It can be very tempting to look at the number of leads you have compiled and be satisfied. However, those figures can be deceiving and may eventually do nothing for your bottom line.
“More leads” does not mean that “better” sales are the only objective. You can generate hundreds of leads, but if none of them convert then you just wasted precious time and resources.
Not All Leads are Created Equal
A quality lead is not someone that just gives you their contact information. If they do not fit your target audience, they will most likely not convert and hinder the productivity of your staff. In economics, there is a concept called “the point of diminishing returns”. “The point of diminishing returns” refers to when the effort/resources expended becomes disproportionately high compared to the output.
Some customers are more ideal than others. This means they will spend more, purchase related products your company offers, and make referrals. How you find the ideal lead is by analyzing your existing customer base, finding the high-quality customers and documenting the attributes that make up the ideal prospect through your CRM Software. When you clearly know the leads you want to target, you increase the number of leads you close.
Retention over Acquisition
The best way to generate leads is to spend more on customer retention and less on the acquisitions. Studies show that only 12% of marketers focus on retention, despite the fact that it costs five times as much to acquire a new lead.
When devoting resources to existing customers to either upsell, cross-sell, or resell your efforts will be focused and have a much higher probability of converting. A recent study showed that just a 5% increase in retention spending can yield anywhere from 25 per cent to 95% in returns! This is especially true if you already started with a base of high-quality leads.
Quality over Quantity
It’s not about collecting as many leads as possible but rather collecting leads that are most likely to lead to a sale or stay engaged with your product/service. These leads get added to the CRM software database where future communication is much more customized and most likely stems directly from a sales representative. In this scenario, a brand would measure their spend vs the number of qualified leads that turned into sales. The benefit that a lead would typically receive in this scenario would be a bounce-back offer towards the purchase.
A comprehensive CRM tool that is customized to your needs will help you distinguish between good leads and bad and assist you with retaining the current client base for longer periods. Don’t be afraid to say no. It’s better to be upfront and honest, then to make consumers purchase a product or service that they may not need. Remember: your reputation is more than the acquisition. Click here to try our CRM tool 30 day free trial.