Quick Tip: Understand Community Marketing

Monica Parham
Vice President, Marketing

In the March newsletter, we talk about lead generation in the context of community marketing. The Xsellerate model of community marketing helps you focus on the goal of achieving new clients and projects: the sweet spot at the center of your target.

Terms like suspect, relationship, prospect, opportunity, and client will help you begin to think about building a community of interested and involved people willing to listen to your message and where those individuals and activities fall on your company’s target. Learn more at www.xselleratesolutions.com/resources.php.

Plan: Let’s Talk About Leads

Michael Faul
President

Leads. Everyone wants more leads, but not everyone seems to know where to find them. Perhaps, because of the recession, we should resign ourselves to a no-growth strategy in 2009—then we can all just forget about finding new leads …

Wait! We have a better idea. Suppose we don’t accept that just because the market contracts we have to as well. After all, if our local market remains in a no-growth mode, does that mean all businesses are doomed to achieve zero growth or worse? No!

If the average firm achieves no growth, then some firms will decline, and some will… Well, they will grow. Why can’t you place your firm in this latter category? What’s stopping you—perhaps the lack of significant lead flow?

Throughout 2009, Xsellerate invites you into a conversation about leads. We will explore how to get, grow, and organize leads to fuel your growth. We want to help you learn how to build the pipeline of your dreams.

Interested? Then we invite you to participate in the conversation. Send us topics you would like to see covered. On our blog, post comments, success stories, and questions.

Here’s the plan for dealing with the economic situation—choose not to participate in the recession. Right now represents perhaps the greatest opportunity for your business. Those who whine about the economy and resign themselves to a no-growth strategy will probably get what they plan for. Those of us who dare to move in a more audacious direction will acquire clients, expand market share, and position ourselves well for the day when clients need to spend to win.

Market: Managing Your Lead Generation Community

Michael Faul
President

Traditionally, relationship marketing has focused on a simple premise which was the hallmark of American business—take good care of your customer, and the relationship will become more rewarding over time. Taking care of the customer provides all types of opportunities to up-sell and cross-sell additional products and services to that customer. And, because it’s easier and less expensive to sell to existing customers than to new customers, your margins improve. Simple.

If relationship marketing works so well for customers and clients, will it work for prospects? We need to remember we sell and market to people, not companies, agencies, governments, or associations. People with similar needs will respond similarly to the same offer or stimulus. So it stands to reason that techniques used to warm client relationships can also warm relationships with prospects, making them more receptive over time to your message. But, how do you warm up prospect relationships? Here is the first installment in a series of principles to help you manage your lead generating community.

Note: Learn more about the relationship stages of suspect, relationship, prospect, opportunity, and client by visiting us at http://www.xselleratesolutions.com/resources.php.

Focus your lead generation offers on getting people to form a relationship with your business. Routinely we see marketing pieces, sent to suspects, with offers to make substantial purchases or set appointments. Suspects, not knowing your business or even that you exist, have invested zero trust in a relationship with you. They have no reason to take time from their busy schedule to meet with you or discuss spending tens or hundreds of thousands of dollars with your firm. As a result, very few suspects will respond to these high-level offers.

Generally speaking, about one-half of one percent of recipients will respond to direct mail offers within large batches of 10,000 names or more. Those who do respond have an immediate and obvious need. Hoorah, sales success! If another two, five, or ten percent of the market has a need 12 or 18 months in the future, you may have to run large, ongoing campaigns to continue to engage them.

To improve response rates, scale back the initial offer to provide a high-value enticement such as a white paper or online tool. In exchange, you ask only for the smallest investment of trust—a name, company name, phone number, and e-mail address. By responding, the suspect forms a relationship with your business, and you have the ability to communicate with that individual over time at a much lower cost. Plus, those folks who will be buying down the road now have the opportunity to get to know you before making that decision.

Avoid asking suspects to do more than is appropriate. When you ask a suspect or other stranger to meet with you, you’re asking for a lot. Even if it you offer a free consult, the prospect will invest precious time from a busy schedule. If you request someone to exhibit a behavior not commensurate with the type of relationship you have, they will tend not to act. So, you will receive the best result by asking suspects to do only what is necessary for them to become a relationship, and relationships only that which advances them toward becoming a prospect.

Stay with us for future tips on managing your lead generation community!

Sell: Welcome New Leads with a Planned Follow-Up Strategy

Michael Faul
President

You worked hard to deploy a great marketing campaign and the phone rings, your inbox fills, or you start racking up registrations for your next seminar or webinar. Leads are heading inbound and your job is done, right? Not exactly. In fact, your job has just begun, and what you do next and how quickly you do it greatly increases or decreases your sales success. So we came up with some tips to help you maximize your ability to qualify and advance leads toward a sale.

Who took the bigger risk in forming this new relationship: you or your new lead? They just stepped out of the comfort of anonymity to provide you contact information and put their valuable time, energy, and privacy at risk. What your lead experiences first will determine if and how quickly you can replace that fear with trust. Achieving that objective determines when and if you can convert leads into sales.  Here are four tips to help you build goodwill with new members of your lead generation community.

Get to know the people contacting you. When someone contacts you they tend to provide you limited contact information. You need to complete contact information and conduct some customer intelligence. Go to your lead’s website and:

·         Complete all contact information,

·         Make notes about their product or service offerings,

·         Note if they have multiple office locations,

·         Review their client list, and

·         Check their leadership team

Use the information you gathered to personalize questions and comments for your first contact with your new lead. Being able to personalize your first contact will increase trust and differentiate you from the competition.

