How to generate qualified leads for sales effectiveness
CSO Insights recently published their Sales Performance Optimization (SPO) Study – 2016 Key Trends Analysis, surveying over 1,000 sales organizations worldwide. They found that 2 out of the 3 top objectives for sales organizations in 2016 top of the sales funnel. Topping the list is capturing new accounts - 58.4%; and at number three spot is optimizing lead generation - 38.3%.
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Secondly, they found that 53.3% of sales organizations see the inability to generate enough qualified leads as the No. 1 sales challenge to overcome in order to achieve sales effectiveness in 2016. In this article, I examine the four leads generation and prospecting strategies that you can implement today to ensure meeting or exceeding your sales goals in 2016 and beyond.
Here are the 4 Tips to Generate Enough Qualified Leads
TIP #1: DEFINE QUALIFIED LEADS
“Companies with formalized lead definition experience higher lead to first discussion conversion rates of 29.8% compared to 18.2% for those with No Formal Definition.”
In my work with salespeople, I find that lead definition is one of the biggest areas of confusion. This is partly because the sales orgnisation does not have in place a formal definition of leads to guide their salespeople at the top of the funnel. As a result, their CRMs are clogged with a list Suspects (leads) instead of Prospects (qualified leads). Simply put a qualified lead (prospect) is worth a company’s investment in time and resources whereas a disqualified one is either overlooked or nurtured depending on the situation.
Sales organizations should therefore firstly define their qualification framework for differentiating between ordinary leads and qualified leads, and secondly develop supporting tools to facilitate the lead qualification process.
Here are some typical questions your salespeople have to ask to qualify leads:
• Money - Do they have the money to pay for your solution?
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• Power – Who has the power to make the buying decision?
• Need – Does the individual or entity have a need for your solution?
• Time line – How soon do they intent to buy your solution?
TIP #2: LEAD SCORING
A company that meets or exceeds the expectations in implementing lead scoring’s win rates as a percentage of Forecast Deals is 48.8% and 55.5% respectively.
Source: CSO Insights 2014 Sales Performance Optimization Study
In today’s knowledge economy, there are so many sources of leads to the extent that salespeople can be overwhelmed by leads generation activities. That’s why it is extremely important for sales organizations to invest time analyzing which lead generation initiative works best for them, why and how to optimise its effectiveness.
• Identify all the ways you have used to generate leads in the past.
• Determine which ways worked best for you.
• Evaluate each of them against effectiveness, cost and time criteria.
• Based on which of them is determined as the most effective, scores should be assigned to them accordingly.
• Most importantly, test it and iterate to ensure predictability.
Lead scoring is therefore useful in focusing salespeople toward their best prospects.
TIP #3: PROSPECT PRIORITIZATION
According to CSO Insight 2014 SPO Study, companies that excel at prioritization of accounts have a win rate of forecast deals that is 25.6% higher than firms who struggle to prioritize.
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Another study also suggests that sales teams who prioritize their sales efforts are 18% more likely to achieve revenue goals and 22% more likely to meet or beat their sales quota. On the other hand, contrary to the benefits of prospect prioritization, the CSO Insights study shows that 43.1% of companies surveyed worldwide need improvement in their sales’ performance in properly qualifying and prioritizing opportunities. Does your sales organization lack these skills?
If so, consider the following approach to developing a prospect prioritization system:
• Review you current prospect pool.
• In asking which one you should prioritize, develop a set of specific criteria that can be used to evaluate potential business value and create an order of priority for contact. For example, one of my client’s criteria included that the entity must have an e-mail address and internet connectivity, a good credit rating and the geographical location of the decision-maker must be in the capital city.
• Assign a simple rating system that can help achieve greater objectivity when prioritizing your prospects.
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• The higher the prospect scores, the earlier the contact should be made.
• The process should then be incorporated in the sales process.
TIP #4: PROSPECT NURTURING STRATEGY
According to a study conducted by The Annuitas Group, nurtured leads make 47% larger purchases than non-nurtured leads. A study by Forrester Research also validates the above findings: companies that excel at lead nurturing generate 50% more sales-ready leads at 33% lower cost. However 55.4% of companies surveyed by CSO Insights in 2014 indicated that they “need improvement in their performance in nurturing promising leads for the future.”
The implication for sales organizations is that you have to view leads generation and prospecting as a campaign and not an event. It is akin to advertising and why long term advertising campaigns work harder than a one-off promotion. For starters, consider the following steps:
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• Develop a prospect nurturing strategy in conjunction with the marketing department.
• Incorporate an optimal number of communication contacts with prospects over a period of time – 90, 120, 160 days etc. This is very dependent on the sales cycle of your product or service.
• Make contacts in different ways such as telephone, text messaging, emails, articles and anything that can build awareness of your organization.
A strong lead nurturing strategy will help your salespeople to accelerate qualified leads through the pipeline smoothly, and shorten the sales cycle.
Conclusion
Remember the importance of the top of the funnel in your sales process: garbage leads in; garbage opportunities out. For starters invest in comprehensive lead generation training for your salespeople. Share this article with your colleagues to start the discussion in your organization.