How many leads do you need to reach your revenue goals? Many decision makers do not know the answer to that question, though they clearly believe that lead generation plays a key role in achieving their organization’s sales goals. After all, the more qualified leads, the more deals salespeople will close.
It all starts with planning, and the objective of this white paper is to convince decision makers of the numerous benefits of planning lead generation activities, in much the same way as planning a garden.
Planning your crops
Identify your priorities. Ideally, your lead generation plan should closely reflect your strategic plan (positioning, sales objectives, profitability goals, etc.). For example, you may analyze past activities and conclude that you have been generating many leads for product A but not enough for product B, yet product B yields higher profit margins. In other words, you need to identify the type of leads that will optimize the growth and profitability of your organization.
Define a qualified lead. Sales representatives often request more and better qualified leads from the marketing department, but they both have different understandings of what a qualified lead is. That is why the marketing department often transfers so-called “leads” to sales representatives, which from the sales point of view are more “requests for information” than true leads. Thus the need to define and communicate the definition of a qualified lead to all concerned.
Calculate how many leads you need to reach your sales goals. To do so, you need to know your sales conversion rate, or even better, your conversion rate by business line or by account representative (see table below).
|Business Line A||Business Line B|
|Target revenue goal:||1 M||Target revenue goal:||0.5 M|
|Profit margin:||20%||Profit margin:||35%|
|Target number of new customers:||10||Target number of new customers:||3|
|Conversion rate:||25%||Conversion rate:||25%|
|Target lead goal:||40||Target lead goal:||12|
|Number of leads generated directly by account representatives:||20||Number of leads generated directly by account representatives:||8|
|Number of leads resulting from marketing activities:||20||Number of leads resulting from marketing activities:||4|
Identify dependencies. A gardener needs to account for the things he or she has no control over, such as weather conditions. Similarly, decision makers need to evaluate the impact of their external (politics, economy, etc.) and internal (budget, staff, etc.) environments on their lead generating activities, and then adjust accordingly. For example, is the target industry presently booming? Or, on the contrary, is it experiencing a downturn?
Preparing the ground
Even the best gardener cannot grow tomatoes in the middle of a desert. A garden needs fertile ground. Similarly, a perfectly planned and executed marketing campaign may not generate many leads if it relies on a poor contact database. In this sense, your contacts’ database needs to be as rich as your soil.
Evaluate the relevancy and accuracy of your contact database. To be relevant, you need to ensure that your database contains not only the type of organizations you want to target, but also the right contact names. If your message is best received by IT people but the database primarily contains people who work in the finance department, you need to update your database before going any further. Ensuring that your database is always accurate is probably the toughest part of the job because it is an ongoing task, but a necessary one if you want to send customized communications. On the bright side, a good database can become a powerful competitive advantage. Just look at Amazon.com!
Improve the quality of your contact database. Implementing data validation rules will help you avoid duplications and standardize data fields (province, state, phone numbers, e-mail addresses, etc.)
Enrich the database. This is what gardeners call “enriching the soil,” and there is nothing better to accomplish this than your own compost. Though you can buy or rent contact lists, they would only provide a starting point. The best list should be home-grown, meaning that a good list does not happen overnight. It typically results from compiling and revising several lists, to which you can add account-specific information. Consider the example of an organization that specializes in Business Intelligence. This company could easily obtain a list of accounts organized by industry and revenue size, but this list would not specify if the targeted companies have a great amount of data, nor the type of database they use. That said, this kind of information could initially be obtained through a profiling initiative, which, in the end, would help the organization plan and carry out highly targeted campaigns.
Grow your contact database. The gardener who plans on being one of the top producers of tomatoes in the country but possesses only a small field may need to develop more realistic expectations since much more space would be necessary for such a high level of production. Similarly, decision makers should evaluate how many accounts and contacts they have in their database at the planning stage. How do you know if you have enough contact names? It depends on both the lead generation objectives and the lead conversion rate, which should not be confused with the response rate. For example, a marketing campaign may have an excellent response rate (5%) but if only 10% of the respondents are qualified leads, the lead conversion rate would be only 0.5%. In other words, you would need at least 200 contacts to get only one qualified lead.
A planting strategy
Good gardeners know how to space out their crops so they can produce fruits and vegetables all year long and avoid peaks and valleys.
Plan lead nurturing time. It can take months for an initial B2B request for information to actually become a qualified lead. That is why you need to take into account prospect maturing time at the planning stage. First, because you need to plan lots of demand generating activities early in the year. And second, because you need a lead nurturing plan. Just like a gardener needs to adapt to the four seasons, prospects have their own maturing times.
Seed carefully. In order to stimulate marketing responses, you need offers, or even better, an offer strategy. You can use promotional offers (discounts, free trial versions, free consultations, etc.) or informational offers (white papers, seminars, case studies, etc.) One is not better than the other, but they serve different purposes as people respond differently depending on the buying-cycle stage they are in. Such offers can be viewed as seeds that produce totally different results. For example, a white paper can be used to raise or maintain a prospect’s level of interest in a specific product or service, while a rebate may be more useful to shorten the sales cycle of sales-ready leads.
Determine your watering needs. Some plants require more water than others, not to mention that sometimes the watering schedule is actually more important than the volume of water itself. In a lead generation context, it is the frequency of communication that determines when a contact needs to be “watered.” In this view, you can identify categories of nurture leads early in the planning stage and develop a specific contact strategy for each category.
Look after the harvest. Just as a gardener relies on specific signs to determine whether the harvest will be good or not, decision-makers need to determine right from the beginning the types of measurement standards they want to track. The commonly used standards in B2B lead generation include:
- The number of leads
- The cost per lead
- The lead conversion rate (number of leads/number of marketing responses)
- The sales conversion rate (number of customer adds/number of qualified leads)
These units of measure–among others–will help you determine whether you’re on the right track or not and locate potential problems. That is, after all, the whole point of planning: to become more proactive than reactive.
The key to lead generation success
In conclusion, effective gardening is not a game of chance: you need to seed, water, look after your crops, and above all, be patient before you can actually see results. The process is quite the same for lead generation, and the analogy with gardening sheds new light on the planning process, such as the need to determine the type of lead you want and the importance of lead nurturing. By following the same steps as a gardener who carefully plans his or her garden, decision-makers are more likely to succeed in generating qualified leads. And the sooner they start, the sooner they can reap the benefits.
The great French Marshall Lyautey once asked his gardener to plant a tree. The gardener objected that the tree was slow growing and would not reach maturity for 100 years. The Marshall replied, ‘In that case, there is no time to lose; plant it this afternoon!
John F. Kennedy