How Do You Generate Leads?
Looking for Love in all the Wrong Places?
Finding the ideal prospect can feel a bit like looking for love. Where do you look? What strategy do you use? How do you sort through the reluctant ones to find the willing ones?
As I thought about lead generation, I thought about how the young people in our firm go about dating, albeit, it was a long time ago for me. Many use the bar scene as their strategy. They get a list of numbers, pick up the phone, and start calling. They collect a few “qualified leads” on a napkin from marketing, thinking these could be love connections or solid leads.
As salespeople exhaust their lead list, they begin to think, maybe I should have used the church picnic list instead.
While bombarded by TV commercials one evening, I’m thinking, maybe there’s a better way. Not only has selling changed over the years, but dating has also changed. I’ve met many people, now happily married, who tell me they met online.
Learn from Match.com
Taking a proven strategy like Match.com, one could start his search with an ideal customer/client profile. Whom would your dream date be? What qualities or characteristics would your ideal customer/client have to build a long-term relationship? What are her needs and how can you satisfy them?
When you’re selective with potential dates, you can yield long-term relationship dividends. So, it is with scoring and grading business leads; you can prevent wasted opportunities that come from pursuing prospects that do not measure up to your ideal customer/client. Have you ever sold a prospect, and then wished you didn’t have him as a client?
The Ideal Customer/Client Profile
Many sales methodologies and customer relationship management (CRM) systems employ the match.com process; they create profiles and assign a scoring and grading system to identify how prospects match-up to your ideal. Of course, your company must clarify and agree on the type of customer/client you want to attract.
Some companies waste precious time chasing prospects they don’t want. One of my clients had a pipeline full of prospects, all jammed in the middle of the funnel, costing the company thousands of dollars in resources, only to face a slew of no-decisions. After outlining an ideal client profile, my client justifiably removed 36 percent of so-called prospects from the pipeline, improving its closing ratio by an amazing 86 percent.
Every salesperson I know, no matter what level of success he or she has enjoyed, works up to one-third of poor prospects at any given moment. These are near-impossible prospects to close and, if ever closed, they will eventually become liabilities to the company.
Are you surprised by the one-third figure? Take a look at your pipeline right now. Be honest with your assessment. Do you see the one-third?
I suggest you develop and use an Ideal Customer/Client Profile. The following questions will get you started on developing the profile:
- What size company or account do you prefer to work on?
- Is there a geographic area you would prefer?
- In which industry verticals do these companies operate?
- What are the most likely job titles of persons making the buying decisions?
- What other company positions are impacted or involved in the buying decision?
While these questions lead to demographic information, we teach in Strategic Selling® to examine the psychographics, as well, such as:
- Prospect values input from outside advisors
- Prospect is process driven, like our firm
- Prospect’s attitudes toward customers, suppliers, employees, and other stakeholders
- Prospect is open to new ideas
- Prospect exhibits high ethical standards
Armed with a clearly defined profile of your ideal customer/client, you can determine which lead generation strategies work best for you. In doing so, you will improve the effectiveness of all of your marketing initiatives.
Your profile also gives you a tool to measure opportunities in your pipeline. Then you can decide the level of resources to deploy on each opportunity matched to the ideal.
As you review leads, both inbound and outbound, and opportunities move through your pipeline, grade them by how well they fit your ideal customer profile. This effort will help you prioritize your activity and resources.
The grading could be A, B, C and D, or it could be a plus 5 to a minus 5 depending on the match. As an example, if a company is process driven, and that is one of your criteria, you could rate them +5 or +4 in alignment.
While grading is based on explicit, objective information on a prospect, scoring is based on actions taken by the prospect. Lead and opportunity scoring add points for every action a prospect performs or every criterion met.
Many companies seeking to improve predictability of new sales opportunities adopt a scorecard process, as part of best-practices selling. McKesson, a multi-billion-dollar pharmaceutical company, created a scorecard that gives salespeople the ability to assign a score to each deal. The score changes over time as more information about the prospect is learned.
To advance a deal, the rep must obtain the right information about the prospect. If not, the deal stalls and the rep must walk away. The beauty of the scorecard is that it subjects every deal to ongoing evaluation to ensure well-deployed resources.Here you would add points. To do this correctly, you need to spend time with the team, using someone to facilitate the process and identify characteristics of the ideal customer client.
Next, look at deals won and deals lost and determine what was important and weigh in a scoring system. In my experience with this exercise in my firm, I have learned a score of 75 or less likely ends up in no-decision.
The Miller Heiman system is excellent for coaching your sales reps; they see progress as they take action and re-score. Best of all, the system is adaptable to most CRM systems like Microsoft, Salesforce et al.
The graphic in the McKesson study provides an overview of how the firm uses the scorecard throughout the sales process to make resource allocations.
Box 1 – Like most sales organizations, McKesson prescreens opportunities for a potential fit. From this initial screen, the account manager creates an initial score for the prospect by completing the scorecard to the extent possible in advance of engaging the prospect. While at many companies, the formal evaluation process stops here, it represents only the starting place for McKesson.
Box 2 – For the rep to progress the deal to the next stage (and commit serious sales-organization resources to the pursuit of the deal), the score must continue to improve. On the other hand, in typical sales processes, account managers can continue to pursue all deals indefinitely until they run out of gas.
Box 3 – To get the score to improve, account managers must obtain critical information from the prospect. McKesson determines the information it wants account managers to collect by analyzing past deal successes. So for example, if an account manager finds that the prospect is dissatisfied with its current supplier, the score can go up. If either, 1) the account manager doesn’t know whether the prospect is happy with its current supplier; or 2) the prospect is pleased with the current supplier, and then the prospect score cannot go up based on that attribute.
Box 4 – As sales progress through the pipeline, account managers can make decisions about how best to allocate resources. Scores that are low, despite the existence of a great deal of prospect information, can be shot or back-burnered while you pursue high-scoring opportunities more vigorously.
Unlike systems intended to monitor sales force performance, this system is intended to improve outcomes based on proven success factors, thus increasing the motivation of account managers to enter key data.
Box 5 – Finally, the scorecard provides a tool for managers to coach their staff. Given greater visibility into the potential value of deals in the pipeline (and likelihood of fruition), managers can give better guidance regarding deal pursuit.
In keeping with best practices, Miller Heiman developed a Funnel ScoreCard® shown above. It addresses key challenges facing sales leaders such as:
- Absence of a well-defined methodology for effective prospecting and selling
- Insufficient flow of new sales calls and qualified opportunities to the sales funnel
- Ability to replicate best practices of top performers
- Access to a useful coaching tool for sales leaders
If you’re willing to abandon the old bar-hopping method of lead generation and concentrate on quality over quantity, you will soon discover the Funnel Scorecard and McKesson practice makes the most of your marketing and sales resources, no matter how limited.
By creating an informed and consistent means of grading and scoring your prospects, coupled with a fair and systematic method of lead assignment, you will have taken the first big step toward improving sales performance.
You’ll also find augmenting your prospect data with information from outside sources via connectors greatly enhances the quality of leads passed to your sales team; the nurturing process through your sales funnel improves, as well. Then you add a smart marketing automation solution with appropriate tools, and your lead generation process becomes near seamless.
So, if you’d rather not be an Urban Cowboy, looking for leads in all the wrong places, then start grading and scoring your leads against a smart system, like McKesson. I promise, your luck’s about to change.
See you on the upside,
For more information, go to www.pleinairestrategies.com
Or call William L. MacDonald in San Diego at PleinAire Strategies LLC at 760.340.4277 or 213.598.4700