Often I see entrepreneurs or small business owners moaning about lack of “enough business”. Some are more crude – Can you get me a customer? Or, can you email our brochure to all your contacts? I try to be as polite as possible on such requests, but many are offended as to why I am not helping them! The thing is that if I am not convinced about their work, I have no choice but to gently decline. Interestingly, when I quiz them back on their sales or lead generation plan or process, their answers run on these lines:
- Attending random events (some of which have same visitors coming repeatedly or the percentage of target customers is very low)
- Calling up random people found on Twitter, Facebook, Linkedin or elsewhere on the internet
- Participated in an exhibition many months ago
Dig further and you will find that there is no specific process or periodic targets (although, boldly they show revenue targets on business plans and pitches to investors).
When I suggest the word ‘process’, it lands on them as something that is needed by large organizations. Most startups and small businesses do not use a Customer Relationship Management (CRM) tool – perhaps they do not need a CRM tool yet. However, that does not mean that they are excused from having an effective lead generation process.
If they are still around, I invite them to convert their revenue targets into a daily plan. Here is one way to do some basic calculations that are required to set-up a simple lead generation process that can be easily tracked on a spreadsheet:
[A] State your revenue target. For illustration, let us take a figure of INR 5 crores for next twelve months.
[B] Estimate the average size of an order. Say, INR 25,000.
[C] Thus, you need 200 orders to achieve your revenue targets. Taking a year as 50 weeks, this translates to 4 orders per week.
[D] In your experience, what percentage of your customer meetings or interactions lead to a confirmed order? Begin with an estimate and change as per experience. Say, 25 percent. So, for our example, you need to arrange 16 sales meetings / interactions / demos per week.
[E] What percentage of your Qualified Leads (QL) translate into (as a result of initial interaction) prospects agreeing to explore specific purchasing via demos or product-trials. A Qualified Lead is an entity that is a potential customer on paper (in terms of pre-determined parameters like business size, segment, location, etc) for your products or services. Say, 50 percent. So, you need to generate at least 32 QLs per week.
[F] Now, what percentage of your Raw Leads (RL) get converted to Qualified Leads? A Raw Lead is any valid contact details of person or organization which may or may not be interested in your products or services. Say, 10 percent. So, you need to have at least 320 fresh RLs per week or 64 RL per day (taking five working days). If you are using a tele-caller, then this is the minimum (s)he should be calling everyday. If you are using your web pages as a lead source, then this is the minimum number of users that need to submit their contact details on your landing page.
Many have liked this approach and created a spreadsheet to track this. However, soon I found out that inertia has set in and no sustained action was taken to make the process work. Some eager entrepreneurs took this discussion to next level in terms of choosing market segments, identifying ideal customers and so on. The enlightened business owners took our help to convert this into a small but robust lead generation process on lines of a state-of-the-art Balanced Scorecard framework with KPIs (Key Performance Indicators) integrated with KRAs (Key Result Areas) of promoters and staff responsible for Sales Targets.
Since I am quite lazy to keep elaborating this repeatedly, I am sharing this here publicly with all, so that, next time, when an entrepreneur rues “no business”, I simply have to share the URL of this article!
You may request a free* initial Coaching or Consultation on your Lead Generation Process by sending an email to coach@bizvidya.com
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Nice Analysis given. Quite Helpful!
Fantastic blog post; Do check Zoho CRM it is free it’s the best tool that is out there for lead generation.
Its a great article indeed. The target can be achieved if we have such kind of a concrete plan. But you may also mention how you can generate this 320 leads a week. Then this would be the perfect one .
Thanks to all for the comments and appreciation!
@Arun: Are you personally using free Zoho CRM? I would like to exchange notes with you as I was not satisfied.
@Anoop: Effective Raw Lead generation process would vary depending on the industry and the product. Yes, there is Gold in exploring that! Also, since you are associated with a CRM product, you are welcome to share your own insights in an independent article at BizVidya!
@Anoop – Here is my two pence to your query.
What is that first right email? How do I get past the gate keeper and have access to my power center? What generates enough curiosity in a prospects mind to sit up and take notice of your solution.
Some points below might be helpful:
— 85% of all sucessful prospecting needs 5 touch points
— space this activity over a period of 3-4 weeks
— Phone, Email, Phone, Phone, Email or Viceversa
— Never refer to a previous failed attempt
— We love to buy, but hate to be sold ( Avoid salesy subject lines)
— Remember “whats in it for me” is something we all look for
— do not attempt to sell in the first email or phone call. All you need is thier attention. generate enough anxiety to call for a meeting
Happy Hunting.
Bhawani