Practical Benefits of Using a Professional Lead Generation Partner
Previously in our series on creating internal energy via new opportunities, we have looked at a range of options to help sustain that vigour in the team, while also examining the potential morale damaging pitfalls of forcing your sales team into standard processes like cold calling. In this, the final instalment, we discuss the benefits of using a sales lead generation company.
A few assumptions first
Sales hit rates vary from industry to industry. However, for the sake of this article, we will take an average and work backwards. Let’s assume that one deal for the business will be won from every three qualified opportunities and each of those opportunities will require around 2 to 3 leads each. Working from that, we can then estimate that even when working with the most experienced salespeople, you are still going to need between 6 and 9 leads to generate just one new deal.
Incidentally, your hit rates in existing accounts should be closer to 3 to 4 leads required, which merely underlines the benefits of building a good base. Business from existing clients is much easier, quicker and cheaper to get than brand new business. So, the big lesson to be learned here is: be very nice to your existing clients!
Back to the point
For the purpose of this article, we are exploring some of the practical benefits of working with a professional lead generation business to gain brand new clients. Based on the assumptions made above, for every brand new deal that your people generate, you will need your lead generation partner to provide you with at least 6 good leads. These leads, once received, should be very carefully allocated and then tracked.
Along with this – as discussed in previous blogs – getting the team to perform the appropriate activities at the right time will assist you in bringing in the sales much more quickly than having to surface your own leads first.
As with most business decisions, taking it back to the basics and examining cost versus return is a good place to start. Let’s assume, for example, that your company wins a £100,000 deal from 6 supplied leads. From the gross profit obtained from the deal, you would obviously have to take off the cost of acquiring those leads and then account for the sales commissions earned, the cost of sales etc. in order to arrive at a net profit.
If you then use an activity-based approach looking at the actual cost of generating the leads for yourself, with no partner involved, as well as taking into account the lost opportunity cost, you would begin to see a more comprehensive picture. Consider the costs attached with having a sales team of the size you need to adequately cover the entire sales process including prospecting. Add to that the disadvantages we outlined in part 2 of having salespeople spend a considerable amount of their time on cold calling for leads rather than employing their best skills in areas such as writing proposals, conducting sales meetings, leading pitches and closing sales.
Having weighed these factors up you would then, as the sales leader, be able to reach a far more informed decision on the real advantage to your organisation of partnering with the right lead generation business.
Laid out this way, there are many more advantages than disadvantages to using a lead gen company from a cost, time and morale perspective. Every organisation, though, is different and, as the saying goes, different strokes for different folks and so on. There are also many variables to include in what, finally must be a well-considered business decision. It is worth noting, however, that the decision you make is one that many other businesses, including your competitors, are either assessing or buying into. Just something to think about…