Instead, most sales pros start with a list of leads from marketing, most of which are useless.
Research shows that most such lists have 1 qualified lead (that converts to a customer) for every 30 duds.
Hey, no wonder so many sales pros hate cold calling.
This post explains how to take a list of leads and prioritize them -- in a way that's customized to YOU -- so that YOU know which are the hot leads for the way that YOU sell.
And it shows you how to get those leads without spending big money on complicated lead generation software.
Sound useful? You bet.
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Note: This post is very loosely based on a conversation with Tom Roth, president of the global solutions group at Wilson Learning. The lead scoring methodology is my own invention.
Illustrations by Christos Georghiou
It's a common misconception that prospecting for new customers means opening the floodgates to new opportunities. Marketing supplies Sales with massive lists of potential customers, which the sales reps contact en masse, hoping to generate new business.
However, the success rate of such prospecting blitzes is lousy, because neither Marketing nor Sales has done the necessary research to determine whether the list contains real prospects who actually might buy.
Prospecting in this manner is not only non-productive in terms of generating sales, it's a real morale killer. When a sales rep encounters "prospect" after "prospect" without making a sale, it's all too easy for the rep to start questioning he or she is skilled or whether the offering is up to snuff.
The emotional grind of failure after failure is why most sales reps would rather do almost anything else than prospect for new customers.
Therefore, your first step is to TURN OFF THE SPIGOT. Stop trying to close leads that aren't hot. Instead, spend your time reading the rest of this post, and then taking the actions that it recommends.
DON'T WASTE YOUR TIME COLD CALLING A DUD LIST OF LEADS.
There's a better way... and here's how to do it...
It's silly to talk about hot leads if you don't have any idea what kind of lead might be actually be hot. The more effort you spend in defining a hot lead, the easier it will be to recognize them when you see them. So let's start with the basics.
There are three levels of sales leads, each of which is more select than the level below. At the bottom are undifferentiated leads -- the "spigot" leads that we decided to ignore in Step #1.
Among those undifferentiated leads will be some qualified leads -- leads that are potential customers.
Among these qualified leads will be the hot leads -- these are the leads that are will be easiest for you, personally, to close.
Therefore, to discover the hot leads, you must first define what constitutes a qualified lead. Here's how:
- Define your target industries. With any product there is a natural set of industries which are most likely to need use that product. Winnow down your target industries to the ones that both have money to spend and are likely to spend it on your product or services. The result should be one or two industries. If the number is greater than that, continue to eliminate industries until you get down to less than three.
- Define your target job titles. With any product there is a natural buyer who is the most likely to make a purchasing decision. Winnow down your target job titles to those that have the ability to purchase (or greatly influence purchase) your product or service. The result should be one to three job titles. If the number is greater than that, continue to eliminate job titles until you get down to less than four.
- Define your target geography. In many cases, you'll have already been assigned a territory. However, within that territory there will may be areas where prospects are more likely to buy your offering than others. For instance, if a competitor has a large facility in one area, that area is likely to be less desirable, since they'll likely have the inside track.
- Define your "trigger" events. Trigger events are circumstances that make it more likely that a customer will buy from you. For example, if you sell management consulting, a trigger event might be a customer announcement of a management change. Similarly, if you sell supply chain software, a trigger event might be the announcement of a merger.
However, you still don't know what constitutes a hot lead. For that you need the next step...
A hot lead is a lead that will be easy for YOU to close. Not your sales manager. Not the guy at the next desk. YOU.
So now you're going to build a lead scoring metric that's customized for you.
To do this, answer the following questions according to this scale:
2 Very important
1 Somewhat important
- ___ When you're selling, how important is the target industry? (Example: if you've got a background in a particular target industry, then it may be important to you.)
- ___ When you're selling, how important is the job title? (Example: if you've got experience selling at a particular level, then it may be important to you.
- ___ When you're selling, how important is the geography? (Example: if your selling style is strongest in a face-to-face meeting, you need nearby prospects.)
- ___ When you're selling, how important is a trigger event? (Example: if you've got specific experience helping firms with mergers, a merger might be important.)
Go back to your list of undifferentiated leads. Cross out any lead that is 1) outside your target market, 2) outside your target job title, 3) outside your target geography.
For the leads that are left, do a quick Google News search on the trigger event(s) that are important to your offering. Do a quick scan of the first page of results.
If you do not find a trigger event, do NOT cross it out; simply note whether or not you found one (example: draw a star next to each lead that had a trigger event).
Now, go through the remaining leads that you have not crossed out. For each one, fill out the following form:
- ___ Enter your priority score for the industry.
- ___ Enter your priority score for the job title.
- ___ Enter your priority score for the geography.
- ___ Enter your priority score for the triggers ("0" if no trigger found.)
- ___ Have you sold into this industry in the past? (1 for Yes, 0 for No.)
- ___ Is there a reference account in this industry? (1 for Yes, 0 for No.)
- ___ Have you personally sold to this prospect? (2 for Yes, 0 for No.)
Now make your calls starting with the leads that scored the highest. I GUARANTEE you'll get a much higher conversion rate than you were getting when you were trying to drink from the spigot.
You're not quite done yet, though. To really get the hot lead, you need the final step...
While you're calling, you need to continually monitor the prospecting effort to determine whether your conversion rate.
Your goal is to have at least every 10 leads generate at least one actual paying customer. If you don't achieve this ratio, then you'll need to make mid-course corrections.
In most cases, the problem will lie in your list, which probably hasn't been winnowed down far enough. The way to correct this is to fine-tune your target even further.
If you still don't achieve an appropriate ratio, you'll need to additional research to confirm that your targets make sense, and that your messaging works.
The best way to do this is to meet, formally or informally, with a few of suspects to better tune your list and your messaging to the members of that list.
- STEP #1: Turn Off the Spigot
- STEP #2: Define a Qualified Lead
- STEP #3: Create a Lead Scoring Metric
- STEP #4: Generate Your List of Hot Leads
- STEP #5: Make Your Calls
- STEP #6: Refine Your Model
Here are two essential sales machine sales tools that may help you with this process:
- A Foolproof Cold Calling Script -- how to position a cold call so that you're more likely to have a real conversation with a prospect.
- The Ultimate Cold Calling Tool -- how to quickly answer the inevitable objections that prospects surface when contacted by phone.
READERS: Anybody who creates and posts a spreadsheet with the lead scoring formula in it, gets everyone else's undying gratitude!