The Essential SMB Guide to Sales Lead Follow Up: How to Convert More Leads into More Orders in Less Time
For the small or medium-sized business (SMB) every inbound sales lead has the potential to become not only an order, but also to transform itself into a satisfied customer that represents a dependable stream of repeat revenue year after year.
The primary obstacle that stands between an SMB and that repeat customer is the task of lead follow up. On the surface lead follow up would appear to be quite straightforward but this simple step is fraught with difficulties for most companies. Sales industry research estimates that 40-50% of all inbound sales leads are never followed up. And, when the leads are followed up, common mistakes are made that unwittingly doom the SMB to lose the opportunity to convert that lead into an order.
Comprehensive and effective sales lead follow up is built on the foundation of a commitment to rapidly respond to 100% of the inbound leads received. In this book we outline simple steps that every SMB can use to build their prospect pipelines and grow their sales without increasing headcount. Including yours.
What is a Sales Lead?
To develop an effective lead follow up process it is important to first understand what an inbound sales lead is. A sales lead is simply a question. With their inquiry a potential prospect is asking you one or more question(s). They could be general questions such as: What does your product do? How does it do it? Will it do what I need? What does it cost? Or they could be more complex questions: How will your solution integrate into my current workflow? What productivity increase will we experience with your solution?
In today’s competitive sales environment the potential customer who has contacted your company about your product or service has already completed at least 30% of the buying cycle without you. They’ve spent considerable time online, researching your product and others like it, and visiting your website and those of your competitors. By the time they first contact you that prospect may have already gathered about 70-80% of the information they need to make an informed decision to buy your product. They are contacting you not out of idle curiosity but because they have an interest and specific questions that need to be answered. They have a developed need. And the first seller with the complete answers wins.
Here are the essential steps that every SMB seller should take to be the first with the answers and maximize their conversion of inbound sales leads into orders.
Step #1: Create a Lead Map
Sales lead follow up is a process. Before you take any steps to fix and improve this process you need to make certain you have a full understanding of your current sales lead follow up process. In all my years of consulting with the CEOs of many small and medium sized businesses, this is the first question I ask the client. “Draw your lead management process for me.” Not once has the client been able to provide a 100% accurate rendering of this vital process.
Check out the chart to the left to see an example of what it means to map out a lead. For every type of lead you receive, map how it is captured, recorded, and distributed to the salesperson that will follow up with the prospect. Your map should also show how leads are distributed to your indirect sales channels and how they are followed up, or aren’t.
Use your lead map to create a baseline benchmark for your current sales lead follow up process. The critical items to make sure you understand are how many hands a lead has to pass through before it gets to the right salesperson and, most importantly, how much time passes between the moment the lead was received and when the prospect receives a follow up.
At one client I quizzed the CEO and sales team about the exact number of new leads they received per week. They had no idea. In fact, they were averaging about two new leads per salesperson per day. (Each salesperson needed to close, on average, six orders per month to meet quota.) At first, they didn’t believe me when I showed them they were each averaging 15 to 20 new leads per month. When I showed them the leads from the previous month and asked what had happened to them, they defaulted to the standard sales response: “Well, I looked at those leads but they were no good.”
Which brings us to the most important step of an effective Sales Lead Follow-up Program:
Step #2: Follow up 100% of Inbound Sales Leads
Every inbound sales lead is like a scratch-off lottery ticket. You don’t know what you have until you scratch the wax off the face of it and see if you have won. How many people buy a lottery ticket and then wait until the next day to see if they have a winner? None. Inbound sales leads should be treated the same way.
The opinions of sales industry researchers vary, but the bottom line appears to be, across industry types, that roughly 50% of in-bound sales leads are never followed up. Let me say that again. 50%. Each one is a potential winner. Just sitting there. Begging to be scratched off. Does anyone believe that 50% of the scratcher lottery tickets sold last year in the US, approximately $25 billion worth, are sitting around in a drawer somewhere unscratched?
But sales leads have the same, if not better, potential to pay off as lottery tickets. It’s a continuing mystery why so many salespeople have such a negative and distorted view of sales leads. Sales leads are found money. Someone has purchased a lottery ticket and is attempting to hand it to you, but you turn your back.
