When it comes to lead generation, most people just think they want more than they have. In fact, most of what’s written on the subject begins and ends with tactics for increasing lead generation, and I think it’s simply the wrong way to approach the discussion of business building because it leaves so many parts of the equation out of consideration.
To me it’s a lot like asking what you should wear to a party and concluding that you just want to look nice without factoring anything about the occasion, setting, weather or guests.
In fact, I believe that your inbound marketing and lead generation efforts can and should be defined in a manner that lets you to pin an exact number of “leads needed” each month based on many, many factors before you ever start a discussion about increased lead generation.
Now, in a way this is a bit of a trick, because you can’t find an answer to how many leads you need without a thorough analysis of every aspect of your marketing. But that’s the point.
I’ve worked with clients who were so hungry for more leads they didn't realize they actually had all the leads they needed. The problem often lies not with the number of leads, but rather with lead conversion or targeting. I remember the curious look a client gave me when during a quarterly meeting when we revealed that leads were down 23 percent and sales were up 18 percent. “How could that be?"
Inbound Marketing and Lead-Generation Measurement
The quest for more leads needs to start with the quest for more revenue and work backwards in an effort to pin an exact lead generation number.
Revenue goal. Determine how much revenue you must have for the month based on your annual growth plan. If you don’t have these numbers, we might be getting to the heart of why “more leads” seems to be the issue.
New customers multiplied by revenue. Once you have a revenue goal, you can project how many new customers you need each this month when you can factor what an average new customer of sale is worth.
Percentage of leads converted. Here’s where the rubber meets the road. Your lead-generation program hinges on an absolute to-the-penny understanding of how many leads, visitors, traffic, sales presentations—or whatever a lead looks like to your organization—turn into customers or buyers.
This item is the bottleneck for most business, but it’s also the greatest opportunity. When you measure your lead-conversion percentage precisely you can start to test and tweak the elements that move this number in a positive direction.
Moving your lead-conversion percentage from 2 percent to 4 percent can double your business with no additional leads. Can you see why this is the most crucial and fragile number in the entire equation?
The path to greater lead conversion starts with an analysis of marketing touchpoints—every single way your business does or should come into contact with your prospects and customers.
Leads needed. By using the elements discussed above, you can start to develop a precise target number of leads you need to generate. There’s something very powerful about stating that you need 73 qualified leads each month in order to meet your goals.
This takes the undefined “more leads” and turns it into a tangible target from which you can design campaigns, attach precise budgets and measure day in and day out.
John Jantsch is a marketing consultant, speaker and author of Duct Tape Marketing and The Referral Engine and the founder of the Duct Tape Marketing Consultant Network.
Learn more in OPEN Forum's Sales Check-In 2012 series.
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