How To Measure Your Lead Generation Effectiveness

Many start-up founders believe that the sales process should be this straightforward:

  1. Get the phone to ring (or e-mail inbox or skype or web contact form)
  2. Tell your prospect about your offering
  3. Take the order

Alas it is normally not this simple, especially if you are selling to businesses. We do encounter some startups that are looking for “smarter prospects” who will buy after they explain their offering but the typical business customer has a more complex buying process. At a minimum the prospect needs to understand your offer, to believe you can deliver the benefits that you promise, and to act based on an important if not critical business need.

It will normally take multiple interactions with a prospect to turn them into a customer. For business customers this may take weeks to months. This means that  you will need to keep track of more than one prospect and more than one contact with each of them. Even for those readers blessed with a powerful memory this will require a system and a systematic approach. There are number of software tools available to track contacts/prospects:

Any of these are acceptable provided that you enter a minimum amount of information for every prospect and every contact with them. To be able to determine if a particular lead generation approach is working you will need to track the source of each prospect’s call and whether or not you ultimately won their business. This allows you to reinforce methods that are working with more time and budget, and to adjust or discontinue methods that fail generate calls that lead to revenue.

We believe that you need to be tracking the following:

  • Opportunity (Contact Name, Company, E-Mail, and Phone): If you are selling to a business you may need to group several different contact names under one company or opportunity name.
  • Source (e.g. Person, Event, Ad, URL):  Be sure to track the path that each prospect followed to find you. Ask if it was a referral (if so from whom), a search engine query, an advertisement, a paper or blog post, or a speaking engagement.
  • Status in sales process (e.g. Initial Contact, Percolate, Pitch/Demo, In Evaluation or Benchmark, Quoted/Proposal)
  • Next Action Date:  Always get clarity with a prospect on when you will contact them next, even if they plan to contact you (e.g. “If I don’t hear from you by Wednesday I will call you Monday of the following week). This should be less than six weeks and is normally one or two weeks for an active prospect.
  • Quoted – Proposal Expiration Date. Never put a quote or proposal in front of a prospect without an expiration date. This sets up two natural follow up points: before it’s due and after it’s expired. This also allows you to have a discussion about their decision time frame (e.g. “How long would you like the quote good for?”).
  • Win/Loss: Always follow through and determine if they ultimately selected another vendor and if they did buy, why did they buy.

Startup founders with an engineering background tend to focus much more on the tool, and selecting a tool, and less on the daily follow through needed to track essential information for each contact with every prospect. For most of the firms that we work with, until they are really scaling up, Excel or an on-line spreadsheet will work just fine. If you have less than 100 leads–not suspects but firms that have actually contacted you and demonstrated interest and a business need–just use Excel and bake the update process into your daily practice.

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