Posts Tagged ‘InsideUp Lead Generation Blogs – lead roi’

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How Much to Pay for Leads Depends on Lead Quality, Source & Results

Monday, October 4th, 2010

A high number of leads, which are offered at a very low cost per lead, usually result in anemic sales results. Yes, you can buy “leads” in large quantities for as little as $1 each, but these simply represent companies that may — or more likely, may not — be interested in actually purchasing your services. The point is there is an enormous gap in quality between a list of “leads” and real-time leads that represent buyers who are actively seeking your services.

If you’ve been reluctant to purchase leads from a lead generation company (for whatever reason), you could be doing your business a big disservice by missing out on one of the richest sources of leads available. Some marketers hold back simply due to their uncertainty over how much to pay for leads.

What you may not know is that seasoned lead buyers gladly pay more for leads whenever those leads represent pre-qualified and verified prospects who exhibit an active willingness or readiness to buy. It simply makes logical sense.

But before purchasing leads from an online generation company, ensure that it offers filters that allow you to precisely specify the type of leads and associated demographics that are most likely to purchase the services you offer. This increases the relevancy of your leads, which means you get targeted leads based on your lead selection criteria.

The better, more professional lead-gen companies also follow another best practice: They use live human beings to contact every potential lead before offering them for purchase. This ensures that lead buyers receive correct and accurate contact information. This single factor alone greatly increases the speed, ease and profitability of working a lead.

Lead Quality Depends on Lead Source

The source of your leads also affects lead value and, therefore, the price you should be willing to pay. The best lead suppliers offer leads at various value-based pricing levels, allowing you to buy, for example, premium, real-time leads versus slightly older leads offered at bulk rates, or a combination of the two. Many slightly aged leads represent bona fide prospects who simply have a longer time-to-purchase cycle.

Leads generated by your company’s own online marketing efforts may cost less, but the closure rate for leads generated from internal campaigns was less than 20% for two-thirds of business services firms recently surveyed by InsideUp.

Leads from any source should never be evaluated on subjective measures, but tested – and return on investment is the best measurement. Be sure to keep your ROI expectations reasonable, however; don’t expect a $1000 lead spend to turn a $10,000 profit within six months.

When determining ROI for purchased leads, the thing to measure isn’t the initial cost per lead but what your new Customer’s Lifetime Value, or CLV, is over several years. The repeat purchases from each customer can add up to several thousands of dollars over the years of your business relationship. (Check our blog on CLV here.)

Results: Compare, Compare, Compare

One of the best ways to get an accurate picture of how purchased online leads perform versus other lead sources is to create a comparison table or model based on transaction data and campaign results. Include revenue, market share and profits, volume, conversion of leads and direct response metrics. See which ones perform better.

After weighing such factors as lead-to-sale ratio and average profit margin for each sale, many marketers have found that higher priced leads usually have appreciatively higher performance results.

Once you’ve gained a thorough understanding of the cost to value relationship of leads, you’ll find that complementing your own marketing efforts with quality leads from a lead generation company can be a very cost-effective means of reaching your sales goals.

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Use Targeted Sales Messages to Avoid Wasting Your Leads

Monday, October 4th, 2010

Sales messaging is the foundation for all your sales and marketing efforts according to sales and marketing effectiveness expert Michael Cannon. “Most companies do not have a definition for their sales messaging, let alone a methodology for how to develop and deploy it,” Cannon states. “The results are millions of dollars in lost revenue, higher sales costs and missed bonuses.” He recommends using the following top-10 principles for creating effective sales messaging that will increase orders and improve profit margins for your company:

