Lead Generation – Which Sources Convert to Sales?

Lead Generation Image

Recently, I’ve been doing some consulting to help a company optimize their B2B lead generation program.  This company is a successful services firm currently struggling to meet their new customer acquisition growth goals.  Their questions were:

  • Which lead generation activities convert into more sales?
  • Are we investing in the right lead generation activities?
  • How many leads do we need to drive a healthy sales pipeline?

During the discovery interviews, I learned that this company currently generates the majority of their sales leads from digital marketing, campaigns, sales prospecting, events, partners, and referrals.  The Discovery Deliverable endeavored to answer the 3 questions listed above.

Which lead generation activities convert into sales?

This question was very well stated, because it allowed me to dig into lead generation program specifics.  There is a difference in lead generation programs, depending on how success criteria is measured.  Most of my experience revolves around measuring success based on how many Marketing Qualified Leads, MQLs, are generated.  From my research, lead sources for obtaining MQLs, leads that convert to opportunities are, in order of outcomes are: company website, referrals, webinars, social, paid advertising, paid search, and sales prospecting.

There’s another way of measuring lead generation and that’s to measure conversion rates of leads to deals.  The research tells an interesting story about lead generation sources when measured this way.  B2B lead sources, in order of desired outcomes, are referrals, social, email campaigns, paid search, & sales prospecting.

Referrals are, by far, the best performing lead source.  We all know that, right?

Are we investing in the right lead generation activities?

Well, yes and no!  Here’s how the activities at this company lined up, in order:

  1. Digital marketing, website and social
  2. Event, face-to-face and webinar
  3. Partner
  4. Campaign
  5. Referral

Based on my research, lead generation activities might be realigned to focus on:

  1. Referrals
  2. Digital marketing
  3. Sales prospecting

Partner, campaign and event lead sources, while interesting, are below average conversion B2B leads.

How many leads do we need to drive a healthy sales pipeline?

This company had a good handle on how many leads to generate to accomplish their sales goals.  The discussion about how many quickly became, how many leads should we generated from each lead source?  By re-staging their lead generation sources, the goals for numbers of leads remained the same.  The focus was on increasing the quality of each lead, from the perspective of investing in obtaining leads from sources with above average lead-to-deal conversion rates.

What were the lessons learned?  For me, one important lesson is that high value lead sources, like referrals, should be engineered into a business process.  The second lesson was that referral marketing, as part of a digital marketing program, can increase the quality of leads.  Higher quality leads, measured using a lead-to-deal conversion lens, will generate more revenues.  That’s what we all want.

Measure Twice, Cut Once

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When carpenters decide to cut a piece of wood there’s always the practice of measure twice, cut once.  It takes a bit longer, but it saves time in the long run.  It also reduces waste and helps the project come in on-time and on-budget.  According to the Idaho Forest Products Commission, a typical 2,400 square foot home requires about 16,000 board feet of framing lumber and 14,000 square feet of other building materials.  There might be 1,500 pieces of lumber and 300 pieces of sheet stock in that house.  Ever think about the number of times someone has to cut a piece of wood or sheet stock to build that house?  It might be more than 5,000 times.  Reducing the number of times any measurement was wrong, even by 2%, makes a difference in the time and cost of building the house.

building-new-houseThe process is measure twice, cut once.  There’s a feedback loop going on here that’s important.  The board is too long, a measurement is taken, the board is cut, the board is fit and then there’s the feedback.  If it was still too long, too short, or close enough different decisions are made.  If the feedback is that it’s cut to fit, it’s used and the building process goes on to the next step.

Revenue Acceleration, from a client’s perspective, is complex.  First, there’s an awareness that there’s a problem with sales.  Then, frustration grows.  The process, including committing to a change from the status quo, to considering alternatives, and then deciding how to go forward, requires strategy and planning.  Measure twice, cut once, is a good practice.

