The Most Expensive Lead Generation Strategy – Is This You?
Have you delayed developing a lead generation strategy because your sales team generates their own leads? Are you concerned about adding resources that aren’t directly generating revenue? Then consider this: not having a lead generation strategy is a strategy – and it’s possibly the most expensive lead generation strategy you can choose.
How Is Doing Nothing A Strategy?
If you choose not to have a marketing team or a lead generation strategy, that doesn’t mean that your sales team simply waits for someone to arrive at the door with a signed contract in their hands. No, they are generating their own leads. They may be generated through cold calls or by following up on tips from their networks. Maybe they are still banging on doors. Maybe you get lucky and there are still one or two people out there leafing through to find your ad in the yellow pages! But truthfully, how many of your team’s cold calls actually move into the sales funnel as qualified leads? Is that time and money well spent?
Consider The Alternative
The alternative is a lead generation strategy that delivers actionable leads – not just addresses and phone numbers – to your sales team. A lead generation strategy is designed to engage your target audience with carefully crafted messages and calls to action – segmented by stakeholder – that align with the different stages of the buyer journey.
The complexity of your strategy is driven by many factors, including the complexity of the product or service your are selling, the sophistication of your audience, and your sales cycle. Your lead generation strategy has to be customized to your brand, your products or services, and the marketplace. It educates your target audience, collects information about needs and interests, and delivers warm leads who are ready to engage with your sales team. Your sales team can focus on what they do best – selling.
Compare The Costs
A lead generation strategy – whether developed and implemented internally or outsourced – requires an investment. At minimum, your need a plan, people to implement the plan, and technology to support and report on the plan. The scale of this investment will vary widely depending on the size of the market, your sales goals, and the complexity of the sale.
Again, consider the alternative. Sales is usually one of the highest paid roles in an organization. In a typical situation, there’s a base salary, plus substantial incentives based on hitting or exceeding quotas. Say you have a sales team of five who each have a $50,000 base. Each is expected to close five deals of $1 million to make their quota. Plus, every deal results in a 5% commission to the salesperson.
Now, imagine your sales team doesn’t have to do all of their own lead generation anymore. And because more of these sales processes are better qualified, each team member closes six deals instead of five. That’s an extra $5 million in revenues for the company. It’s also an extra $50,000 in income for each person on your sales team. And say your profit margin on each sale is 15%. That’s $750,000 in additional profit. What would you be willing to invest in a lead generation strategy to realize an additional $750,000 in profit? What if the quantity of warm leads allowed you to add a sixth salesperson? Or freed your sales team to close seven deals a year instead of five?
We can talk “what ifs” all day. But the bottom line is that you should carefully consider your sales and revenue goals and your growth objectives. Then calculate the cost/benefit of a carefully customized lead generation strategy – internally managed or outsourced – that delivers qualified leads and frees your sales team to sell.
Starting Small Is OK
The sophistication of marketing has increased exponentially in recent years, primarily because of technology. Individuals or small marketing teams can now do more than ever, reducing the costs for small and medium sized companies that want to add marketing or increase their marketing activity. Marketing consultants and freelance marketing professionals can manage and operate your marketing functions until you are ready to build your own infrastructure, or they can supplement your operations and add valuable expertise and experienced resources during critical times.
Starting small is OK, but starting smart is absolutely essential. For example, if you have a good database, it may be more cost-effective to implement a quality outbound demand-generation campaign. If you don’t have much of a database at all, a carefully constructed inbound campaign may make more sense. Maybe digital isn’t even your best bet. If you can’t afford to purchase a $10,000 industry report from a reputable market research company, you can still survey your current customers and urge them to have their peers respond as well. Use the survey results to identify your most effective starting point.
Accelerate Your Success
If you hire experienced sales professionals to sell your product or service, then you can accelerate your success – and theirs – by implementing a lead generation strategy. Your sales team will produce more efficiently, and your organization will be better positioned to reach its short and long-term objectives. One way or another, you’re making a choice. Why choose the most expensive strategy?