Turning Leads Into Sales
Say you're about to conduct your spring direct-mail campaign and attend a trade show. What kind of sales payback can you expect from those - or other - marketing initiatives? Is there any general rule?
M.H. "Mac" McIntosh thinks so. McIntosh, who tracks sales leads for a living, has developed benchmarks that he says can be used at least in business-to-business selling scenarios. Through research studies done for his customers, tracing more than 40,000 sales inquiries, McIntosh has found that 24% of people who respond to a promotion will buy from someone - either you or a competitor - within 6 months. Forty-five percent, he says, will buy within 12 months. "Within a year, nearly one in two will buy somebody's product or service," McIntosh explains.
Here's the formula he likes to use to project a promotion's performance:
(# of raw leads) x (% who will buy from someone) x (average $ sales amount) x (% you contact) x (% you normally close) = gross-revenue potential
If you follow up on leads for six months, for example, you'd plug in 0.24 for "% who will buy from someone." Closing rates vary widely, but whatever your norm is, McIntosh firmly believes it can be bettered by simply following through on the leads sitting in your lap. He's currently finding that companies are following up on only about 10% to 15% of inquiries, on average.