As a revenue acceleration advisor, it’s part of my brand firm’s promise to help clients make needed changes.  It’s even in the name of the company, Novation Selling.  Novation is defined as (1) the substitution of a new obligation for an old one and (2) the introduction of something new; innovation.  In order to fit in something new, we need to measure twice, cut once.  In a way, it’s like building a house.old-house-13186084721wl

So, why is measuring twice, cutting once important?  From the homeowner’s perspective, the one that matters, if the boards and sheet goods were cut wrong and still used, then the house would certainly not look like the plans they invested in.  Maybe, at best it would look like a poorly constructed house.  Certainly not what was expected.

As an advisor, that is an architect and engineer, I approach revenue acceleration as a process.  So, for me, it’s about measuring twice and cutting once.  Measuring is using analytics to determine the opportunity.  The opportunity is a forecast of the upside revenue that is achievable by implementing the right processes, technologies and strategies.  It’s about using data, based on information from more than 11,000 companies and 1,000,000 sales people, to determine the programs that need to be engineered to accomplish the goals for revenue acceleration. Cutting is about delivering the programs recommended by the measuring to bring about the desired outcomes, more revenue, faster.

Measuring twice, cutting once.  Are you ready to measure?  You can investigate here.

 

Getting Picked!

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When I was a kid we all knew where to find the best pick-up basketball games.  Usually, it was in someone’s driveway or at the city’s outdoor basketball courts.  Once there were enough of us shooting around, a pick-up game would be started.  Everyone knew what skills and how good each of us could play the game.  The two players picking their teams, from the players that were eager to join, had ideas about their first picks and hoped their last “picks” weren’t all that bad.  After getting picked, we all knew what positions each of us played best and, usually, there weren’t too many disputes about that.  In most cases, we all knew which team would most likely win after the picking was done.  We played anyway, and sometimes got surprised.

Often, when I think about sales teams, I’m reminded of pick-up basketball.  Knowing who plays best and what position we want them to play is crucial.  Mostly, we’re biased towards those that score the most points; bring in the most revenue and blow past quota.  But, how do we know whether the team we “picked up” is going to win?

One approach, like pick-up basketball, is to make sure the 1st picks are the best and hope rest aren’t that bad.  The idea is to ensure the best stay with us and then continually swap out the “last to be picked” with new talent.  Unfortunately, unlike pick-up basketball, there’s a huge cost to this approach.  If you’re interested in knowing about this cost, use this Sales Hiring Mistake Calculator – go there.

Of course, there’s a better way.  We all know that getting on an organized sports team, at any level, requires try-outs.  At more competitive levels the player is scouted and data is collected to recruit the best players for the team.  The coaches have a full player evaluation to know how to integrate each player into the team.  There’s detailed data about what training and coaching is needed for each player to excel at their position and, be part of the team.  You can tell which programs are best, because they win championships.  You can also tell which programs aren’t the very best.  Those are the teams that don’t win the championships, but have their top player on the league’s all-star team.

How are you building your team?  Do you have all the data about your players?  Once you’ve picked your team; how do you on-board, train and coach?  Is your team winning the championship, or just sending your top players to the all-star game…you know…the few sales reps that wins the president’s club trip?  The figure below represents data about several sales reps on a sales team. The data items in red represent findings outside of the set conditions.  The sales coach with this information knows what needs to be done to get to the championship.  There’s also information that tells management which salesperson is going on the president’s club trip.

OMG Sales Force Evaluation Chart

The best place to start towards building that championship team is to evaluate how far away you are from being the team to win the big game.   If you did the evaluation, what would your team’s results look like?  Do you know if you have a championship team or just some players that will be going to the all-star game?  Learn more about using science-backed data analytics to evaluate your sales team – go there

“Listen, Everyone, Just Do What She Does!”

