A healthy sales pipeline is crucial to predictable and sustainable growth. If leads aren’t consistently being generated, even during good times, it puts a tremendous strain on the business.
This is precisely why we begin with identifying appropriate lead generation tactics when developing an online marketing strategy. How are we going to awareness and website traffic that will ultimately turn into potential sales opportunities.
Businesses must invest in the right lead generation tactics to get an acceptable return on marketing investment. To make certain this happens, we need to answer some fundamental questions before we start spending our hard earned money.
Firstly, how many qualified leads do we have to generate to meet our growth objectives. If we’re not sure, how can we possibly develop appropriate leads generation tactics?
Calculating the number of leads a business requires is simple math – an example:
|Forecasted Annual Revenue||$100,000|
|Average Sales Size||$10,000|
|Number of Sales Required||10|
|Number of Qualified Leads Required||100|
|Number of Leads Required Per Month||8-9|
In this case, our tactics must produce 8-9 quality leads per month. The key of course is to make sure this happens.
A cautionary note – the conversion rate must be realistic. Don’t make the mistake of over-estimating your close rate – we often find they’re not nearly as high as people believe. In so doing, you risk under-estimating the number of leads you’ll require to meet your growth objectives. If your actual close rate is higher, which it will be over time, then it’s a bonus.
The second question you must answer is where does your typical prospect go to find companies like yours. For most businesses, you can put the internet searches at or near the top of this list. This calls for a well thought out and executed online marketing strategy that includes search engine optimization, social media and online/social advertising. This isn’t to suggest that more traditional means of lead generation such as personal and business networks, trade shows, industry publications, and targeted advertising. A combination of online and off-line lead generation tactics that work seamlessly together is often the best approach.
The next question to ask is whether your typical prospect is actively seeking your products or services? If not, it could be for one of two reasons;
- because they’ve already got what you sell and perceive they’re satisfied, or
- because they don’t know a viable solution exists.
Generating qualified opportunities from prospects that aren’t looking for a solution is a different challenge than generating leads from prospects who are – you need to understand this difference.
You must have a sense of how your direct competitors (in particular your best competitor) are generating leads, and in particular how they rank with search engines and how visible they are online.
Never lose sight of the objective – to generate, at minimum, the number of qualified leads required to achieve your growth objectives. You want to accomplish this using the minimal number of tactics and spending the least amount of money.
Answering these questions is an important starting point in understanding which lead generation tactics you should employ. If you don’t, you run the risk of spending money and not producing acceptable results.
We’ve seen this phenomenon many times, and it’s one of the single biggest mistakes businesses make when it comes to marketing.
Once you’ve gained this insight, you must develop a first cut, twelve month budget. This is to determine how much you’re prepared to invest in lead generation tactics. Depending on the type of business you operate, and where you are from a business development standpoint, this budget could range from 1%-15% of forecasted revenues.
You have to think about this budgeted amount in investment terms – this is the investment required to consistently generate enough opportunities to take the business to the next level.
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