In today's economy with ever tightening marketing budgets, many companies are throwing their precious few marketing dollars into one marketing basket—Lead Generation. While this "all-in-one basket" approach isn't recommended, we do recognize the importance of sales lead generation during these times. Investing in a strong direct marketing program is critical to both short-term AND long-term success, and it must be well planned.
To help you make sense of it all, consider the following tools and infrastructure to enhance your lead generation success:
- Prioritize and Define Your Objectives. Begin by defining your higher-level business objectives (such as revenue goals, ROI expectations, etc.), followed by your campaign objectives (expected number of leads generated, quality of leads obtained, etc.), and lastly outline your tactical objectives (schedule, budget, etc.). By defining these goals from the outset, you are more likely to create a campaign that meets your expectations. Too often companies embark upon campaigns that have no quantifiable goals in mind and then later wonder why the campaign was not "successful."
- Select Appropriate Direct Marketing Vehicles. Direct marketing vehicles are not "one size fits all." In all actuality, a lead generation campaign is more effective as a series of direct marketing activities working in concert and designed to reach your audience over several mediums, creating equity with your brand and current offer. What follows are three steps to take when selecting your direct marketing vehicles.
- A targeted list of 10,000 contacts with an average lead generation cost of $1.00 per lead
- A response rate of 4% (conservative average for a well planned and executed campaign of multiple vehicles)
- A close rate of 25%
- Create a lead-management system. Few companies succeed in turning prospects into customers without the help of a structured lead-management system, which should include telemarketing. Studies and experience have found that sales force follow-up rates on leads nearly quadruple—from 10 percent to 39 percent—when a structured lead-management system is put in place.
- Develop a Response Mechanism. Capitalize on the generated market interest produced by your campaigns. Whether it’s a dedicated phone number, website, or email address, always have a response mechanism in place prior to launching your campaigns. Make sure that your sales team is then in direct line of the response mechanism to handle all leads. A simple way to increase the success of a campaign is to respond to customer inquiries, process requests, and of course be there to take their orders.
- Maintain a clean database. While it sounds simple and very obvious, many companies do not diligently process requests to be removed from their mailing lists, undeliverable e-mails, update forwarded addresses, and worse still, many do not check for duplicate records. By NOT performing routine database maintenance, you run the risk of having your database populated with “cold,” or “unqualified” leads, which unfortunately will add to the cost and possible failure of future campaigns. These costs can be added in a variety of ways including, but by no means limited to, distribution costs, print costs, or costs per lead. You want to maximize your marketing dollars and your database by targeting only the most valid, accurate, and qualified leads.
A. Determine Your Message. Once your goals are in place, you need to determine what message and/or call to action you want to send to your prospects. Keep your message simple and clear. This is not the time to write a dissertation. And, don't overcomplicate what you're asking your prospect to do—keep it one key message and one call to action. Of course you want to make sure that the direct marketing vehicles you select can and will clearly communicate this message and in the end prompt the desired response.
B. Compare Response Rates. Keep in mind that response rates can vary significantly and rely heavily on your offer, the targeted nature and quality of the list, the creativity of the design and message, the timing of the campaign, the industry itself, etc. The following is a comparison of typical direct marketing vehicles and the industry average response rates they can generate.
C. Estimate Your Return on Investment (ROI). More often than not, companies will send out a postcard to 15,000 leads and then are shocked to realize that it only generated an additional $2,000.00 in sales. Analyzing your cost per lead and cost per sale ahead of time will help you further determine which mixture of direct marketing vehicles will contribute to the overall achievement of the bottom-line goals.
With this in mind, a well-planned and complete lead generation system (one that works with email, direct mail, AND telemarketing) would cost on average between $.76-$1.51 per outbound (where each outbound included one email, one direct mail, and telemarketing follow-up), but would yield much larger conversion to sales results.
As an example of cost per sales analysis, assume:
You would yield 400 leads at a campaign cost of $25 per qualified lead and $100 per sale. The cost per lead and cost per sale vary widely dependent on quantity and quality of the list and your ability to close the deal, but this gives you an ROI model as a starting point. You would of course vary the numbers as you get historical data with each outbound.
A good lead generation plan allows you to design effective lead generation campaigns that will in the end achieve your desired business goals.
This article is brought to you by Go-To-Market Strategies, a resource center for sales and marketing professionals and business leaders. www.gtms-inc.com contains practical, real-world articles, templates, and tools to mentor and support the experienced and inexperienced alike. Integrate the magic of marketing with science of sales!