When I think about the biggest mistakes we make in marketing – this one is huge.
And yet it can be easily addressed, and addressing it could transform your marketing and business results in 2015.
What I’m talking about is the huge wastage in your business from leads that don’t convert with your business – but do with another company some months down the track.
Here’s what happens and why you have such massive wastage levels…
You spend money and time each month generating leads to feed your hungry sales team.
They take these leads and ‘process’ them – qualifying, meeting, quoting and following up.
They end up converting a percentage of them – typically between 5% and 20% of the total number of leads generated by your marketing (note this is not their conversion rate from quote to sale, but from enquiry to sale).
All fine so far. But there is a problem (or opportunity depending on how you look at it).
If your business converted 10 out of 100 leads from enquiry to sale – then by default a massive 90 of the 100 are either a no, or a ‘no not yet’.
These are typical figures.
You can see how this works in this short video clip (click on the graphic to go to the video)…
The Problem – The Opportunity
The problem is simple. If you generate £1m in new business from the 10 out of 100 leads that your business converts, then you left a potential £9m of unconverted business lying on the table.
If you generate £100,000, then you’re leaving £900,000.
Either way, the wastage is scary. And the opportunity is huge.
Sure, you could never expect to get all 100 – some buy somewhere else, others don’t meet your credit score criteria, and for others the project or requirement doesn’t materialise.
But there is a valuable group who neither buy (yet), nor are a definite no (yet).
The problem is that your salespeople ‘go off’ these people.
They get non-committal responses to their follow up calls, they get ‘fobbed off’ with “leave it with me, I’ll get back to you”.
Then after 3 or 4 ‘fob offs’, your sales people assume that they are really a ‘no’, and go looking for the next new lead.
Yet we know that 60% of buyers are ‘slow buyers’ – who often fail to respond positively until you have contacted them between 5 and 8 times, and sometimes up to 20 times.
So by the time a large number of your expensively acquired prospects are ready to move forward, your sales people have given up on them.
And because no one from your business has been in touch with them for some time, top of mind awareness has slipped, the prospect re-enters the market, this time ready to buy quickly, but (as the figures show) often ends up buying from another business.
You had them, and lost them. Your business ‘blew it’.
Right now you may be tempted to wade into your sales team, and lay the blame at their door.
But who incentivised them to look for ‘fast buyers’ in the first place? Could it be the monthly or quarterly commission based targets that you set?
So you can leave your sales team alone. They’re good at dealing with fast buyers, which is important, but you need to make sure that as a business someone is taking responsibility for staying in touch with slow buyers – the ‘no not yet’s’.
The best solution lays in creating a system for staying in touch with that valuable group of prospects, that doesn’t rely on your sales team.
Think of it like the big stacks of jets that circle around above Heathrow every day, in a holding pattern, waiting their turn to land.
You need to create a ‘holding system’ for keeping close to prospects who are not yet ready to buy, but will be soon.
We call this a Prospect Conversion System.
Simply put, it is creating a system for making sure that over the 12 months (or more) following initial enquiry, your business gently but professionally stays in touch with prospects.
This is not about phoning your prospects ad infinitum.
It is about creating a thoughtful process or system for staying in touch, that identifies when the prospect is ‘ready to land’ and when they should come out of the ‘holding pattern’ and go back into your sales process.
It should NOT be run by your sales people!
It really is a marketing function where they keep the relationship alive, only handing it back to the sales team when the prospect is ready to proceed.
Here is an example 12 month communications or Prospect Conversion Calendar, largely based on email broadcasting which is now both highly effective (it gets great results) and a fraction of the cost of any other medium (direct mail, telephone, field visits, events).
Simple 12 Month Prospect Conversion Communications Calendar
Month 1 – Email Newsletter (like this one)
Month 1 – Offer Email
Month 2 – Email Newsletter
Month 2 – Event Invitation (by Email)
Month 3 – Temperature Check Phone Call (by sales administrator – not sales person)
Month 3 – Email Newsletter
Month 4 – Sales Letter (be Email)
Month 5 – Email Newsletter
Month 5 – Offer Email
Month 6 – Email Newsletter
Month 6 – Temperature Check Phone Call
Month 7 – Email Newsletter
Month 8 – Event Invitation
Month 9 – Email Newsletter
Month 9 – Sales Letter (by Direct Mail or Email)
Month 10 – Temperature Check Phone Call
Month 11 – Email Newsletter
Month 12 – Christmas Card
This is pretty simple, but you can modify this to suit your business, resources and industry.
The main thing is that you ‘touch’ your prospects once or twice a month, over a long enough period of time to ensure that your business is still there when your unconverted prospects are ‘open to buy’.
Worried that you’ll be hassling your prospects too often?
Good thought – but in reality when you produce quality communications, your prospects will put up with your ‘Ads’ with a remarkably high degree of tolerance.
The problem with most businesses is that there is an initial burst of activity, then … silence.
If that burst of activity happily coincides with the buyers’ time frame, then great. If not, then you have a major problem (opportunity) on your hands.
By the way, if you are contacting them too often, a rising ‘unsubscribe rate’ and falling ‘opens’ rate on your emails will give you plenty of warning.
As long as you are relevant, and focussed on giving great information, you’ll be surprised how receptive your prospects are.
What can you expect?
Well, if the figures are to be believed, then you could find that you get twice as many new clients (eventually) as you do today when you create and implement a Prospect Conversion System.
Now it definitely varies from industry to industry, and from business to business – but testing has shown that in some cases doubling sales is the reality.
And because nurturing a prospect in this way is a fraction of the cost of generating new leads, it is highly profitable.
Let’s face it – even if your Prospect Conversion System just brings 2 prospects back from the 90 ‘no’s’ to join the 10 new clients that you got on the first pass – that would be a 20% increase in new customers, for a relatively small outlay.
Would that transform 2018 for you?
If you commit to one change in 2018, I think creating a Prospect Conversion System has got to be right at the top of your list.