Lead Follow Up

Optimizing Industrial Sales Lead Follow Up

Lead Follow Up Axioms in Industrial Manufacturing

1. Senior executives dramatically overestimate their team's lead follow up activity and success.
2. Therefore, essentially ALL of their decisions on how to generate leads and grow revenue are founded on faulty data/assumptions.

In my experience with industrial manufacturers, CEOs, presidents, GMs, board directors, VPs of sales, and even CFOs are functionally clueless about the success of their lead generation.

The reality is shocking:

• <30% of industrial sales leads are even followed up on
• no documented process, expectation, or accountability exists for lead follow up
• leads cost $thousands more than estimated, particularly when we account for the minority that are actually worked
• goals and criteria to measure return or "success" are rarely established for lead generation "campaigns"
• even small companies, therefore spend $hundreds of thousands based on habit and gut feeling

Here's the more shocking part...NOWHERE in their operations or production would these companies tolerate this unacceptable performance.

Why are marketing and sales treated differently?

Industrial sales leads are a core aspect of every effort to grow revenue.

Is your company optimizing your lead management?

Leads are critical to business growth. Optimizing their generation, cost, and sales conversion are examples of complex challenges in the integrated revenue growth system of industrial manufacturers and distributors.

Every CEO tells me their sales team needs more qualified leads - because they need more sales meetings.

But they're not sure how to generate them, what they should pay, or what conversion rates they should expect. Often, they're not even sure what constitutes a "sales qualified lead", what system they have for lead scoring, how they sales team consistently follows up on leads (or doesn't), or how to calculate and compare their cost per lead for different sources.

Through the Lead Management Looking Glass into Full Cycle Revenue Growth

This topic is fascinating - because revenue growth is critical for business vitality and because a deep dive into leads illuminates the complexity of a well-engineered revenue growth system.

Sales leads sit at the intersection of company strategy, manufacturing marketing, industrial sales, and marketing and sales technology: generating them, selling them, optimizing for their creation, and measuring performance. 

To optimize revenue growth, we must optimize our lead generation and lead management. Therefore sales lead activity is a perfect example of how the Overall Revenue Effectiveness™ Framework benefits industrial revenue growth, and it's why I offer a low-cost sales lead audit service to provide executives a concrete understanding of how to improve lead performance, and how their revenue growth process can be engineered for improved results.

Lead Management Best Practices

To grow revenue, we need more and better leads. So companies often exhibit at another trade show, dabble in Google Adwords, invest in content marketing, and hire a BDR/SDR or an outside firm. Often, these only treat symptoms. To identify and fix root causes, we must understand and manage various aspects of industrial sales lead generation and follow-up.

Lead Counts, Types & Sources Compared

Where do your leads come from? What lead sources do you track? You probably have some combination of:

• Sales channel
• Outbound sales prospecting
• Trade show
• Trade journal advertising
• Inbound (content) marketing & website inquiries
• PayPerClick and Social Media
• Referrals
• Partnerships

Each of these carries a different cost/lead, and because they convert at different rates to meetings and then qualified opportunities and then closed/won deals and finally reorders,  the cost/each of those will vary.

Each also likely has a very different average sales cycle. So velocity of lead generation will vary by lead source.

And each lead source will often have a different degree of initial qualification (e.g. referrals high, inbound marketing medium, outbound prospecting lower.)

How many do you need to hit your revenue targets? (If you have these metrics, it's simple sales math working back from the goal and average deal size.) Do Marketing and Sales own that goal together?

What's your company's common language around leads? Prospects? Qualified leads? Sales qualified leads? Without the metrics, and definitions, lead follow up will be inherently imprecise.

Lead Scoring

How does your team route a lead when it comes in? Are they all treated the same? Even if a referral and RFQ form are hot, while a PPC ad click for a competitor term is not?

Best practice is to have a lead scoring model which guides the routing and follow up.

Lead scoring should include the following:

• Factor representing relative value of the source
• Firmographic details (how closely does the company profile match your ideal customer profile, target acct or not)
• Contact details (job title, location)
• Intent data (type of info requested, number of pages visited over what time frame, number of contacts from the same company visiting, which pages they visited)

Lead score will be used to apply the right "label" for the lead based on your agreed terminology. It will also inform how the lead is managed. Will the account manager be notified immediately (e.g. target account, existing customer) to call? Of will the lead be relegated to marketing for some paid ads and drip emails for nurturing?

This requires the right marketing and sales technology stack to capture, calculate and act on the data.

