MoneyWatch

Quiz: The Best Lead Generation Method?

By Geoffrey James

Updated on: February 24, 2010 / 12:04 AM EST / MoneyWatch

Marketing's most important job (and, some believe, its ONLY job) is lead generation. It's so important that when the marketing group is doing its traditional strategic marketing navel gazing, the sales team has to do marketing's job for them! Since it's so important, and SOMEBODY is going to have to do it, it's probably important to know...

CLICK for my humble opinion Â» The correct answer, by far, is Referrals.
And that holds true regardless of whether you're selling B2B or B2C.

Let's talk B2B first. The expert here is Joanne Black. She recently conducted a survey during one of her webinars that was telling. Attendees identified the two biggest sales challenges they face were:

Getting the meeting at the level that counts (58%)
Converting prospects to customers (47%)

Well, nothing very surprising there. However, the attendees also communicated that when they receive a qualified referral, almost all report securing a new client more than 50 percent of the time. In fact, a quarter of the respondents said that they secured a new client from a referral more than 90 percent of the time.

Now, this survey was hardly scientific, but it reflects what I've heard from numerous people -- and from what I've seen in many selling situations. According to Joanne, the reasons that referrals work so well for lead generation is that:

The prospect is "pre-sold" in the sense that the prospect expects the call.
The sales rep has instant credibility because they've been recommended by the prospect's peer.
The resulting trust shortens the sales processes and makes competition less threatening.

The overall reason for the effectiveness of referrals is that people listen to their peers. In fact, I've seen studies showing that the opinion of one's peers is the ONLY thing that people believe any more.

By the way, be sure that you understand what's a real referral. According to Joanne, a "qualified sales referral" is when you have the introduction from someone your prospect trusts who's willing to give you a great recommendation-by phone, e-mail or in person.

Other forms of lead generation -- advertising, direct mail and website -- are current suffering from rampant information overload.

In a way, of course, the poll question is ingenuous because advertising, direct mail and websites are ways to get contact names for cold-calling.

In my view, cold-calling gets a bad rap because people hate doing it so much. It's important to remember that the skills required for cold-calling are EXACTLY the same as the skills required to correctly utilize a referral.

The only difference is that, with a referral, the wheels are greased. You STILL have to prove yourself in the first 30 seconds and move the conversations forward into lead qualification. That's why I think you're crazy if you don't do cold calling.

Cold calling is the equivalent of the methods that medieval swordsmen used to train themselves. They'd use swords that weighed 3 times as much as their tournament sword so that, when they actually competed, their tournament sword would feel as light as a toothpick.

Same thing with cold calling vis-a-vis referral. If you can get qualified leads with cold calling, you should be able to work referrals like a champ!

Even so, there's no question in my mind that referral selling is the most likely to pay off with qualified leads.

READERS: Anyone care to argue the point.