  1. Have One Specific Offering. Sales messaging is about selling one complete product or service. A number of products and services bundled together can also be considered one offering. Products or services that are sold on a standalone basis will require sales messaging particular to each.
  2. Target Each Buyer. Consider, for example, whether the buyer you are targeting is a prospect, customer, channel partner, industry analyst or investor. Buyer sub-types include user, technical and financial. Identifying buyers by title, role and offering will help to create sales messaging relative to each buyer’s interest.
  3. Answer Buyer’s Primary Questions. Each buyer has different buying questions. For example, prospects want to know, “Why should I buy your solution rather than a competitive option?” Customers are asking, “Why should I continue buying from you?” Channel Partners wonder, “Why should I distribute your product or service?” Tailor your answers accordingly.
  4. Support the Product and Sales Cycle. In the early stages, the most important question you need to answer is, “Why should I change what I currently do and buy a product or service like this?” Educate the buyer on why they should make that change. Later, the primary buying question becomes, “Why should I buy your solution rather than a competitive option?” Your sales message at this point should highlight factors that differentiate your company.
  5. Incorporate the Black and White Factor. Studies show that the human brain comprehends best when it’s presented with a clear contrast between opposites. Statements like “We are one of the leading…” is not as compelling as “We are the leader in…” Use sharply contrasting adjectives like Only, Fastest, Easiest-to-Use, Best Value, etc., to create powerful sales messaging.
  6. Employ the Differentiation Factors. Five important differentiation points include Time, Money, Risk, Strategic Position, and Personal. Attract buyers by appealing to as many of these points as possible.
  7. Provide Proof Points. Most buyers consider your sales messaging to be mere claims. Increase your credibility by providing ample evidence to support what you’re telling your buyers. Make full use of customer testimonials and case studies, the best type of proof points. Also effective are independent 3rd-party organizations such as ISO and the Better Business Bureau. Demonstration or proof of concept implementation are the third best type of proof point.
  8. Apply the “Me Too” Factor. For your sales messaging to be truly effective, differentiate your company with claims no other company can make.
  9. Organize into Three Points. Points presented in groups of three are remembered more easily. Construct your sales message using this principle to maximize effectiveness.
  10. Use a Single-Page Summary.  Simplify the answer to each buying question to a one page format, which is the most your sales reps and buyers will be able to remember at one time.

Most companies are not yet familiar with the principles of sales messaging. Learn to use them effectively, however, and you’ll reap tremendous advantages in pulling more revenue from your sales leads.

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Using Customer Lifetime Value to Plan Your Lead Generation Budget

Saturday, September 4th, 2010

When it comes to purchasing leads, how do you know how much of your marketing budget to invest? With a few simple calculations, you can be sure you’re on the right track, knowing that your expenditure is more than just a leap of faith.

Marketing executives at business services firms feel frustrated when they don’t see an immediate return on investment from leads, especially if they are evaluating leads from a new source. Sales cycles for most business service companies’ average about three months. And even if the lead is qualified, will it take some time for revenue to be generated from the provider of your new leads.

Furthermore, the marketing metrics being used to measure leads are not necessarily the right ones. For example, if your average sale per customer results in $250 in profit in the first year, and you purchase 10 leads at $25 each, with a ten percent conversion rate to acquire that new customer, you might feel concerned that you essentially broke even on your initial marketing investment.

However, customer lifetime value (CLV) is increasingly being used as an appropriate measure of lead value. CLV reflects the present total value of a customer to the company over his or her lifetime. When we discuss CLV, we typically refer to the value of a single customer, using the average sales of such a customer. The model of CLV can be broken down as a function of these three elements:

  • TP: Total Annual Profit (Total Sales – Cost)
  • TC: Total Customers
  • CL: Average Customer Life (in years)

Using the elements, customer lifetime value is calculated as CLV = TP X CL.

Although CLV could measure the customer’s value over his or her lifetime, most marketers use three years (based on considerations surrounding product life cycle, customer life cycle and profit calculations).

Now when you calculate the CLV of a single customer, you will see just what the true value is of your investment in leads. Plus if you factor in any repeat or additional purchases made by each customer, that $250 profit can turn into several thousands of dollars over the term of their relationship with you.

Companies such as Amazon, whose average customer purchase is about $20, typically spend much more than that in marketing dollars to acquire each customer. Why? Because they look beyond the initial buying cycle to realize that over a period of several years, that customer will likely spend thousands of dollars.