Lead Follow Up System

On a recent call with a client GM there was stunned silence when marketing ops showed reports that NONE of the leads from a successful sponsored webinar program two quarters ago were ever followed up with. This was a list of presidents, GMs and CEOs of companies that fit their ICP, and by virtue of their interest in the topic had concerns around specific challenges.

Those leads, at roughly $700 ea, were cheaper than their average trade show leads. But sitting latent they were worth ZERO.

You must have an agreed system for sales lead follow up. This system must be based on agreed definitions, and be supported by appropriate automation. It must also include consistent reporting and a system for accountability.

But the lead follow up system depend on numerous variables.

• the grit and accountability of your sales team
• your understanding of the market and buyers' problems
• raw sales talent (measured empircally using a sales skills evaluation)
• maximum response time
• minimum number of contact attempts
• coordination with sales channel and alignment of systems
• measurement KPIs and reporting (including alerts when agreed activity expectations are missed)
• clearly defined, trained and coached sales process and methdology

It doesn't matter how many leads your team generates, their quality or cost, if the follow up system is an ad hoc series of steps left to reps' inclination and judgement

Speaking of reps, have you ever noticed that when you propose to cut back on advertising or a trade show they squawk? And have you tracked how diligently they follow up on the leads you provide? There's often a massive dissonance. Here's a pro tip - invoice them for leads and see how their attention shifts as I discuss in this video.

Cost per Lead Analysis & Resource Decisions

If you don't know the relative cost/lead and ultimate cost of new customer acquisition for various lead sources, then every decision you make on marketing budgets is a guess.

Think about it - if you knew that trade show leads cost $800 each (all in booth rental, set up, T&E, etc.), that 30% lead to meetings, 30% of those to projects and 30% of those to new deals, you'd know that each new deal cost you $29,600. If your net profit (after commissions) on an average sales is >$30K then you might make money based on lifetime value.

On the other hand, if content marketing leads cost you $200 each, that 20% led to meetings, 30% to new projects and those closed at a 35% rate, you'd know that each new deal from that lead source cost you $9,500 ea. With that same >$30K net margin/transaction, you'd probably shift investment from shows (not cut it out - there are other benefits) to content.

That's sensible.

But most companies lack the data to make those informed decisions.

Keys to informed CPL Reporting and Lead Generation investment decisions include:

• every campaign should have a goal - this can be quantitative (e.g. 200 sales qualified leads) and qualitative (e.g. generate 30 in depth conversations to assess the product market fit for this new vertical market)
• dashboards should be created for every campaign, as well as rollups for all leadgen in aggregate
• marketing technology should account for lead attribution, even if somewhat arbitrarily (a lead that finds you with an internet search who then visits at a trade show and later attends a partner webinar)
• real-time access to the following, by campaign and lead source
  • $/lead
  • $/discovery meeting
  • $/qualified opportunity
  • Customer acquisition cost
  • Lifetime value
  • % followed up on according to your established time & activity expectations (in aggregate and by rep)

Most industrial companies rely primarily on trade show leads because that's traditional in their industry, and they've never invested significantly in other channels. And, maybe that's the right place to invest. But without metrics on how much leads cost, and conversion rates, it's only a guess.

Is there any function in operations or production where you throw money at guesses?

Lead Follow Up System Audit - Unpleasant but Illuminating

Lead generation and follow up sits at the intersection of strategy, marketing, sales and technology. A deep dive into lead follow-up, therefore, provides a great insight into your entire revenue growth effort and a platform for conversation around related topics.

More importantly, it's an immediate business opportunity for every business. If you can improve the efficiency of step in the lead generation and follow up process, you can impact revenue.

That's what my audit will do. We'll:

• Determine your current level of lead generation
• Compare that to what's required to hit revenue goals
• Create a cost/lead analysis for each channel
• Quantify your return on lead generation investments
• Analyze each rep/team lead follow up performance
• Evaluate your lead follow up system and suggest improvements
• Identify opportunities for improved conversion efficiency
• Determine whether your current systems & adoption can provide the metrics you need for data driven decisions
• Deliver qualitative buyer perspective impressions of the lead follow up process
• Identify gaps between marketing and sales
• Characterize the current "culture" of lead management
• Identify any gaps in the current tech stack and recommend improvements
• Compare lead generation investment decision methodology vs. operations & production investments
• Suggest additional possible lead generation channels

By digging deeply into this single function we have an opportunity to understand elements of the entire revenue growth process, and to uncover opportunities for improvement beyond lead follow up itself.

It can naturally lead to a larger "sales math" conversation - what lead generation, prospecting, and sales activities are required to hit our revenue goals. What investment and expense will they require? How will we need to change the process?