan for it. Without question, lead generation helps to enable new customer acquisition that’s required to effectively manage naturally occurring sales erosion. Consider the following situations:
- Your best customer has recently been acquired by another company and the new company’s head engineer favors the technology of your number one competitor. And, by the way, the CEO of the takeover company just happened to work for the competitor in his ‘previous life.’
- The industry of your second-best customer has slowed dramatically. They are in survival mode and are weighing options to maintain a healthy bottom line. All non-critical projects have been put on hold, including a sizable project that incorporated your high-dollar offering.
- A strategic customer bought primarily on the strong relationship and trust he had with one of your top salespersons. Tom is now retiring and his replacement is finding his footing. The account is in limbo.
Now that you’re convinced you need leads, what kinds of leads work best?
The most obvious answer to this question, are those with the highest potential to convert from a lead to a customer. Customer referrals readily offer this. They are phenomenal. However, there usually are not enough to reach new customer acquisition goals.
When searching for additional lead sources, one should look both externally and internally. Internal sources for leads are very often overlooked. Yet, they can have the highest conversion rate because the candidates have already shown interest through action. For example, they’ve browsed the website or clicked on an online ad. Old customers are similarly viable due to past interaction. If circumstances dictated a decline in them doing business with you, things may have changed. Desirable external and internal lead sources are as follows:
The best leads have a catalyst!
A lead catalyst means there is a change that has taken place with the customer that presents an opportunity for your organization. It may be an industry expansion or disruption, new regulation, manufacturing breakdown or new competitor vulnerability. The optimal lead mix is 60% hard leads and 40% soft leads. The advantage of hard leads is the direction is specific and the time to close is faster. Soft leads are exploratory in nature. They represent growth opportunities and tend to be larger in scope. See examples of the spectrum of leads below.
Lead expectations must be properly managed for successful outcomes. Keep in mind the following:
- No lead is guaranteed
- The best lead is one where you offer a unique solution the customer has a ready project
- Most leads require several steps of involvement before the actual potential can be gauged
- Leads often lead to other leads
- With a lead, timing is everything
- Lead generation is not the same as prospecting, leads have an associated catalyst
- Leads do increase hit rates and reduce sales cycles
- Lead tracking and lead quality assessments are critical parts of a Lead Generation Program