How Researching Cold Leads Makes More Money
Your salespeople can only work so many hours in a day. Following up every lead, while potentially profitable, takes time. So your team is left with the question of, how do I make the most of the time available?
The quickest, easiest way to increase the profitability of your Sales Team is to make sure they have quality leads.
What happens if you set your Lead Development Team to research the leads first? Have dedicated people to make the initial contact, find the right decision maker and qualify the needs. They can quickly throw out all the prospects on the list that make no sense. Wrong industry, wrong company size, not ready to purchase, all of these are easily avoided now. By avoiding these time wasting efforts, you can focus on closing the most viable prospects.
With the new CRM software available you can look at the closing percentage of your salespeople. Since they only have so many hours in a day that they can reach potential clients, every hour counts. Bad leads equal fewer sales which in turn is wasted payroll. If you funnel leads that are pre-qualified to your Sales Team, you increase the average close rate. For example, let’s say your product is $1,000. One of your salespeople can work 4 leads a day.
Average Close Rate % (Leads per day x Product Price)
In a perfect world it would look like 1(4 x 1,000) = $4,000. But since nobody is that good, let’s say the average is a 20% close rate.
0.2(4 x 1,000) = $800
If you have a team prequalifying leads for your salespeople, the average close rate increases. Let’s look at a conservative jump from 20% average close rate to 50%.
0.5(4 x 1,000) = $2,000
Do this 260 days a year and you are looking at a difference between bringing in $208,000 and $520,000 from our example salesperson. What do the close rates of your team look like when stuck into this formula?
The investment in building a Lead Development Team to increase the close rate of your Sales Team pays off in most high-value transactions. It also allows your Sales Team to focus on more leads per day rather than searching out their own. Back in our example, before building a Lead Generation Team, our salespeople can only work on 4 leads per day because it takes a time to find and initially qualify the prospect. If our example salesman can work even one more prospect per day, he is generating, even more, money.
0.5(5 x 1000) = $2,500
2,500 a day x 260 working days a year = $650,000
It all depends on your products, company, and processes. Quality matters. Time matters. We have so much more information about prospects easily available before calling or emailing. Having a Lead Generation Team providing your salespeople a high-quality funnel through targeting the correct needs, industries, company size, ability to purchase, and even getting to the right decision makers, allows your company to make more money from the time your salespeople have to commit.
Originally published at blog.leadware.io.