Benchmark: Death of a Sales Lead
"Bingo cards" aren't worth a damn. That's the nagging fear of advertisers who "play" the trade publications. And that perception may explain why so many reader-response cards spend eternity in a shoe box. Many industrial marketers don't properly follow up on those leads. Call it apathy or just plain disorganization, but the results are the same: lost sales and wasted ad dollars. Performark, a Minneapolis business that helps companies close on leads, replied to 17,000 advertisements placed by some 10,000 industrial marketers in 200 trade publications. The minimum cost of the advertised capital goods was $5,000. The six-year study revealed that --
1. Most advertisers respond with literature -- but not very quickly.
The average response time: 58 days. The record: 537 days. The cost of fulfillment packages ranged from 57¢ to $25. Nearly one in five advertisers failed to enclose a letter.
Advertisers' response time:
from 60 to 120 days 33%
from 13 to 59 days 33%
never responded 21%
more than 120 days 12%
2. And few advertisers follow up with sales contact.
When advertisers do make sales contact, it's after an average wait of 89 days and as long as four years. Direct-sales forces are more responsive than manufacturer's reps and distributor/dealers.
Advertisers' sales contact:
did not follow up 87%
followed up with a call or a visit 13%
3. The result: fewer qualified leads and sales.
When you plug in averages for qualified leads (read: bona fide opportunities) and the sales-closing rate, it's clear the marketers as a group lost money on their ads. But that's nothing compared with the sales they forfeited and the ill will they engendered by not responding to potential customers.
Formula: from inquiries to sales
13% contact rate x 25% qualification rate x 10% closing rate x 17,000 inquiries = 55 sales
55 sales x $5,000 (minimum) ticket = $275,000 in revenues
Ad dollars spent = $1.7 million
Loss = $1.4 million
Note: There's no way to know how many advertisers disqualified Performark on sight, but Performark's findings parallel other studies. Last year Performark updated its original study. Not much had changed, but the company found that the smaller the ad was, the faster the response. Call Performark at 800-888-2014 for a copy of The Current State of Inquiry Management.