Passengers using subway in Tokyo Japan. Accounting the subway lines and all the other railways that operate in Tokyo 40 million people travel with this kind of transportation everyday in the city.

Is Your Lead Generation System Causing You to Lose Clients?

Much sales literature talks about sales in terms of processes. A key process element is lead screening, or lead qualification. And that process is often described in terms of efficiency.

As one CRM article put it:

“…the process of lead qualification has been codified into the 8-4-2-1 Rule…for every eight leads that pass preliminary qualification, four will lead to sales presentations, which will produce two quotes and finally one sale.

“In other words, the sales funnel narrows sharply even once you’ve done your preliminary qualification. Obviously, considering the increasing cost, the further you move into the process, the better it is to narrow the funnel early on. If you can reduce that 8-4-2-1 to a 4-2-2-1, you’ve saved half the cost of lead handling.”

Think about that. The focus is on how to do sales cheaply, efficiently, and at least cost. This may seem an obvious and good goal until you consider what it leaves out: the impact on the 7 out of 8 who are screened out.

By focusing on sales through the twin lenses of process and efficiency, we run the twin risks of damaging client relationships and of poisoning the marketplace well. And as online social media continue to explode, that risk only increases.

How Lead Qualification Can Hurt Relationships

Imagine somewhere it’s important to make good relationships. Maybe your child is entering a new elementary school. Maybe, if you’re single, you’re entering into the dating world in a new community. If you’ve switched companies, you’re getting acclimated to your new co-workers.

In those cases, we know the importance of treating everyone decently. We have our likes and dislikes, but we don’t let them affect our etiquette. It’s a small community, and we know the value of getting along. And so we behave in polite, decent, ways.

Not so in the world of sales. The screening process drives focus on one question: can I or can I not sell to this person?

If the answer is no, we want to stop wasting time on them. If the answer is yes, we want to move as quickly as possible so as to achieve our end result—the sale.

You may personally believe in relationships and in being nice, but if you walk around with a lead-qualification model in your head, you are subconsciously driven to treat your leads as primarily means to your ends, with some taking more of your precious time than others. This attitude inevitably bleeds through into your interactions.

Lead qualification as it’s usually practiced hurts relationships because it is inherently self-oriented, aimed at the seller not the buyer.

How Lead Qualification Can Poison the Well

When services firms look at the cost of sales, they often begin by focusing on the clients they’ve won and how much it cost to win them. They forget the much-higher cost of not getting all the clients they didn’t get, thus under-estimating cost of sales.

A similar blind spot affects firms looking at their lead qualification process. It’s simple to drop someone from your target list; having dropped them, they are out of sight and out of mind. Your sight, your mind, that is.

But they have memories of you. Did you simply drop them? Did you not return the last call? Did you cancel some meeting or event? Did you give the screened-out client any indication that they had been screened out?

Most firms don’t have any particular approach to screening out prospects; they simply stop doing what they were doing. Yet the same people would never drop a social relationship.

Should your child just begin ignoring a casual new acquaintance at school? If you’re dating, should you simply not call back after a first or second date? At work, do you simply turn your back on new acquaintances?

The reason we do in sales what we wouldn’t in social situations is that we assume closed social settings, but infinite lead streams. It’s just a lead, we rationalize. We’re a tiny firm, and the market is huge. There are always more leads.

But there are not. Leads are finite. Worse yet, many prospects know each other. Word of mouth doesn’t just work among customers and ex-customers, but among leads and ex-leads, too. Your reputation is greatly affected by the way you sell, and part of that is how you treat people you screen out.

The old customer service rule of thumb was that a person would tell four or five others about a good experience, but he would tell several dozen about a bad experience. In an age of YouTube and Twitter, negative stories don’t stop at a dozen—they explode to tens of thousands, and in just a matter of days.

The Only Two Screening Decisions You Have to Make

The lead screening process and underlying mindset can make us treat prospects as if we were examining them under a microscope for incipient dollar signs in our wallets. It drives self-focus and makes objects of our prospects. It dehumanizes both of us, and it pollutes our prospect base at a frightening rate. Lead screening processes done poorly equal self-destructive marketing.

Fortunately there’s a simple answer. There are just two screening decisions you must make:

  1. Are you willing to treat this prospect as a potential client?
  2. When shall you review this decision again?

As long as the answer to question one is yes, just one goal should drive your behavior. That is to determine whether and how you can help a prospect, by talking with them.

