What is a Lead?
Do you count the leads you bring home from a tradeshow? How do you determine what is a lead – exactly? Is it the name and contact information of a person who has expressed interest in your product or service? Is if a business card from someone who dropped it in a fishbowl at your booth because you were giving away a prize? Is it a name on a list of contacts that you know are buying your type of product or service?
Gathering the leads from a tradeshow is important. But just as important, perhaps more so, is knowing the quality of those leads. Do your new leads have an interest in what you do? Are they in the market? Do you know what their buying time frame might be?
The more information you can glean from your contacts, the better you can categorize those leads. As long as your prospect possesses the criteria that you set they have the essential qualities to eventually become a customer – and they’ve become a lead.
How much is your lead worth? If you’re going to a tradeshow to sign up distributors, and you know that in the past your distributors have ordered on average $20,000 worth of goods from you in the first year of being a distributor, and you also know that you have signed up one out of four qualified leads in the past two years – each new lead is worth about $5000 the first year.
Let’s look at it from another angle. Say you spend $28,000 exhibiting at two industry shows a year and gather about 350 leads through those shows. Your cost per lead is $80 ($28,000 / 350). If you are able to consistently show that one in four leads converts to a sale, your lead-to-sales conversion rate is $320 ($80 x 4).
So now you’re able to put a number on those leads that’s realistic. Let’s say you have a salesperson who can close one out of three qualified leads. His cost per lead is lower, and his lead-to-sales conversion is higher. If you have a salesman who’s not performing as well, his cost per lead is higher. Or, look at is this way. Since your leads are worth on average $5000 the first year, by closing on just one out of five leads, that represents a lost opportunity cost of $5000.
Key point: be sure to differentiate between contacts and leads
Now that you can estimate the value of your leads, it becomes that much more important to make sure you’re following through with your lead generation and capture process at your tradeshows. After all, you’re investing thousands in those leads! Make sure they pay off!
What system should you use? Anything that works. It could be an electronic scanning device. It could be a clipboard where you fill out a short bit of information. But to make it workable, it should be quick, convenient and accurate.
Before capturing the contact data of the lead, confirm that they’re qualified. This may be as simple as asking a question or two to determine that they’re interested in your product or service, to running through a longer process of Q and A, depending on the complexity of your offering.
Key Point: Convenience and Accuracy are the most important in gathering leads
Sifting through the visitors
The first thing when it comes to choosing whose data to capture is to immediately take the attitude of disqualifying everybody. Once a person confirms they are NOT interested in your product, you know you do NOT need to capture their information.
At the top of your list are those prospects who are ready to buy. For these you may have a sales person talk to them on the spot. Even if they say they are ready to buy, take a moment or two to run them through the few steps or questions prepared by your sales team to confirm their stance.
In between the non-buyers and the hot prospects are the rest – those who are expressing a level of interest, but may not be ready to buy right now. If you’re able to, you should determine the time frame that they might want to purchase. If not, you can at least indicate that on your data capture so the sales person has as much information as possible. The more information you can reasonably gather before the show is over saves time and money on the follow up after the show.
Your lead data form can include anywhere from a few pieces of information to 20 or 30 points that you may want to cover. Certainly you’ll want to make sure each lead has basic information such as the employee who captured the data, what show you obtained the data at, the show date, etc. Your contact information would include as much or as little as possible – the more qualified the lead appeared and the more receptive he was to information, the more data you’d want to get from him. But each person should be handled on a case-by-case basis, so that the information is individualized – which is they way they’d probably want to be treated, anyway!
The next step, of course, is to hand all of the leads over to your sales group after the show to turn those leads in to revenue as soon as possible.
Key Point: Leads are Potential Cash
Look at each lead as a source of potential revenue because that’s exactly what it is. Based on your past performance, you can safely determine about how much each lead is really worth. The more you refine and test your lead generation system, and try new things, the higher the value of each lead. You may find as you refine your process of qualifying leads, the actual number of leads may drop – but the potential value of each lead increases.
Now that you have determined how important each lead is, what’s your next step?
Make sure that your sales group is in immediate follow-up mode once the leads come back. It’s been said that anywhere from 60 to 80% of all tradeshow leads are effectively trash-binned because they’re not properly followed up on.
If you can effectively follow up on even half of your qualified leads, you’re going to lead!