Misconception #1: I need more leads
In sales, there is a belief that more is better. Simple math suggests that doubling your leads will double your sales. Theoretically, yes. Of course, doing so is a resource-intensive exercise. For sales teams to extract more value out of their existing assets and initiatives, they need to work smarter, not harder.
At the top of your sales funnel, you may notice that many inbound leads do not progress beyond the first or second stages of the sales process. Sales expert Ken Krogue insists that this is because an alarming number of sales leads are often ignored. Thus, sales teams do not necessarily need more sales leads; instead, they should make a more conscious effort to engage existing leads. For Forbes, he writes, “Companies waste 71 per cent of Internet leads.”
The failure here is sales teams do not respond to leads fast enough, if at all. Krogue notes, “In fact, they take 46 hours and 53 minutes to pick up the phone and respond to a lead. And the sales rep who does call only makes 1.3 call attempts before giving up and moving on.” He adds, “Our own in-house research shows only 27 per cent of leads ever get contacted. Yet with a combination of awareness, best practices, and technology, companies can contact around 92 per cent of leads. An increase from 27 per cent to 92 per cent is an increase of 341 per cent lift in results just by responding immediately and persistently to leads.”
Salespeople should be quick to connect with new leads. Research shows that “firms that tried to contact potential customers within an hour of receiving a query were nearly seven times as likely to qualify the lead (which we defined as having a meaningful conversation with a key decision maker) as those that tried to contact the customer even an hour later—and more than 60 times as likely as companies that waited 24 hours or longer.” To close the gap between the number of leads generated and deals closed, salespeople should aim to respond to new leads as soon as they come in.
Misconception #2: My overall lead-to-close ratio determines my success
Your overall lead-to-close ratio may be deceiving. Although you may improve your sales performance with each change you make to your sales process—such as shortening your average lead response time—a more strategic approach to sales funnel optimization includes segmenting your funnel by lead source.
The 2014 B2B Sales Benchmarks report found that among B2B businesses, customers and employees referred the highest quality leads. The report’s analysis states that customer and employee referrals had a 3.63 per cent lead-to-deal conversion rate. By comparison, website leads had a 1.55 per cent lead-to-deal conversion rate. Social media leads were only 1.47 per cent likely to convert to sales. Paid search leads, sales-generated leads, and marketing leads each had less than a one per cent conversion rate.
Clearly, customers from different channels respond differently to your offer. So, to better understand how well your own sales funnel performs with leads from unique sources, Yaniv Masjedi suggests, “Take a minute to write down your sources for sales leads. Maybe you run regular Google ad campaigns, Twitter ad campaigns, and email marketing initiatives, or attend in-person networking events. Once you have your list, zero in on each strategy and how it is producing for you.”
Masjedi illustrates his point with two examples:
- “Let's say you receive 100 leads from one source. You connect with 30 of those leads and 40 per cent of them convert. For many companies, those numbers would prove the source exceptionally valuable.”
- “Conversely, another source produces 75 leads and only five of them end up closing. That means that you and your team spent time with dead 70 leads. The return on your time investment doesn’t add up to the first example in this case.”
Then, he explains, “In order to be productive in sales, it is vital to track the sources of your best and most successful leads. Understand the time you spend connecting with a lead and eventually closing the deal. Track this effort and the success and failure that comes from each lead source.” This more targeted approach to sales funnel management and optimization may allow you to more strategically allocate your time and effort.
By segmenting your funnel by lead source, you identify which channels drive prospects that are most likely to convert into a sale.
Find the Most Successful Sources for Your Leads
- Salespeople are inclined to try everything to succeed
- Don’t stretch yourself too thin
- Avoid under-performing strategies
- Focus on leads that are closing—where are they coming from?
- Let the underachieving sources drop off
- Track important data
- The sources of your best and most successful leads
- The time you spend connecting with a lead
- How long it takes to close the deal
- Monitor this effort and the success and failure that comes from each lead source