 

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On every sales team there are the top sales producers that management wants everyone to be like.  The top of your sales department is closing sales and meeting quota.  I remember working at an independent sales agency that represented electronic and electrical manufacturers.  The agency’s top producers met and exceeded the expectations of the manufacturers.  When the agency took on a new manufacturer, these reps would immediately start to fill their pipeline with opportunities and then proceed to close deals.  At sales meetings, the agency’s principles would review opportunities and, for the new reps or struggling reps, the top reps would be asked to mentor and coach the rest of the team.  The principals would say, “Listen, everyone, just do what she does!”  By mentoring and coaching the new or struggling reps, they could pull the entire team along and company revenues would grow.

In my example above, the top sales people were great examples of what the new and struggling salespeople needed to be doing to succeed.  In my case, being a new sales rep, one of the top sales producers agreed to mentor and coach me.  It took time away from his main objectives, that is selling, but he did it and I learned to do things that made him successful.

In today’s world of revenue acceleration, using data and analytics is helping the “just do what she does” approach be much more effective.  Using data from your company, and combining it with data from other companies, provides an opportunity for better sales force development decisions.  As an example, suppose you were able to analyze your sales team and really understand your sales performance?   Suppose, similar to analyzing key performance indicators, you could use data to guide your sales team to perform optimally?  Maybe the data will tell you you’re hiring for sales using your account managers as your recruiting model and asking your new salespeople to hunt for new business.

Consider how your company’s revenue acceleration efforts might look if you knew why your top salespeople perform best and could identify why your bottom sales people don’t.

Recently, I became certified as an Objective Management Group, OMG, partner associate.  OMG’s analytics are based on assessing more than 1 million sales people and 11,000 companies.  OMG analyzes nearly 100 sales attributes and uses those to compare top and bottom producers.  The figure below shows the results for a specific company and highlights the differences between top and bottom salespeople.  The top 6 represents sales people that are producers for this company and the bottom 6 are, well, not.  Notice the differences between what’s green and red.  While the tops have some reds, and might be improved, the bottoms are significantly red.  You want your bottoms to look like your tops, right?

Top Bottom Analysis

The opportunity is to remove the red results from the bottoms so all the salespeople look a lot like your top producers.  Make sense?  There’s clear ROI here.  If your top producers are each delivering $1 million in sales and there are 6, you’re getting $6 million in production compared to the bottom 6 that might be generating $3 million in revenue.  Suppose that by changing some of the reds to greens for the bottoms, you grow revenues by 30-40%.  The revenue acceleration plan results in an additional $1 million in revenue.  You want that, right?

Is a sales force evaluation the answer?  Learn more.

Contact Michael at michael.mccarthy@novationselling.com or at 980.254.2522.

Sales Plays get the sales team on message!

Novation Selling is committed to helping our clients by enabling their sales team to sell on value.  Using a customer-centric business value approach means going beyond how products and services work and operate.  Rather than having a sales force talk about features and benefits, our approach is to arm the sales team with consultative selling questions and insights that engage their prospects to say, “I didn’t think of it that way before.”

For a recent engagement we’ve worked diligently with our client to change their approach to selling.  It is amazing to see the team’s excitement when they realize the business value of their products go well beyond just the immediate justification.  After talking with some of their current customers and experts our client works with in the field, we’ve helped our client know what questions to ask their prospects.  These questions that lead to a conversation about how their products help their prospects differentiate their services.  So, now instead of trying to sell a product, our client is partnering with their customers.  The end result is our clients prospects are considering this new technology as a way to increase their revenue and competitive advantage.

We’ve tied this new program together by creating a set of sales plays that bring everyone together under the same strategy and consultative selling approach.  The sales plays follow our coaching and workshop frameworks so each aspect of the process aligns with their customer’s buying expectations.

For our client, these sales plays have the desired outcome of helping them sell value and not features.  Their sales conversations are at the business value level, providing them an opportunity to earn trust and become a partner with their customers.

This is a great example of the outcomes Novation Selling helps our clients achieve.  After all, our brand promise is, “Replacing The Status Quo with Renewed Sales Performance.”