So, let’s start off with the elephant in the room - of course lead generation and subsequent sales is going to grow the top line revenue of your business, but there’s a real chance that there is an easier way to grow your business! In fact, I have seen businesses fail trying to increase their top line sales instead of focusing on the foundational items I lay out below.
Part 1 will focus on things you can do to address sales. So take a look and see where your focus is where it should be.
Lead Conversion
Lead conversion refers to the number of leads you obtain that become customers. A number of people have come to me wanting to invest in marketing, but haven’t looked at whether they can increase their lead conversion first. Here’s why this is important.
- Addressing your existing lead conversion rate allows you to increase your business without having to invest more into marketing. A lot of times a few simple changes can drastically change your conversion rates, like answering emails and phone calls faster! Some of these small changes can really make a huge difference and don’t have to be costly.
- If you have a low conversion rate then it’s going to take MORE leads to get the result that you want, which means you have to spend MORE money. If you’re only converting 5% of your leads, then you have to get 40% more leads than a business closing 7% of leads. This can be devastatingly costly to a small business who is likely trying to increase sales through paid advertising or a dedicated sales employee.
Consider this - Bob gets 100 leads a month and closes five. To increase his closing percentage by 2%, Bob needs to sell just TWO more people out of the 95 who didn’t buy. In contrast, he would have to find FOURTY new leads in order to sell the extra 2 he needs.
So, how do you do this? I recommend taking a real deep dive into your sales process and identifying areas where you can improve. I like to do the following
- List the major events in your sales process (lead received, first contact, second contact etc).
- Go through and roughly guess where people are dropping off.
- Then go through the 2-3 steps that have the biggest drop-off and find solutions to increase retention to the next step.
- Pick 1-3 things to change.
- Implement your changes and measure the change
- Repeat as many times as you feel is necessary to really dial in your conversion rates.
The key is to really look at what you’re doing, but also not get lost in the details, which is why I suggest only picking a few things to focus on. The goal should be small, quick changes rather than burning time and energy in a major overhaul. That way you get immediate results and feedback and stay nimble in the market rather than devoting huge amounts of time and resources (which, let’s be honest - most of us do not have), to overwhelming systemic change.
Also, take a quick look at this report to see how your conversation rate stacks up against industry average: https://marketinginsidergroup.com/content-marketing/lead-conversion-rates-average/
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Customer Retention
How many of your customers repurchase from you? If customers aren’t repurchasing, consider why. Could something about your service or product be improved? Perhaps you need to reach out to them at a regular interval to keep your company top of mind (ie. email newsletter). Maybe you offer many diverse services or products and your customers aren’t educated about your other offerings.
Why target past customers? Because you’ve already qualified them and created a relationship with them. It’s a much easier position to be in than trying to increase the number of existing leads, especially if you're in a smaller market or offer a niche product.
How many of them refer clients to you? Referrals are almost twice as likely to purchase than a lead from any other source. If you aren’t regularly getting referrals then consider asking!
Going back to our earlier example - Bob reaches out to 50 past clients. Of those 50 he just needs two to repurchase. Or because referrals are twice as likely to purchase, he needs those 50 people to recommend 20 new people.
So, how do you do this? I recommend looking at what you’re doing once a customer has purchased. Are you getting their email so you can stay in contact with them? If you have their email or other contact information, are you reaching out regularly? Are most customers clear after purchasing from you what your other services or products are? Once you’ve answered these questions, write down the 3-5 things that you want to communicate to your customers.
You not only want to reach out and stay top of mind, but also be intentional about what you’re presenting your customers. Whether it’s a sale, a new service, or a specific ask for referrals, having clarity on what you want the communication to achieve will increase the chances for the outcome you were hoping for.
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Check out Part 2 and learn about how to grow your business in a scalable way by looking at your operating processes and profitability.
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