This lack of follow-up means that at least 50% of the dollars that the typical small or medium-sized business invests in lead generation and building brand awareness is wasted. If the deal is that you, as a CEO or marketing manager, invest marketing dollars to generate leads with the understanding that your salespeople will follow them up to get orders, then one of you is not holding up your end of the deal.
A Basket of Cash: The Sales Math of Effective 100% Lead Follow up
Let’s break this down mathematically. Here is a simple illustration of the power of 100% lead follow-up in Zero-Time. Let’s assume that the average size of your typical customer order is $20,000. You get 20 in-bound sales leads per week, four per day. I’ll also assume that your organization is average and estimate that your sales team follows up on 50% of your leads. For purposes of illustration, let’s also say that your salespeople convert 50% of your followed-up sales leads into qualified prospects and 50% of those qualified prospects into orders. What does the math say? It says that you are ignoring the easiest 100% sales growth you will ever find. Right now you’re getting 2.5 orders out of every 20 leads, or $50,000 in new business. Assuming the same conversion rate from prospects to orders, by following up 100% of your sales leads in Zero Time you will produce five orders from those same 20 leads, or $100,000 in new business. That’s an extra $50,000 in orders for the same dollar investment in marketing and sales. Who doesn’t want more sales?
In Sales, Ignorance is not Bliss
A friend of mine, JB, is a high-powered sales consultant. He works with CEOs of companies of all sizes to help them turn around their faltering sales organizations. He told me about one assignment he had taken on recently with a previously high-flying $10 million-a-year company. Growth was sputtering, so the CEO hired JB to analyze their sales processes and help implement the necessary fixes. Within a week, JB had uncovered the source of the company’s problems. He found a backlog of 1,800 sales leads, the vast majority of which had never been followed up. The rest might have received some follow-up but it had never been recorded in the client’s CRM system, which was in place but not used. So no one knew for sure. Worst of all, the CEO and the VP of sales were aware of the situation but had moved at less than glacial speed to fix it.
This leads us to Step #3 in our Effective Sales Lead Follow-up process:
Step #3: Enter all Leads into your CRM system as soon as they are received
Make sure that all inbound sales leads are entered into your CRM system as soon as they are received and that each one is assigned to a salesperson for immediate follow up. Use your CRM system on a daily basis to check and make sure that 100% of your sales leads are being followed up. If you aren’t checking, it isn’t happening.
What should you do if you don’t have a CRM system? Go buy one. Of course, you can devise a system for tracking leads that doesn’t require a CRM system. But why would you? If you want to see a powerful demonstration of how to use a CRM system as an effective sales tool, then look no further. Improving your order yield from your pipeline of sales leads provides the “R” in the ROI from your investment in a CRM system.
Don’t Play the Waiting Game
I asked a client once about their lead distribution and follow-up policies.
“We usually gather the leads up and distribute them once a day.”
Why do you wait?
“I don’t know. It seems distracting to send leads out to the salespeople as they come in. Both for me and the sales team.”
How can it be distracting to ask sales to do their job, which is to sell product to potential customers?
“Well, since you put it that way.”
Let me ask you this question: What good happens when you wait to follow up a lead? Does the potential customer become more impressed with your responsiveness, or less? Does the lead wait to talk to your competition until after you finally get around to calling?
Which takes us to Step #4 of the Effective Sales Lead Follow-up process:
Step #4: Follow-up Immediately; If not Sooner
How much time should it take to follow up a lead? Less than you think. Every minute that passes by while you wait to follow up a lead is time that a competitor will use to swoop in and talk to the prospect before you. If they respond to the customer with the answers to their question, then you are suddenly fighting for 2nd place.
I helped a client streamline their sales lead follow up process to reduce their response time to inbound sales leads from 24 hours to 30 minutes. The immediate result was more qualified prospects in their pipeline. The longer-term result was a doubling of their sales with the same number of salespeople.
Your goal should be for the prospect to feel like they had just hit the “enter” button on their computer when your salesperson calls to follow-up. The first one in the door who is completely responsive to the prospect’s needs will set the bar for all the other competitors, which means that you will have dramatically improved your odds of getting the order.
