Today, you need more leads than ever!

4 reasons you need more leads now than you used to need

 

You probably already have a pretty good idea about your team’s performance by monitoring basic sales processes and metrics. You know how many leads enter in one end, and you know how many turn into qualified prospects then 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 depends 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.  With the introduction of SaaS models, initial deals are smaller, and you may find that the initial benefit/margin from the first contract doesn’t even cover your transaction costs. Over time and with Customer Success management, you will win it back many times over, but in the meantime, you need to finance your activity. 

 

B2B sales remain complex

Before, a customer would need 5-6 months and 8 signatures to pass you an order of 100,000 Euros, but today, that same guy pays a subscription fee of 2,000 Euros/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, the 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, as well as 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 gotten 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 depends on the skills of your sales reps, meaning their personal skills on how to create a buying vision, how to meet objections, how to manage the process, how to turn a sceptic prospect into a devoted believer, etc. These skills take time to develop, and only a few reps will become real stars.

A 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 those in sales spending their days calling the same leads over and over, “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, negotiating, and closing the deals. Provided your lead generation phase provides you with working material, your qualifiers will do a real qualification, and use the right questions. See my article on ”Qualification and Pipeline Efficiency.”
• Be “data driven” – Make everything measurable so 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.”)