Cut The Costs Of Finding And Managing Leads

Every organisation with a sales force keeps an eye on the leads it generates - how many does each salesperson get and how many are converted into customers. But as most companies now appreciate, the costs of generating and converting leads need to be carefully managed or they can become a real drain on profitability.

The basic tasks of lead management are to lower the costs of lead acquisition while at the same time increasing the rate of conversion into customers. To do this it’s best if you separate the lead-getting activity from the selling activity and develop metrics for monitoring each. The two are actually separate functions and require different sets of skills and resources. Lead-generation is a marketing function, while the job of converting those leads to customers is a sales function.

Lead quality is essential

Leads are acquired in any number of ways. For marketers who purchase prospect lists the content and quality of the list should be far more important than the cost, yet how many lists are bought on the basis of price? The answer is, far too many. Those who specialise in lists know that good lists are worth what they cost. They’re regularly updated, their data is accurate, and it’s possible to nominate prospects by geographical area, by age, by occupation, or any other profile that will allow the sales team to target suitably qualified prospects. You don’t have to pay for a huge list if you’re only a small company or are restricted in your geographical coverage. Carefully targeted prospects are available on a cost-per-lead basis; it’s even possible to rent or buy lists of people who have previously responded to the same form of marketing you intend to use.

The most important metric to monitor is not the cost per lead, but rather the relationship of leads to final sales, by dividing the number of leads purchased by the number of conversions obtained from those leads. The closer this result is to ‘1’ the better the quality of the leads you’ve paid for.

Another way to improve the quality of the leads you get is to have your existing customers provide you with referrals or word of mouth. Referrals are really a way of leveraging off a high level of customer satisfaction and represent a much more likely set of prospects than leads gained from cold calling.

Raise conversion rates

High quality leads make it possible for your sales team to achieve better rates of conversion from leads to customers. This effectively lowers selling costs and will go a long way towards offsetting any additional costs incurred to ensure that lead quality is consistently high. There are many more steps you can take to improve the conversion rate your sales force achieves.

Have a system that assigns a relative value to each lead at the first contact. ‘Hot’ leads are those who are definitely looking to buy; ‘Warm’ leads are those who might buy; and ‘Cold’ leads are probably not interested in buying. Discard ‘Cold’ leads at the outset of the selling process. Concentrate selling efforts on ‘Hot’ leads. Give them priority and only after all the ‘Hot’ leads have been processed should the sales team turn its attention to ‘Warm’ ones.

Leads are often obtained through offers. Before the handover to the sales team the lead should be provided with any information they may have requested – a sales brochure or product order form for example. Have a system that records what was requested and what was provided. Be persistent. One enquiry handling expert estimates that 45% of all leads turn into a sale for someone, but only 22%-25% actually convert within the first six months. That means that 45 out of 100 leads might eventually convert to customers if they’ve correctly handled.

Keep in touch

Another consideration is that competition usually decreases over time. The reason is simple – most businesses lose interest in a lead if it doesn’t turn into a customer pretty quickly. Patience and ongoing communication will eventually deliver all the conversions you’re going to get, but many won’t convert until several months have passed.

This tells us that every lead management system must accommodate the need to stay in touch with leads over a fairly long period of time. So communicate with leads – perhaps by telephone, email or a newsletter – until they either convert to become customers or must be reclassified as ‘Cold’.

Keep in touch for an appropriate length of time until you’re absolutely certain there’s no hope of ever converting that contact to a customer. Remember too that most businesses have competitors and if you’ve done your prospecting correctly even the people who initially reject you are somebody else’s customers. They may eventually become yours if you don’t give up.

Each member of your sales team will have a conversion rate that shows how successful they are at converting leads to sales. This metric can be used in conjunction with total euro volumes when you’re comparing the results of individual members of your sales team and determining which salespeople are your top performers.

Sales Techniques

Get Through The Right Doors

Businesses that involve face-to-face meetings with their clients need to keep in mind that they might be knocking on the wrong doors, or that they’re not the only people knocking on the right ones. Identifying and targeting the key decision makers in a prospective customer firm is essential to getting your foot in the door in dealing business to business.

Do your homework

Whatever it is that’s being sold has to meet the exact needs the firm’s decision maker has identified as right for their business. This means doing research into the customer’s industry, their position in the marketplace, and learning about their business. This knowledge provides you with a level of personal credibility with the customer and the knowledge to be able to present your product as the best solution to their needs.