How much time should it take for your sales team to follow-up a lead? Thirty (30) minutes max. (Sound too fast? Contact me at [email protected] I will show you how to make this happen.)
Sam was selling big numbers as it was. But when my client Manny, his boss, rolled out an aggressive lead follow-up process Sam found that being completely responsive to leads within 30 minutes pushed his sales into overdrive. Quick responses elicited more immediate questions and information from the prospects. If they sent a lead in, then they were de facto interested. Call them back immediately and the level of interest went up. Responsiveness captured the attention of his prospects and differentiated Sam from the competition. Absolute responsiveness, completely meeting the prospect’s information requirements in Zero-Time was a competition-killer.
If the customer already has the bulk of the information they need to make a decision before they even call you, and you promptly and thoroughly answer all of their additional questions in the first sales call, you’ve gone a long way toward winning the order.
Which leads to Step #5 of this Simple but Effective Sales Lead Follow-up method:
Step #5: Provide Complete Answers Quickly
As discussed above an inbound sales lead is nothing more than a question. Being responsive to a prospect means that you are providing a complete answer to their question(s) in the least time possible. The best way to do this is to position your deepest product knowledge closest to the customer.
It is not enough to be the first to respond to the customer. You must also be the first to answer their questions. Manny and Sam learned that during the buying cycle the customer is not only judging your product. Perhaps more important, they are evaluating what it will be like to work with your company.
Responsiveness, understanding, and completeness all build trust and corporate credibility that lead to orders. The first seller to respond to an inbound sales lead with the complete answer in Zero-Time will dramatically increase their chances of winning the order.
Your Sales Processes are Not Static
Once Reuben’s sales team bought into the benefits of following up with 100% of their sales leads, they became noticeably less skeptical about the value of the leads they were receiving. At that point Reuben’s team was following up on 100% of their sales leads but was taking two or three days to call the prospect. They discovered that one of their main competitors was beating them to the punch with nearly every prospect. Clearly, two or three days were too long to take to follow up on new opportunities.
Reuben’s sales team decided to step it up a notch. Faster lead follow-up would give them an advantage with the prospect. They collectively decided to tweak their process to ensure sales leads were followed up on the same day they were received. They further refined their lead system so that all the leads received overnight were entered in the CRM system and distributed to the sales team by 9 a.m., and all leads received in the morning were distributed by noon. Every member of the sales team quickly began to see the benefits of responsive lead follow up on leads and they turned the tables on their competition. Now Reuben’s team became the first company to follow up with a sales lead, and combined with 100% lead follow-up, drove even more prospects into their sales pipeline. Over time and with additional refinement to their sales processes, they reached the goal of 30-minute lead follow-up.
Which leaves us at Step #6 of the Essential Sales Lead Follow-up process:
Step #6: Measure, Improve, Measure Again
You must continually work to improve your sales lead follow up process. As the old saying goes ‘You can’t improve what you don’t measure.’ So keep it simple to start with and measure the following:
a) How many sales leads do you receive each week?
b) How long does it take to respond to each sales lead? (the time between when the lead is received and a sales person talks to them for the first time)
c) What percentage of your inbound sales leads are converted into qualified prospects?
d) What percentage of your inbound sales leads are converted into orders?
Set goals for these metrics a-d (above) and then check each month to see if you are achieving them. If you are, set new more aggressive goals and fine-tune each element of your lead follow up process to achieve the new goal. If you aren’t meeting your goals, examine each element of your process in detail and implement steps you can take to improve it. Then check your performance again in a month.
Art owned a family business that had been around for about four decades. His had an objective to grow his top line by 10%. His first thought was that he would have to boost his spending on advertising to create more demand and generate leads, but he was naturally worried that increasing his marketing outlays would not result in more sales.
I spent time with Art’s sales team, reviewing their processes and their accounts. It was no surprise to find that they weren’t paying attention to sales leads. I pointed this out to Art and told him that he didn’t need to increase his advertising budget. He just needed to make sure that all his leads were promptly pursued.
Art wanted to increase the percentage of leads that were followed up by 50%. My response was that there was no need for half steps and that we were going to ensure that 100% of all leads were followed up. It was an easy fix. All in-bound leads were routed to Art’s sales admin, who entered the account into the company’s CRM system and assigned it to a salesperson to follow up on. Each night before he left work Art reviewed the list of leads and open follow-ups by each salesperson to ensure that the assigned leads had been followed up.
