Source: Data.com
I like to keep my ear close to the ground…
Scanning for new ideas and powerful strategies, learning from the people I interact with and the businesses I frequent, and always listening for chatter about what’s going on in the marketing world…
And like anything else, some of what I hear is good, some is bad, and some is just plain wrong…
I was just flabbergasted when I saw a recent report from Demand Metric and Showpad, in which 60% of the surveyed B2B marketers and sales professionals named price as the top reason qualified leads don’t convert…
C’mon…
I don’t want to throw anyone under the bus here, but a group of marketers and salespeople blaming price?!?
Gimme a break.
Kind of sounds like they’re trying to keep the heat off themselves.
The real reason B2B leads don’t convert is an imbalance of value, simple as that.
VALUE = Perceived Benefit / Price
If the price is higher than the perceived benefit, it isn’t worth paying for, and… if there isn’t enough value to be had, most customers are willing do go without…
But that’s just the start of it. Let’s dig a little deeper…
Why Leads Don’t Convert
There’s an awful lot of data to suggest that the biggest point of failure for lead conversion isn’t price at all – it’s the lack of nurturing and proper qualifying.
According to MarketingSherpa, 79% of marketing leads never convert into sales…
Can you believe it?
And if those numbers weren’t dismal sounding enough, what about reasons behind that lack of conversions?
- Only 56% of B2B organizations verify business leads before passing them to sales
- 61% of B2B marketers send all leads to sales, but only 27% of those leads will be qualified
- 68% of B2B companies haven’t identified their funnel
- 79% of B2B marketers haven’t established a method of lead scoring
Obviously these marketers aren’t doing everything they could (and should) be doing to qualify, nurture, and convert their leads.
In fact, some sources say that:
48% of sales people never follow up with prospects!
That’s just CRAZY to me!
Especially considering that 80% of sales are made during the fifth to twelfth contact.
The Power Of Nurturing Leads
In the Predictable Profits Playbook, we look at the marketing/sales cycle like the three stages of a relationship: Dating, Engagement, and Marriage.
Following up with a fresh lead is like calling someone back after a first date…
…And continuing to reach out to them to begin forging a meaningful relationship.
You simply can’t get to the next phase of the relationship (Engagement – or the prospect turning into a customer) if you don’t reach out to them and go on some more dates!
But it goes even further than this analogy…
There are cold, hard facts to back this idea up:
- Companies with strong lead nurturing efforts generate 50% more sales-ready leads at a 33% lower cost
- Nurtured leads make 47% larger purchases than non-nurtured leads
- Lead nurturing can increase email response rate by 4-10 times
- Nurtured leads produce a 20% average increase in sales opportunities vs. non-nurtured leads
See, this stuff really works…
What To Qualify, What To Nurture
I can’t help but wonder if some marketers simply don’t know who to qualify, or how to nurture those leads once they’ve been qualified…
It’s going to be a little different for every industry, and even each individual business, but here’s a short checklist for lead qualifying – applicable to pretty much any sales scenario:
- Is this lead the decision maker?
- Does the lead have the money to buy a product or service?
- Is the lead experiencing the problem that your product/service can solve?
…By answering those basic questions, you’ll be well on your way to qualifying a lead as a viable customer likely to make a purchase.
But then what?
Nurturing leads will depend even more on your industry and your ideal customer, but again, there are some basics that will work for most companies and most industries:
- Develop a rapport by getting to know a prospects unique problem and the ultimate result they are after
- Provide immediate value (usually by way of free educational material like whitepapers, webinars, guides, free reports, etc.)
- Create a relationship based on trust (show that you are more concerned with helping them solve their problem than making a sale)
- Stay in touch!
Just taking the steps to qualify leads – and once they’re qualified, working on building a lasting relationship with those leads – will put you well ahead of many, many marketers who let these opportunities fall by the wayside.
By nurturing leads effectively, you increase the perceived benefits of your products and services – and when the perceived benefit is high enough, prospects will see value…
…And price will hardly be an issue.
In your corner,
Charlie