Generating qualified leads can be a complicated process, but a good lead generation company can specifically tailor the lead acquisition process to the needs of your business so you can be assured of receiving quality leads…leads who are actively seeking the services you provide…leads who will most likely convert to longtime, valuable customers.

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InsideUp Lead Generation Blogs – Strengthen Your Sales Message to Boost Sales

Monday, August 23rd, 2010

When you receive pre-qualified leads who are ready to buy, they will still need compelling reasons to buy from you rather than from your competitor. You can increase sales up to 30 percent by creating a sales message that is relevant to your buyers’ questions.

A 2008 survey by International Data Group found that the chance of closing a sale was reduced by 45 percent when the content of the sales message was not relevant to buyers’ most pressing questions. The study also found that 42 percent of the time, sales teams had not been provided with adequate training and tools to help them answer these questions persuasively. Although the survey participants were IT buyers, the same principles of effective and relevant sales messaging applies to virtually all types of marketing.

Sales messaging is defined as offering a persuasive and compelling answer to a buyer’s primary questions regarding the services you offer. The three basic questions buyers have are:

  • Why should I meet with you? (If an initial appointment is the next step in your sales process.)
  • Why should I replace my current solution with your company’s services?
  • Why buy this solution from your company and not from your competitor?

According to a recent poll by BtoB Magazine, 70 percent of marketers graded themselves at “D” or an “F” level in regard to how well they prepared sales messaging and supporting materials for their sales team. If you feel you fall into this category, the good news is that you have the opportunity to increase sales by analyzing and strengthening your sales messaging.

The first step toward stronger sales messaging is to know your target market well. This will enable you to replace weak generalities such as “great customer service” with specific information about how your company is uniquely positioned to fill a buyer’s needs.

A future post will go into further detail about how you can create a compelling sales message.

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InsideUp Lead Generation Blogs – Seven Tips for Effective Lead Management

Friday, August 6th, 2010

Even the best leads will not produce the results you want if they are not managed and nurtured well. A study by Marketo found that only 25 percent of new leads are actually sales-ready. The rest will require a long-term management strategy to bring in results.

An unofficial survey of several lead management companies produced the following best practices.

1. Nurture leads before sending them to sales. ( Unless you have purchased real-time leads from a lead supplier. Sales should contact these leads immediately, and any that do not close should be given to marketing for further nurturing.)

2. Become a recognized authority in your industry. Offer your expertise to help prospects make an informed decision. If you provide guidance without pressure, you will come to be viewed as a trusted source.

3. Work with sales to define a sales-ready lead. Take into account demographics such as company size, yearly revenue, and purchase time-frame. If you have purchased leads from a lead generation company, that work has already been done, and these pre-qualified leads can be sent directly to sales.

4. Keep your sales team informed about which marketing activities each prospect has responded to, so they can tell you which strategies are yielding results.

5. Compile qualifying questions, call scripts, and email templates to help with the initial contact. Using these tools, a rep can refer to specific interests the prospect has demonstrated, such as downloading a white paper on a particular topic. Ask questions that will help you gain new information, rather than what you already know about your prospect.

6. Don’t waste leads. Make sure sales follows up on each one. Reassign leads that aren’t contacted the first time around. Every lead should be valued and cultivated through the often very long B2B sales cycle.

7. Track the results of individual marketing activities to gain a deeper insight than you would by simply tracking the lead source.

If you are working with a lead generation company to supplement your in-house marketing strategies, many of the best practices listed above, such as lead scoring and qualifying to determine which leads are sales-ready, will have already been done by the lead supplier. Using pre-qualified leads can take some of the pressure off your marketing team while keeping the pipeline filled.

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Keeping Prospects Engaged Through Email Can Lead to Future Sales

Tuesday, July 13th, 2010

Email is proving to be one of the most effective means of initiating contact with and nurturing B2B leads. A recent study by MarketingProfs found that companies offering business services were among those who experienced the highest open rates (at 21.9 percent) as well as an excellent click ratio (at 4.9 percent) in their email campaigns.

