Improving Lead Quality
by Hal Slater

What is Lead Quality?
Obviously, a quality lead is one who has his/her checkbook out and is ready to buy, right? That would be a nice measure if we could afford to wait for our buyers to get to that point. If we do, we are “sitting ducks” for any, slightly more aggressive, competitor who will step in front of us and get the sale. This is because people gradually become “ready to buy” as they gather information and resolve internal conflicts. Thus, a quality lead is one who is almost ready to buy, but not quite. This creates the opportunity for you, as a sales professional, to enter the scene and tip the scales.
The primary tools for getting people ready to buy are education and presentation. Education can be implemented in the form of presentation or marketing. A good marketing program should tell your market why they want you or your product and build a “position” in their mind for your company that reflects positive values. In other words, marketing should be used to pave the way for your sales force to focus on specific solutions to specific problems or needs.

Case study: Seismic Safety, Inc.
An established Southern California-based contractor specializing in retrofitting older dwellings to meet modern earthquake safety standards wanted to respond to the increase in demand following the Northridge earthquake in 1994. One of the challenges they faced was the thoroughness required to properly inspect and bid each job. Two approaches were tried based upon using a newsletter inserted into the major daily newspaper in highly targeted areas. The newsletter (see image) was both attention-getting and informational with only a few ads for the contractor. The ads offered free estimates without a gift premium.

 
The two sales approaches we tested were:
1) Have an experienced estimator make the sales call and perform the inspection, answering any questions and gathering information. The bid was then mailed to the prospect with an enclosed information package. This resulted in a 26% close rate (bids mailed to contracts received).
2) Train construction workers to survey the job thoroughly, answer questions and set a return appointment on their first visit. They would be overseen carefully as they prepared their bid which they would present and attempt to close on the return visit. This resulted in a 21% close rate (bids presented to contracts obtained).

 

 

  

Other limits apply
Although it would seem that the first method was simpler and more productive, it was limited by the scarcity of highly experienced estimators that could instill a lasting sense of confidence in the consumer. People like this cannot be recruited instantaneously, whenever a large quake strikes. What the test did show was that a large part of the sales process can be offset with an intelligent marketing program that supports the sales message. This approach can reduce the experience level and training required to market effectively in response to growth opportunities.
This can also help keep the company from being held hostage by sales “prima donnas” that know how dependent the organization is upon their relatively rare blend of experience and talent. Just as you cannot afford to be too dependent upon a single vendor, it is not good business to rely too much upon any single employee, including yourself!

Why we love them so much
This does not mean that you want to rely upon a team of inexperienced salespeople, either. Although I was not made aware of the profit and loss situation with Seismic Safety, Inc., I have an idea of the monthly numbers they were producing in 1994. The owner has since retired and enough time has passed that I don’t believe these rough guesses betray any private data. Team Two (the inexperienced sales people) was able to sell approximately $300,000 worth of work on 35 sales from 165 leads. The overhead, as he was frequently quick to remind me, was about $35,000 per month including printing and distributing the newsletters.

Here is the chart from the Power of 1%™ Report for Team Two that shows how much more productive Team One was. Each 1% increase in close rate is worth over $4,200 per month to the owner, so that, on the same expenses, Team One produced $21,214 ($75,214 v. $54,000) more per month than Team Two! We often lamented that we were unable to find more people with the qualifications that we needed. One factor was that in a strong market, many of the best people go into business for themselves.

All of these issues can be addressed and improved through training. Close rate, sale quality, longevity, customer satisfaction, new product integration, all of these and more can be improved by training and if you would like to know more, call (888) 883-9979