A common phrase originally used to describing the power of numbers to bolster arguments with truth, but now it is more commonly used to cast doubt on the strength or validity of an argument where statistics are manipulated to support the desired view. E.g. “95% fat free” – but is that distracting from the 60% sugar and 2000 calories?
However, staying with the positive value of statistics they can be a trigger to investigate the truth or reality behind an observed situation. So let’s look at some statistical statements from a recent infographic posted on LinkedIn which provide opposing perspectives that can reveal quite startling pointers to simple things that could dramatically improve the performance of a business:
- According to Dale Carnegie 91% of customers say they would provide a referral to a new prospect but only 11% of suppliers ask. Customer referrals must be lowest of low hanging fruit so why do so few pick it?
- If 74% of orders go to suppliers who engaged with the prospect early in the buying process why do 75% of suppliers leave it until later in the process to engage? This is another example of a statistic that leads to one obvious outcome – proactively engage sooner – but how?
Read on for options to address these, and a few more, statistical conundrums.
Referrals – available 91%, requested 11%;
So why do so few ask for them? We know from talking to many companies that the main issues that people wrestle with are around when, who’s responsible, who to ask, and why they would respond, so here’s a few thoughts …
The best results come when companies create and diligently follow a specific process for gaining referrals that address these issues:
When to ask – this is one of the most important aspects of a successful referral process. The topic should be introduced at an early stage in the sales conversations with a new prospect. By doing it early it can be dealt with as part of a natural part of the relationship building conversation but if it is left too late then it can become entangled with the closing and negotiating part of the deal and in many cases it does not get raised at all for fear of damaging the chances of winning the deal. For existing customers the time to ask will be at a successful delivery milestone or a routine project or account review.
Who does the asking – for new customers the ideal person would be the sales person who worked with the prospect to convert them into a customer. If you have long established customers then whoever owns the commercial relationship on your behalf such as an account manager would be the obvious choice. If the account manager is not from a sales or marketing background then the marketing department is an alternative choice – but don’t lose sight of the fact that gaining agreement to provide a referral is a selling activity requiring one-to-one engagement with the prospect; this is not a time for e-mails or letters.
Who to ask – simply whoever is best placed to know the sort of people you might want to meet as potential new customers. For example, if your typical customer is the financial director then that is who you want to be referred to and who you might want the reference to come from. In any event you need to ensure the introduction is to a person of influence and ideally the decision maker in the new prospect. You will need to manage the situation to ensure the introduction is to a company that matches your criteria for ideal prospects; sector, size, location, etc.
What incentive you need to provide – first of all define your measure(s) of success and link that to affordable value to your contact. Ideally you should avoid using direct financial rewards for referrals as this puts a commercial spin on something that should emanate from the mutuality of the relationship. If you want to have a financial benefit then it could be something like; a voucher to be used against a future purchase or perhaps a discount when they renew a service subscription. You will note these incentives can only be enjoyed if the relationship is on-going so they can serve the secondary purpose of “rewarding” a loyal customer. If the person providing an introduction is from one of your suppliers then a financial incentive is generally a more acceptable approach but something of a more mutual nature may still be more effective in the context of your relationship with them.
How or what do you ask? – as with all your customer interaction, the focus should be on benefits achieved, so for instance “Is there someone in your network/acquaintance who you think might also benefit from a similar solution/service that you could introduce me to?” It is highly unlikely to be a competitor of theirs though.
The rewards of early engagement.
If 74% of orders go to suppliers who engage with a prospect early in the buying process it is clear where you need to be and when. But how?
The internet, social media and the wealth of physical networking options available today provides a huge marketing resource that could have only been dreamed about just 15 years ago. However, this is a sword with a double edge. Firstly, the sheer volume of data can act like a smoke screen making it difficult to see what you are looking at. Secondly and more seriously, it is now much easier to meet people but much harder to meet the people that really matter. There are now so many people out in the wider business community that identifying your prospective customers is much harder – wood and trees spring to mind.
The availability of huge amounts of easily accessible data is also said to be the reason why potential customers have progressed 57% (we have seen figures as high as 80%) of the way through their buying and decision making process before engaging with potential suppliers. They decide what they want to buy then just look for someone to sell it to them at the lowest price.
Can you see the connection? Suppliers are busy kicking up a lot of dust and making a lot of noise, mainly on the internet, hoping they will be seen or heard. While at the same time, potential customers are on a buying and decision making journey of their own. Instead of the suppliers and customers sharing a journey they are moving along different tracks.
What to do about it; plan well, qualify hard, be proactive and go hunting. Create a visible presence that makes it clear you understand what matters to your prospective customers, demonstrate your expertise and thought leadership; raise the questions but don’t give your competitors all the answers.
The full answer would be to add a direct outbound selling function to your go-to-market strategy but for many this sounds like cold calling so, would not be considered. We can show you how to make this work but that is a discussion for another day so for now the next three tips will go some way to provide an answer.
Nurturing leads generates as much as 50% more business.
This one is simple to understand and even more simple to rectify. Because there is so much data freely available we no longer value it. We can buy 50,000 records for pennies per record; send them all an e-mail and talk to the few hundred that get back to us. We don’t really have time to do anything about the 49,000 plus that do not get back to us so we just ignore them. We can then buy another 50,000 records and repeat the exercise. So, we now have over 99,000 companies or individuals who have had one message from us but we have no idea what impact that message might have had; it might be good but it could also be bad.
A much more effective approach would be to focus on a much smaller number of better quality data records. We can then plan a series of accumulative contacts; an e-mail offering a white paper, a follow up to those who did not reply with a different offer, invite some to a business briefing, if they opt in add them to your newsletter circulation, call some and actually speak to them (scary but very effective). Simplistically, this is lead nurturing; making carefully planned and orchestrated multiple contacts with the same people.
We will expand on Lead Nurturing in a future article but some of the key things to consider are; create a funnel and use qualification techniques to move things down the funnel focusing on the leads most likely to generate business for you. Have stages that define the status and position of a lead in the funnel and match your nurturing activities to the stage creating a progressive journey for the prospect. Keep communication simple delivering a logical story for the prospect. While e-mail and even social media are useful tools for nurturing, you will also need to speak to your prospects both on the phone and face-to-face.
80% of marketing leads do not convert into business.
What a waste! The most common cause of this issue can be found in the title; they are marketing leads but may not be sales ready leads. The cure; marketing and sales need to be joined at the hip but rather than marketing driving sales it must be the other way around. Sales need to commit to what they need so they can do their job; they need to define what would constitute a sales ready lead and marketing need to deliver it. Now the sales people can be held accountable.
92% of prospects may say No as many as five times before saying Yes …
But 80% of sales people give up by the 4th No! This one is very simple; don’t give up! An understanding of the five Nos, helps sales people to understand what is happening in the minds of their prospects which in turn helps them to stay motivated to keep going.
But won’t this annoy people? Not if you practice “polite persistence”, ensuring you have something different and meaningful to say in response to having listened carefully to the prospect’s response at each point of contact – see above under lead nurturing.