Talk to the right person

Every organisation has a set of levels of authority that it may be difficult to recognise from the outside. Trying to sell a €10,000 item to somebody with a spend authority level of €500 is a waste of time. So is trying to sell stationery to the purchasing officer of machine parts. In fact, if the organisation is big enough you may find that no single person has the authority to purchase everything you’d like to sell them, and it’s even possible that the contact person you have been calling on for years has changed positions and is now the ‘wrong’ person to be pitching sales information to. Try and target the most appropriate person in the firm for what you are selling.

Cultivate the managers

Just as important as knowing who your competitors are is to know who those competitors are talking to at your customers’ offices. You might have a terrific relationship with a buyer who’s quite happy to select your products, but if your competitor knows somebody higher up in the organisation who can order your contact to change suppliers regardless of how strong your relationship is with them, then you are talking to the wrong person. Make contacts as far up the pecking order as possible, even if they aren’t the ones in the business who actually issue the purchase orders.

Suit your offering to the customer’s options

There’s increasing emphasis in most medium to large-sized organisations of the need to present a financial case to management for purchases before approval is given. This is especially true of big-ticket items when decisions about repair or replacement are being made. Your salespeople have to be prepared to sell the case for your offering which may not be the product itself. If you are aware of the customer’s alternatives to making an outright purchase, such as rebuilding older equipment or subcontracting the work outside the company, you can make an offering that covers those possibilities.

Get outside advisers onside

Third parties are frequently brought in to provide their input on a prospective purchase. The best approach to use with them, whether they are familiar with your products or not, is to treat them as the prospect – but one with different needs from the actual customer. What they really need is the information to make a decision, and if you’re able to give them enough information to justify purchasing your product (as well as for rejection of the alternatives) they will become an ally in your selling efforts.

Stay in touch while the decision is being made

Circumstances within a customer’s business can change as information about a prospective purchase is assimilated and analysed. It may be that you will be asked back to provide further details, but often you won’t be and what you’ve proposed first time around is considered to be your best and/or most complete offer .....

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Can you see your firm’s vision?

The word ‘vision’ is part of our contemporary business language, yet not every accountant can readily articulate just what their vision for their practice is.

It’s not just a marketing plan, although these plans have to be based on an appreciation of a vision for the firm. The irony is that a vision is something that never exists in the physical sense – it simply can’t be seen with the eyes.

A vision is a product of the imagination. It can be reduced to writing but that’s only a summary of something much more vital.

One way of defining vision is: “What the practice will be in three years’ time”. It’s obviously not a part of the here and now but rather something that is going to happen in the future. Here are the elements of the vision for a firm:

• What it will be like at a designated time in the future
• What its structure will be at that point in time
• What its culture will be at that point in time
• What forces will make it be like that
• What the drivers for those forces are (or will be)

How important is it for an accountancy practice to have a vision? Absolutely essential! A firm is unlikely to grow unless it knows what it wants to be and how it’s going to get that way. And without growth, in this fast-moving competitive era a firm will actually be going backwards.

It’s a real shame that so many partners in accounting firms don’t seem capable of looking ahead - to see what might be, rather than only what exists right now. That attitude only ensures that things will happen by accident, and those aren’t necessarily going to be good things.

So what is it that can create a vision and enable accountants to conceptualize a future for their enterprises? There are at least three ‘drivers’ that do this.

An investment of energy

Visions are created only after a significant investment of energy. It takes energy to do the research, the thinking and to spend the many hours of hard work to articulate the vision for a practice.

An accumulation of knowledge

A vision isn’t created in isolation. The creator of a vision has to know about the market, the principles of business and how to run one, human behaviour, leadership, finance and a host of other things that need to be learned.

It’s only the background knowledge that enables a visionary to construct a future out of the past and present.

The power of thought

The human mind is an amazing and powerful thing. It is the engine that creates the vision, the intellectual tool that enables a person to consider a vast body of knowledge and sort out what can and should be from that which is impossible or unwanted.

A vision is a prediction of the future and can only be produced by thought. The mind can create many possibilities but only one can be chosen to be the vision towards which the business is launched.

Just having a vision isn’t enough to make it happen. Once created the vision must be achieved by the use of resources, and one of the most powerful resources integral to achieving a vision is the team in the firm.

To be truly effective a vision must be shared with and accepted by the members of the team. It must be clearly communicated and become part of the culture of the practice. Unless this is accomplished it’s not likely to be realized.

For workshop development visit www.unitymanagement.com.au

Succession Planning

Succession planning: What legacy will you leave behind?