In a 2010 survey conducted by Datran Marketing, 39.4 percent (the highest result) of industry executives, reported that the email was the most effective advertising channel for their company.

A strong email marketing campaign will combine the right timing of emails with a targeted campaign based on where your leads are in the sales cycle. Building a relationship in this way will result in greater customer retention and higher repeat purchase rates.

In fact, a 2009 study conducted by the Direct Marketing Association revealed that email marketing resulted in an ROI of $43.62 on every dollar spent. This was the highest rate of all direct marketing methods.

Immediate Initial Contact Followed by Nurturing—A Golden Combination

The best time to email a new lead is within the first five minutes of receiving the lead. Take this opportunity to thank them for their interest and to present any special offers you have as further incentive to try out your services.

Use email to build trust throughout the sales cycle. This is especially effective for B2B purchases, which typically have a longer sales cycle as the buying decision goes through various levels of approval. Your emails can create an atmosphere of goodwill and demonstrate that you’re there to help them find solutions.

Focus on providing real value with every email; your prospects will appreciate the fact that you are delivering more than just a sales pitch, and the occasional testimonial or case study regarding your services will be well received.

Once you have closed a sale, send an immediate thank you email and let your customer know you are there if they need help. This is a good time to offer tips on how to get the most from their purchase.

Retention emails afford the opportunity for future sales, but be careful to avoid a “hard sell,” and always pepper your sales messages and offers with useful tips and information that will help build confidence and trust in your company.  

So what are the best times to contact your leads? As with telephone marketing, the best time to email a new lead is within the first five minutes of receiving the lead. Take this opportunity to thank them for their interest, and to present any special offers you have as further incentive to try out your services.

Email is a valuable tool for building trust throughout the sales cycle. This is especially true for B2B purchases, which typically have a longer sales cycle as the buying decision goes through various levels of approval within a company.

A slower economy has also contributed to lengthening sales cycles, resulting in an even greater need to fine-tune the nurturing process. An effective email campaign can help create an atmosphere of goodwill with your prospects and demonstrate that you’re there to help them find solutions.

Strategic consultants at Responsys suggest using a progressive profiling system, asking only one question with each email, letting the customer set the tone and pace, and being careful to never assume too much about your prospect.

During the consideration phase, continue to monitor the data you collect about your prospect and change your messages accordingly.

Strategists for ExactTarget recommend that companies focus on two complementary goals during this stage: Deliver content that helps establish the company as the expert on the topic of interest, and educate the consumer on the products or services the consumer inquired about.

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Close More Leads with Mature LMA Solutions

Thursday, June 17th, 2010

The dream of every B2B marketer and sales rep is to close every single lead. The reality, however, is that a percentage of even top quality leads will not close on the first contact, for a variety of reasons. One way to increase your closing rate is by using lead management automation (LMA) technology.

A recent survey by Forrester revealed that companies utilizing mature LMA technology are able to close 10 percent of their qualified sales leads, a considerably higher amount than the 4 percent reported by companies with a less mature LMA solution.

Implementing LMA processes that work for your company begins with finding the right vendor. Most LMA providers offer their services as a hosted solution, reducing or eliminating the need for software installation.

Vendor Choices Abound, but Quality and Features Vary Greatly

There is an abundance of both new and established vendors, each offering different capabilities and features. And new vendors seem to appear daily. That’s why it’s important to choose a reputable vendor with the expertise to help you strategize, analyze results, and provide continued support toward the development of best practices.

According to marketing automation experts at Loopfuse, a vital feature of LMA technology is “the  consolidation of data across disparate data-sources. That is, the data you once had to pull from your Analytics package, your CRM, your Lead Capture database, and your Email Marketing solution are now consolidated under one roof.”

Other features most marketers will find helpful include:

  • CRM Integration: Helps to align marketing and sales; allows CRM data to be easily manipulated from within the marketing automation platform.
  • Lead Nurturing: Automated communications keep prospects and customers engaged, and increases up-sell rates.
  • Lead Scoring: Quality metrics applied to each lead and prospect, relative to that of others in your database.
  • E-mail Marketing: Targeted e-mail marketing; launches e-mail campaigns to prospect groups.
  • List Management: Segments your lead database and targets leads via focused, automated campaigns.
  • Reporting: Allows for easy tracking and measuring of response rates, so you can make immediate adjustments, and plan for future campaigns.