  • If you figure out how to help them, and they agree, a sale is the natural result.
  • If you figure out how to help them and they don’t agree, you have failed to communicate; that’s your fault.
  • If you decide you cannot help them, and they agree, you should thank them for the chance to explore together, and leave on good terms.
  • If you decide you cannot help them, and they don’t yet agree, you owe them the decency of an explanation that is satisfying to them.

Screening should not be a solo and self-oriented decision about timing based on what’s in it for you. It should be a consensus-based joint decision about whether to continue the dialogue, based on what’s in it for both of parties.

Done that way, a screen-out is nearly as positive as a sale because it implies a joint decision. Screened-out prospects become good marketing. After all, such joint decision-making is how we develop responsible and mature relationships with others.

This article was first published on RainToday.com

 

4 replies
    • Charlie
      Charlie says:

      Aaron, did you even read the blogpost? If so, then you have no sense of irony.

      The post was about the indiscriminate use of lead gen techniques without regard to the effect on those screened out. Then, by way of “response,” you advocate using a lead gen technique and – if it doesn’t work – just moving on, with no regard for the effect on those screened out.

      On top of that, you link to your own self-serving article – AND, you quote word for word from your own piece. Can’t you even manage to write an original commentary?

      This is a great example of what’s wrong with digital marketing – because it enables people to behave like a spammer, people end up behaving like spammers. That is, thoughtlessly blasting out information which is bound to be irrelevant at best and annoying at worst to the vast majority of recipients. Like your comment.

      Reply
  1. Charlie
    Charlie says:

    [This comment from Rich Sternhell, via email]

    Re Lead Generation. It is a fascinating subject, but varies so much by business type and industry that I found the article irritating in parts.

    My first real sales job was selling encyclopedias. I walked half of Long Island ringing doorbells….clearly leads were not a factor in my sales. My next real sales job was in life insurance. Leads were the lifeblood of the insurance sales rep.

    I vividly remember my early training. I was told that if I made 30 well-executed calls on Sunday, I would likely get 5 appointments for the following week. If I did a good job at those 5 appointments I would likely make one sale. Over and over I was told that if I wanted to make two sales, the most effective way to get there was to make 60 calls on Sunday.

    Improving the quality of those calls beyond a basic level would not make a significant impact on the number of appointments I made nor would improving my pitch beyond a basic level increase the number of sales. When I talked with the top salespeople (and I had access to them because my father was EVP of the company) they told me the same thing. They said once I started making sales that I could network and I could get repeat business but the basic rule never changed, 30 calls would equal 5 appointments and one sale.

    In consulting, I never once thought about a lead. I knew the companies I wanted to sell to and I knew the positions at those companies that could buy my services, and I worked my ass off to find out who those people were and then to get to know them. Once in a while we would get a random call from a non target company and we always treated them politely, would usually meet with them and then nicely explain why someone else would be better able to serve them. We made a lot of friends from regional firms for those referrals.

    I hear commercials all the time for lead generation services and can’t even imagine what value they provide. Even in the life insurance business where it was not unusual to buy lists of new homeowners, recent birth announcements, wedding announcements, etc., those buying those leads rather than working the sources themselves were generally doomed to failure.

    I think you made a number of very good points in the piece, but lessened its value by not giving at least some context as to why and where the piece was relevant.

    Reply
    • Charlie
      Charlie says:

      Rich,

      Thanks for this comment. I very much agree with you; an awful lot of sales advice should be made contingent on the business in question, because the nature of the sales role varies considerably. (I wrote a blogpost once on precisely this point…)

      So, mea culpa. I am guilty here of what a huge amount of sales writers do, which is to write as if one size fits all when it comes to sales. (And it’s not just lead gen: it’s also issues like closing, pipeline management, sales coaching, recruiting and the like).

      I’m inclined to give myself a partial pass here because most readers of Trust Matters are in complex, often-intangible businesses where the quality of interaction does have an effect on your marketing (unlike the very good counter-example of your new-customer life insurance example). But, your point is right – this point doesn’t fit all businesses.

      I must agree strongly with you re the plethora of lead-gen marketers out there on whom the subtleties you suggest are completely lost. Take the case of Aaron, the first commenter on this blogpost. Clearly he did a search on “lead generation,” then cut and pasted some boilerplate language from his own blog – ironically and unknowingly providing an object example of exactly the point I was making.

      This is stupid marketing – marketing that poisons its own well. I also have very little idea who finds value in these kinds of services. It is right out of GlenGary Glen Ross, and I get calls from lots of people trying to convince me of its value. Someone must be buying it – I have no doubt there is a business out there where people find it more attractive than I do – but I don’t know who. My experience is the same as yours – people who buy leads rather than work sources don’t do as well.

      Reply

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