What Art found initially was fairly predictable. The good performers followed up on all of their leads. The chronic middlers and underachievers didn’t. (It is not a coincidence that industry research estimates both that only 50% of leads are followed up and that only 50% of salespeople achieve their annual quotas.) Art met with his middlers and underachievers and told them it was a non-negotiable condition of their continued employment that they follow up all their leads.
Perhaps not surprisingly, the entire team began following up on 100% of their leads. One positive result was that the middlers and underachievers developed more prospects and closed more orders. They still weren’t all-stars, but they had closed the gap. And total company sales rose as a result.
Making it Happen: Management Action Items
The next steps are up to you. While it takes management commitment and follow-through to implement an effective sales lead follow-up program this is also the easiest of the Zero-Time Selling solutions to implement because the results are so simple to measure. Either you’re following up on 100% of your sales leads or you aren’t.
Here are the six action items to take today to begin following up on 100% of your sales leads:
1. Map your lead handling process.
Check out the chart again on Page 4 to see an example of what it means to map out a lead. For every type of lead you receive, map how it is captured, recorded, and distributed to the salesperson that will follow up with the prospect. Your map should also show how leads are distributed to your indirect sales channels and how they are followed up, or aren’t.
2. Capture all your leads in your CRM system as soon as they come in.
Every sales lead that you receive, regardless of source, has to be immediately entered into your CRM system with a follow-up action assigned to a salesperson.
I had this discussion with JG, a client’s VP of Sales.
“Enter every one of them?”
“Even the bad ones?”
What is a bad lead? Can you tell me?
“I can tell just by looking.”
Really? Are you 100% sure that you are not passing up a valid sales opportunity each time you flush a lead down the drain without talking to it first?
“Well, no…not 100%.”
So, how many orders, how many thousands of dollars, have you handed over to your competition during your career because you didn’t follow up on every lead?
Just what I thought.
3. Immediately distribute all your sales leads after you’ve entered them in your CRM system.
Don’t wait until you have a certain number of leads; don’t gather them all up and enter them once a day. If you do, you’ll lose valuable time, you won’t be responsive to the customer, and you’ll open the door for your competition. You will need to designate someone—yourself, a sales admin, or a receptionist—to enter every lead into your system. It doesn’t matter who does it. What is crucial is that it becomes someone’s responsibility.
Who is that person in your company? Enter the name right here: ____________________________________. Now, send that person an email and ask him or her to come talk with you about the important role they have to play in your sales success.
4. Assign follow-up action items to a salesperson for each lead that is entered into your CRM system.
A specific salesperson needs to be assigned to follow up on each lead. Salespeople have to understand that, effective immediately, following up on leads is compulsory. It is a condition of employment.
This is a very simple bargain between management and salespeople. Management will invest in lead generation. All the salespeople have to do is follow up on the leads that are generated. It’s pretty simple.
5. Daily checks by management to ensure that leads are promptly followed-up.
This is essential. It is now up to you, as the CEO or sales manager, to check your CRM system at the end of every workday to ensure that all of the assigned lead follow-ups took place.
As I like to tell me clients: If you aren’t checking, then it isn’t happening. The follow-up and spot-checking really doesn’t take very long. And I guarantee you’ll see results.
6. Write up the 100% lead follow-up process as a standard sales policy and then distribute it to everyone on your sales team.
The policy must stipulate the following points:
· 100% of all sales leads will be promptly followed up.
· Prompt and universal lead follow-up is a condition of employment.
· All leads will be immediately entered into your CRM system and assigned to a sales person for prompt follow-up.
· Management will monitor lead follow-up daily.
It’s Time To Make Some Changes
By following up and effectively managing 100 percent of your sales leads, every day, a small business can go a long way toward not only developing additional sales, but creating a strong, loyal customer base as well. Disciplined and comprehensive sales lead follow up is the simplest way to improve the ROI on your sales and marketing dollars.
It’s simple, logical selling that’s easy for even the most novice business owners to manage: either you’re following up with a 100 percent of your leads or you’re not.
Use this book to make it happen for you.