This is just a short list, and every vendor will have a different selection to offer, especially as the technology continues to develop. B2B marketers will find that LMA solutions facilitate the shift from outbound to inbound marketing, and help to establish long-term customer relationships.

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Make the Most of Your Leads with a Lead Management System

Sunday, May 30th, 2010

New research by the Aberdeen Group, in conjunction with SmartLead reveals how top companies are achieving better sales conversion from their leads. The January, 2010 study reports that 63 percent of the businesses who have reached the highest levels of annual growth in lead to sales revenue and customer acquisition have done so as a result of investing in lead management technology. These companies indicated that they are seeing measurable ROI after implementing the new lead management systems.

The report, Crossing the Chasm with Automated Lead Management, details the results these companies are seeing after adopting a lead management system:

  • 79 percent improved their company-wide annual revenue growth, increasing average performance by 59 percent.
  • 75 percent improved their current lead-to-sales conversion, reporting an average of 23 percent improvement.
  • 86 percent noted an increase in lead-to-sales conversion over the past year (versus 39 percent for all other companies).

The organizations in the study cited the need to increase their new customer acquisition revenue as the number one reason for acquiring the technology.

How Does a Lead Management System Help Businesses Improve ROI?

Utilizing lead management solutions such as CRM (Customer Relations Management) in conjunction with best practices in lead management, can streamline sales administrative processes, and allow your sales team to focus that much more of their time and efforts doing what they do best–converting your sales leads into revenue for your business. While most larger corporations are already making full use of a lead management system, many small businesses have yet to realize the advantages it can offer.

This technology has numerous benefits such as lead data tracking that lets you easily calculate ROI on a regular basis, so you can adjust your focus on the leads that are generating the best income stream. It also maintains easy access to data on every single customer, which can help your sales team to shorten the sales cycle, and also ensure that you never lose a lead within the system.

If you decide to invest in lead management technology for your company, take the time with your sales department to learn how to use the system to your company’s best advantage, and maintain open communication between management and sales regarding the new strategies and practices involved.

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Seven Steps to Increase the Productivity of Your Sales Team

Wednesday, May 12th, 2010

A new white paper released by the Sales Lead Management Association offers some insight into the question of why some businesses fail to see a satisfactory ROI, even with high quality, real time leads.

The reason is that the majority of leads are simply wasted. A survey by the SLMA found that 75 to 90 percent of all leads turned over to salespeople are not followed up on. How do you know if this is happening in your company?

  1. Track your ROI. A separate study by the SLMA found that more than 60 percent of businesses do not do this, even though most sales software comes with ROI tracking built into the program.
  2. Identify and isolate issues related to meeting your ROI, and establish a plan to overcome these issues and meet your ROI goals. Include some of the steps below to increase the productivity of your sales team.
  3. Establish a policy that requires 100% follow up on leads.
  4. Observe whether your team is spending too much time between calls. If so, minimizing distractions will help them stay on track—and on the phone with those leads while they’re fresh.
  5. Use progressive dialing, which will automatically start to dial the next number in line as soon as the salesperson ends the current call. (Not to be confused with predictive dialing, which causes a pause when calls are answered; most people will recognize this as an automated call.)
  6. Next best call routing is also an excellent tool. It eliminates the need for the sales rep to stop and analyze which call will be the best one to take, which can eat up a surprising amount of time. The system will select and route the next best calls to each rep, based upon criteria selected by the company owner or manager.
  7. Make certain your leads are properly nurtured. Have a plan in place for following up on leads that do not result in a purchase on the initial call. These are still very valuable leads, but are often ignored by salespeople.

By taking these simple but effective steps, and continually tracking your results using the ROI tracking aspect of your sales program, you should see a higher percentage of your leads turning into customers.

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