As a leader, your natural focus is on the success of your company. It has been proven in study after study that the quality of leadership provided in an organization is directly related to the growth and performance of that company.

Providing key leadership through critical strategic projects such as succession planning is important not only to the short-term success of the company, but also for the long-term success in achieving the objectives of ownership.

One of the greatest concerns facing the ownership of closely held businesses is how to establish and develop an appropriate succession plan. What legacy will remain after the transfer has occurred?

Accomplishing these objectives takes a proper amount of planning, experience and time. Yet, in the end, the process and results can prove valuable and, yes, even profitable to the business.

However, as noted above, time is one of the required elements to develop a plan. And as most business owners realize, there is rarely enough time to accomplish day-to-day activities, much less the time to develop a succession plan. Ultimately, one of two options exists for every business owner. Either the succession of your business will be an event controlled and planned by you, or it will be an unplanned occurrence brought on by outside forces.

As you probably realize, more often than not, scenario No. 1 results in a much more successful transition, both financially and emotionally. Failure to plan for orderly business succession often results in financial losses and sometimes even the loss of the business itself. And while the current administration has a favorable view toward elimination of estate taxes, no professional knows in certainty what will occur if we have a change in the administration or in 2010 when the current estate provisions expire.

Making a choice

So what is succession planning? Well it is not simply the transfer of the operating business from one generation to the next. This certainly can be one strategic route chosen by ownership, but it is simply that – one choice among many.

Succession planning is a process. It is an element of working "on" your business and not simply "in" your business.

Succession planning involves determining the choices you have to make with your business, the objectives of ownership (particularly personal objectives) in developing the succession plan, transaction and taxation planning, asset protection planning, and yes, finally, estate planning.

Because every action has a reaction within the process, the initial planning and development of the plan require technical expertise and experience.

Every successful succession plan begins with determining the objectives of the owners. With the objectives of the owners established, then the remainder of the plan can be developed. It begins with the old saying, "Begin with the end in mind." Succession planning is not simply a plan that sits on a shelf and implements itself. As you realize, you and your business constantly are changing. Eventually, the needs and requirements of the business conflict with personal desires.

Before that occurs, the owner has to decide which path he or she chooses to follow. Do I want to sell my business? Do I want to develop a plan whereby I can transfer the business to family members or key management inside the business? Is my business a candidate to go public?

Or, finally, maybe I want to continue to grow and run the business and proceed under a strategic plan by which my business is the consolidator. Yet even with this final choice, we all realize at some point that current ownership will have to address one of the first three choices.

Business valuation

Once the choice has been made as to which road to follow, another phase of the planning process may begin. A business valuation of the business entity is a critical piece of establishing the financial portion of the plan. The business valuation "sets the bar" regarding what value needs to be transferred.

The objectives of the owner and the purpose of the business valuation determine the appropriate standard by which to value the business.

It is critical to employ the skills of an experienced valuation analyst to ensure the process has a solid base from which to begin. Once the value of the business has been determined, the remaining portion of the financial plan may be addressed.

This is often the most critical step in the financial process. The structure of the transaction in terms of income tax, gift tax, estate tax and financing are critical to the success of the plan. As you can imagine, not all situations fit all possible solutions.

So it is critical to evaluate each option as it relates to the overall objective to the owners. There are many traditional methods by which this can be accomplished. In addition, there are newer methodologies and practices that will allow for the transfer of the business and often in a tax-free or highly tax-advantaged situation. The various elements of the financial plan ultimately can define the success or failure of the succession plan.

Within this financial plan, the professional must consider the structure of the transaction, a plan to address asset protection, financing, and income and estate tax situations. Ultimately, it is a combination of all these items that addresses the owner's goals and desires.

A common mistake

A mistake we often see is the plan overlooks the area of financing. Some succession plans simply incorporate life insurance and assume they have covered all their various needs.

While life insurance may play a critical role in the succession plan, it is important to remember the objectives of the owner. If an objective is to have financial payout during his or her lifetime, then this element must be considered as well.

Finally, how do the objectives, as well as the elements of the plan, impact the owner's estate. We all have heard the horror stories of how a person works all his life to build a business and, upon his death, his successors have to sell the business to pay the tax. A properly structured plan can avoid that situation as well.

In the end, succession planning ultimately comes down to making a choice. You must make a choice to take the time to design and implement a plan that allows you to control the circumstances and results surrounding the transfer of your business.

This allows you to make the choices that are most beneficial for you and your family. What will be your legacy?

For more information contact - http://www.unitymanagement.com.au/services.html