Sooner or later, business owners realise that lead-generation has a limit. Though subject to change over time, that limit may be considered a natural check on a company's growth: a point at which additional leads can be generated, but not to any great effect. In other words, companies can generate virtually unlimited leads in theory, but in practice they can only convert a proportion of them: conversions are limited.
According to market research, businesses in the UK lose up to 95 per cent of leads - in other words only 5 per cent of opportunities to sell a product or service tend to succeed. Without questioning the reliability of statistics (which in the world of marketing are not always accurate), a conversion rate of 5 per cent would be deemed unacceptable by many companies. But conversion rates can be difficult to assess accurately; after all, when does a lead become a sales opportunity? How many sales opportunities are genuine? What counts as a conversion? Figures may be fudged by sales departments, but most companies suffer from a minimal conversion rate when a conversion is counted as any lead, whether assured or speculative, that becomes a sale.Solutions.
The standard response to the problem of a poor conversion rate is to cast a wider net - however, this can be counter-productive, as companies must balance lead generation with growth.
A poor conversion rate can result from the wrong kind of leads being generated - meaning, directors must ensure their ground-level sales staff are searching for opportunities in the right places. More often than not, however, a poor conversion rate is the result of an inefficient sales process. Rather than seeking new sales opportunities, staff should focus on converting more of their existing leads.
If conversions are an issue, the entire sales process should be evaluated with the aim of addressing the following questions. Are prospective customers given an opportunity to understand the product or service? Do they see each step of the sales process from the outset, or are important links in the chain hidden or obfuscated? Are their needs satisfied?
Understanding the sales process from the buyer's perspective should prompt changes that result in improved conversions. There should be no surprises. The process must be uncomplicated and transparent, while the sales proposition should be sufficiently attractive to businesses or people who are genuinely interested in it. Leads must, therefore, be qualified.
By focusing on qualified leads and prioritising the most valuable among them, less time will be spent chasing unreceptive leads, allowing more resources to be dedicated towards improving the sales experience for buyers.Unique Selling Proposition (USP).
Leads tend to lose interest in a product or service when its USP fails to live up to expectations. The best salesperson in the world cannot expect to convert many leads if the USP isn't good enough. A poor conversion rate might indicate that an offer is simply not attractive enough to prospective buyers. The information made available about a product or service might also be lacking in some respect, perhaps in depth or transparency. Research suggests that making the right pitch or offer can increase conversions by a factor of three (more in some cases).
There is another point to consider when addressing the issue of minimal sales conversions. Lead generation can be very expensive, unlike concentrating on improving the sales process for existing prospects. Greater efficiency, therefore, not only improves conversions for businesses but it also saves them money.
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