Sales Intelligentsia

How Online Lead Generation Works and How To Optimize It

The union of sales and marketing is sometimes a tumultuous one. Marketing works to build brand awareness which, in turn, should make it easier to get in the door for the sales team. Marketing also does the first step in the sales cycle when they build an effective lead generation process, one that generates qualified, motivated leads. Unfortunately, all too often the hand-off of those leads from marketing to sales is bungled and the cost of that bungling is very high.

When we plan an online lead gen program for a client, it’s our preference to be compensated on a per lead basis. The typical situation has the client paying an initial upfront set-up fee which is reimbursed in the form of a number of leads that offset that cost. After the set-up fee is recouped, each lead is purchased by the client and that purchase price is their only financial exposure going forward. For this to work for both parties there are a number of issues to consider:

• Both parties must agree on exactly what constitutes a ‘qualified lead’. This is critical because you cannot in hindsight devalue a lead because of closing ratio, etc. There is a hard hand-off from the marketing group to the sales group and the criteria you agree on determines when that hand-off takes place. If we mutually determine that a lead is a fully-completed online form requesting literature (for example) then the client agrees to pay for that lead, regardless of their future success in closing it. That’s step one.
• The reason for step one is that I, as the marketer, have no control over what the sales group does with that lead. So step two is an understanding that before we start a lead gen program, the sales group is prepared to act upon those leads while they are fresh. This means a good functional CRM system for tracking the lead, a timing system that ensures it is acted upon ASAP because leads are perishable fruit, many declining in value by the minute, and real time feedback to the marketing team regarding which leads are good and which are not so they can fine-tune their processes.

Even if all of your marketing is done in-house, I’d recommend considering building a relationship between marketing and sales that works like the one described above. Sales should have a budget for ‘buying’ leads from marketing and marketing should set their ‘price’ for those leads based on what it costs them to generate the lead and how much a highly qualified lead is worth to sales. i.e., a market value. Why?

Let’s look at an example. A reverse mortgage company hires an ad agency to develop an advertising program designed to generate leads. They produce a video that is offered for free both online and on TV for anyone who completes a form or calls a number to request the video. A completed form or phone request is a lead. The agency, being traditionalists, don’t want to be comped per lead, they want their hourly production rate. This is bad because no one is forced to justify their costs on a per lead basis.

In this scenario, I come in and ask the client how much they are paying for the lead vs. what it is actually worth to them. The inefficiencies of the agency model mean the leads are costing $100/each (these are round numbers) because of very high production and media costs. The target price, based on ROI, should be closer to $40/each. If the marketers are being compensated based on performance they will have to choose the most efficient medium rather than that which they are comfortable with. In fairness to both sides, the true price of a good lead may be higher- testing is needed to determine that.

No matter how much you pay for a lead, if sales doesn’t have a very strong process for responding to that lead it quickly becomes worthless. My brother, when he owned a high-end kitchen business, told me that the number one reason he beat others in a competitive bidding situation was the speed of his response, not his price. Knowing this he made certain that every inquiry got addressed ASAP.

These days, customers expect a fast response, often in minutes. There is no excuse in a real time online world to not have someone in sales, even an admin, not make a call or send an email as soon as a lead appears. Very often this will mean an appointment on the spot, greatly enhancing the value of that lead.

If you’re interested in an analysis of your lead generation program or the creation of one, we can be reached via the Supernatural Agency corporate site.

Welcome to Sales Intelligentsia, everything successful in sales management

We’ve been involved in selling in one form or another for over twenty years, including everything from car sales to major technology sales, sales management and even writing sales books and training materials. We designed comp plans, recruited sales teams, made those cold calls and closed the deal over and over again. Sales Intelligentsia is about intelligent selling- no hammering, no pushing, no dirty tricks; just successful selling that builds your career, grows your business and improves the lives of your customers.

This blog is for business owners (you have to be a superlative seller to succeed in your own business, no exceptions), beginning salespeople, sales managers, experienced old hands looking for a little edge sharpening and even marketing people- because if you don’t generate leads, your sales team can’t bring in the business.

We’re going to review books, sales systems, sites and training programs (if you have one Contact us for a review), we’re going to tell stories, offer tips and shortcuts, help with elevator speeches and scripts, deal out some motivation and talk about money and comp planning. In short, everything related to sales of all kinds.

Stay tuned, we’re going to be giving you something new every day.