Today, you need more leads than ever!

4 reasons you need more leads today than you used to

You probably already have a pretty good idea about your teams performance, monitoring basic sales process and metrics. You know how many leads enter in one end, and how many turn into qualified prospects, and later into deals. You are controlling your conversion rates and you are constantly trying to find ways to improve them.

Just increase the conversion rate and you will do well” is the common recipe.

Yes, increasing your conversion from lead to actual sales is of course important. But, a “conversion rate only” strategy depend on individual skills, and introduces a serious scalability problem. Why? Here are a few things to keep in mind:

 

Diminishing benefit per transaction

First, the benefit you get from every transaction is not what it used to be, especially in Software, the introduction of SaaS models, initial deals are smaller, you may find yourself with initial benefits/margin from the first contract not even covering your transaction cost. Over time and with Customer Success management, you will win it back many times – but in the meanwhile you need to finance your activity. 

 

 

B2B sales remain complex

But, you may say, a customer who used to need 5-6 months and 8 signatures to pass you an order of 100.000 Euro, today the same guy pay a subscription fee of 2.000 Euro/per month. At least one could expect the purchase decision to be easier for the customer. This is often not true. The decision to implement a software solution, is STILL associated with great risk later on in implementation and usage. 

For the customer, the main part of the actual transaction cost is not in the price, but in the implementation of new processes, adoption of new technology, the product cost over the whole lifecycle, perceived risk of cloud hosting etc. So, even if your contact could sign off on the initial contract, he or she will not take the risk without doing all the evaluation work, proofs of concept studies, and anchor the decision with his peers and managers, just like before.  

 

 

The “educated” Lead

Additionally, today your leads already come to your “shop” well educated. They have studied your offerings on the web, certainly also your competitors offerings, they understand the basic benefits of the product etc.

They find plenty of information on the web, before you even get a chance to talk to them. Even if you have got the lead through outbound activities, your leads will browse around to educate themselves before buying anything from you. This makes traditional selling even more difficult than say 20 years ago, and your transaction cost (“cost of sales”) increases.

 

Sales conversion takes sales skills

Increasing your win-rate, or conversion rate, from the leads that you have essentially depend on the skills of your sales reps. Meaning their personal skills on: how to create a buying vision, how to meet objections, manage the process… how to turn a sceptic prospect into a devoted believer. These skills take time to develop, and only a few reps will become real stars.

Long learning curve, and total dependence on your key seller(s), doesn’t really sound like a very scalable model to build your business on, does it?

 

 

Get the Lead-Machine working, and qualify well

 

You need more efficient ways of increasing sales than to just hire more and “better” sales reps:

  • Lead generation is key – build a lead strategy, get enough (online) qualified leads for your sellers. Traditional cold calling to people is dead, so you need to find other ways of reaching out. You need to create an abundance of good leads coming in. If you have few leads coming in, you risk having sales spend its days calling the same leads time after other, “loving them to death”, but… not selling anything. There is a lot of truth to what SaaS-sales gurus Aaron Ross and Jason Lemkin say in their bestseller “Predictable Revenue”: – “Lead Generation drives growth; Salespeople fulfil it”.
  • Work pipeline efficiency, rather than conversion. Get skilled at early qualification! (Or rather disqualification). It’s all in that first sales-call. If you can, specialize a group of reps for this phase, qualification, and make others good at follow through, negotiate and close the deals. Provided your lead generation phase provide you with working material, your qualifiers will dare do a real qualification, and use the right questions. See my article on Qualification and pipeline efficiency.
  • Be “data driven” – Make everything measurable – so that you actually know when you are improving and when you are not. Today there are plenty of good CRMs and marketing automation tools out there, from which you can get all kinds of statistics that help you work your efficiency.  (Also make sure you work the 100% adoption of these tools in your teams, see “love your CRM”)