The Benefits of Lead Nurturing
Your salespeople’s time is too valuable to be spent chasing cold leads or developing their own educational materials, but that does not mean these long-term leads should be dropped altogether? Statistics vary by industry, but based on our experience, with constant lead nurturing you can reasonably expect to convert at least 20% of inquiries into qualified leads within one year. But before we jump into the benefits of lead nurturing, let’s define what it really is.
What is lead nurturing?
Lead nurturing is the process of building a relationship with viable prospects until they become ready to buy.
Nurturing is commonly defined as the action of nourishing, feeding, or cultivating. Good gardeners know that producing a bountiful crop does not happen overnight, and certainly not by coincidence. From planning to pruning to picking, the best fruits are the ones that received the best care possible.
Similarly, for an initial inquiry to actually become a sales-ready lead, you need to do a lot more than just call every six to eight weeks to follow up; you need to send your viable prospects meaningful and educational content on a regular basis to help them grow. This prolonged contact not only provides useful content to your prospects, but ensures that you will be the first company that comes to mind when they are ready to buy.
We have described below Before and After scenarios as specific examples of what you can expect from lead nurturing.
More sales-ready leads
Before. You hired a telemarketing firm that had guaranteed you 500 new leads. The problem is that most of them are “early leads”. They are still in the research mode, “just looking” for possible solutions. They are certainly not ready to commit to a budget or timeline. In fact, the quality of the leads is so bad that the sales team reject rate is averaging 80%, so the 500 “leads” now look more like 100. Worse, your salespeople are so frustrated with wasting their time on cold leads, that they are now reluctant to follow up on any leads, including the good ones.
After. Marketing and sales finally agree on a common definition of what constitutes a sales-ready lead and initiate a multi-touch nurturing campaign to cultivate relationships with longer-term sales opportunities. As a result, sales people are now able to focus strictly on well-qualified prospects, without neglecting the ones that have a longer opportunity window.
Higher marketing ROI
Before. Every year you invest in various marketing initiatives to identify new leads: corporate Web site, Google AdWords, trade shows, webinars, networking, etc. When people visit your Web site, respond to one of your ads or register to an event, they indicate some level of interest for your solutions. But what if they are not ready to engage with a sales person yet? Do you just abandon them? What a waste of marketing dollars!
After. With a lead nurturing program in place, inquiries are systematically scored to determine whether they should be nurtured or discarded. The nurture leads regularly receive relevant articles and offers matching their interests and communication preferences, keeping you in the game while they research their options, and increasing your chances of doing business with them. As a result, the return on lead generation dollars is much higher after multiple contacts.
Higher productivity of your sales professionals
Before. Your sales funnel looked pretty dry, so you asked your sales person to generate her own leads. Assuming this took 2 hours of her day, the cost of asking a seasoned sales professional, whose salary is $100,000/year, to generate her own leads would be $25,000. Not to mention, the cost of forgone opportunities, which is the cost of not spending 25% of her time on activities that could generate more revenue for your organization. Multiply that by the number of sales professionals you have.
After. The beauty of lead nurturing is that you now have a process. Your pipeline is never dry because marketing is in charge of systematically cultivating the interest of early leads—the ones that visited your Web site, registered for one of your events, etc.—until they ripen into sales-ready leads. Also, nurturing viable prospects involves creating content for each stage of the sales cycle, which, in turn, can be used to measure the progression of leads through the sales cycle. For example, someone who registers for a webinar is more likely to be the in the later stages of the sales cycle, whereas someone who downloaded an evaluation guide is probably in the early stages. As a result, your sales people can prioritize lead follow-up accordingly and make the most of their time.
Maintaining top of mind awareness
Before. In the past, you ran a few ads in industry magazines, hoping that when customers would need a solution, they would think of you first. While advertising may very well increase your brand awareness, you also realized (1) that its effectiveness is hard to measure and (2) that advertising is a repetition game and that it can be cost prohibitive for a small- and mid-sized organization like yours to run three or four ads before observing any results.
After. The day you realized that lead nurturing works to stay top-of-mind is when you received an email from a prospect you had contacted months earlier. This person knew the software he was using was outdated, but he was not ready to make a change yet, let alone allocate a budget to a new solution. Not a highly qualified lead, by sales standard. Nevertheless, a few months later, that same prospect contacts you and says he is finally ready. Now—and this is how you know lead nurturing works—you scroll down to the bottom of his email and see that to contact you, he simply replied to the nurture email you had sent him three weeks ago.
Reduced opportunity leakage
Before. Every now and then, sales would get some really good sales-ready leads. The salesperson would diligently follow up, meet with the decision-maker, and even send a proposal. And then what? Nothing. It’s not like the prospect picked a competitor, it’s just that nobody made a decision, and sales, understandably, no longer wants to waste any more time with this prospect (who has the time?). So, the “good” lead is dropped from the pipeline. But, everyone is shocked, when, 18 months later, sales learns that Mr. Undecided finally picked a competitor that was not even part of the selection process at the time.
After. With a lead nurturing program in place, sales can now send the stalled leads back to marketing and monitor any activity that would suggest that the prospect is loosening of the status quo, thus reducing leakage from the sales pipeline.
Before. If your company or offering is not differentiated, it is a commodity, and commodities compete… on price.
After. Content plays a key role in lead nurturing, and the more helpful you are, by sharing ideas and best practices, the more people will perceive you as a trusted advisor, which means that they will be less sensitive to price.
Lead nurturing is a simple concept that really works, but just like in gardening and many other areas, the key to lead nurturing success is consistency and persistence.