Roll out the welcome mat. Send every new member of your community a welcome letter or email. Set up your welcome letter or email as a template with mail merge fields. This allows you to generate personalized welcome notes with consistent messaging and little effort or time investment. In addition to welcoming new members, make them aware of other resources they may find valuable. 

Provide new community members a copy of your privacy policy. This demonstrates your respect for their trust in you with their contact information. Also explain to them your keep-in-touch program, focusing on the benefits of being a member of your community. Invite them to participate by posting comments on your blog or other online forums and download relevant resources from your website.

Begin interacting with new community members—quickly. The longer you wait to contact a lead, the more dramatically your probability of converting them into a sale declines. How much time do you have? Research published by Insidesales.com and The Sloan School of Management at MIT indicates your probability of sales success begins to decline after the first 5 minutes of a new relationship. By the end of your first business day, your chances of qualifying the relationship can decline by more than 25% and the probability of realizing a sale by as much as 20%. Think about that: if you don’t pick up the phone to contact that lead, you become 1/5 less likely to win the deal. You need a process that ensures phone contact within the first business day of a new relationship.

Begin the process of qualifying leads. In Xsellerate’s community marketing model, anyone can enter your lead-generating community. They only need to exchange contact information with you. But, you still need to qualify your community membership. Qualifying leads is not meant to determine if they are “in” or “out” of the community; rather it determines “where they live” within the community.

Do not over-qualify on the first interaction. This tends to turn off your new lead. Rather, determine if you have only a relationship or if your new friend is a true prospect. To do this you need a check list that describes what a good prospect looks like to your business and which describes the behaviors manifested by a prospect. Work your checklist items into a series of qualification questions. You can learn about relationships and prospects at http://www.xselleratesolutions.com/resources.php.

Keep in mind qualification needs to take place throughout the entire sales process (a subject for a future article.) For your first interaction, work your positioning questions into the conversation. Interweave qualifying questions with informational statements so you don’t sound like you are interrogating your lead. Strategically leave some qualifying questions for your next interaction.

The first step in a strong lead management process involves receiving the lead into your community quickly and establishing a meaningful interaction. This needs to take place within the first business day of the relationship. The interaction should be used to initiate lead qualification, but must add additional value to the relationship while inviting the lead to interact with your organization. Properly executed, a strong lead intake process will increase your close rates and, ultimately, your growth rate.

We’ve Moved!

Xsellerate, LLC has relocated to new offices in Chantilly. Please update your contact information with our new address and phone numbers.

14555 Avion Parkway
Suite 125
Chantilly, VA 20151

Main: 703-249-4100
Fax: 866-536-6607
Michael Faul: 703-552-2130
Monica Parham: 703-552-2129

See us on the map

Subscribe to our new e-newsletter, PACE, for monthly sales and marketing tips to help your business grow.

Market: Grow Your Business

How many relationships do you need to meet your revenue objectives and growth goals in the coming year?

By building a community around your business of interested and involved people willing to listen to your message, you can meet and sustain your growth goals. Sales and marketing should take you to a specific objective, and we’ve got a tool to help you get there!

The Xsellerate Community Calculator uses your current sales and revenue data to estimate the size of the community you need around your business to reach and sustain the growth you seek, in any economy. The calculator will help you begin to think about how many suspects you need to reach to build relationships, discuss solutions, and create opportunities.  Check out the free tool at www.xselleratesolutions.com/community-calculator.

Learn more about community marketing at www.xselleratesolutions.com/resources.

Sell: Increase Sales Success by Qualifying Leads

In a tight economy, qualifying leads can help you allocate resources appropriately and increase your success rate. If you qualify and continuously assess every lead in your pipeline, you can expect to generate more successful deals faster, even in tough economic times.

Qualifying leads has more to do with assessing the behaviors of your prospect than it has to do with externally observable factors. Consider four areas of behavior as critically important when implementing a lead qualification process. For each behavioral area, you can continuously ask yourself which of the behaviors your lead demonstrates.

Ability to make a decision and commit to a decision-making process.

You can spend weeks and months pursuing someone, but if they don’t take action you wasted your time and money. Similarly, your ability to engage through their active involvement indicates you have a fair shot at winning the business. Consider if your prospect:

1. Articulates how this decision will happen
2. Identifies key decision maker(s)
3. Has made similar decisions in the past
4. Budgeted adequate resources to support the decision
5. Allows you to engage to win
6. Meets with you in person or over the phone
7. Responds to your sales initiatives

Willingness to build specific solutions for specific challenges

Does your prospect have a need or a want? Prospects with needs move more quickly. Needs arise out of specific business problems or challenges. Wants include those nice-to-have items which enhance operations. Ask yourself if your prospect:

1. Needs or wants a solution
2. Has specific challenges prompting the inquiry
3. Demonstrates a consensus on their team regarding the challenges and solutions
4. Articulates when the need was first identified

Desire to share the competitive landscape

Large competitive purchases convert your specific solution into a commodity. In that world, price becomes more important or the most important criterion. If you can engage earlier and avoid competitive horse races you will win more business at a lower cost of sales.

Prospects who don’t openly discuss the competitive landscape probably don’t care if you win or lose. Your solution is being viewed as inconsequential to their success. As a result, you do not have the leverage you need to win. Rather, you’re gambling that a fair and equitable evaluation will occur. Some top of mind questions to ask about your prospect include:

1. Are they speaking with your competitors? If so, when did they start?
2. Do any of your competitors claim them as a client?
3. Has someone championed your solution and become your advocate?
4. What were the decision criteria on their last competitive purchase?
5. Why haven’t they made a decision yet?

Posses a compelling reason to take action

People probably will act if they have a need. They might act if they have a want. They almost always act if they have a compelling reason. Having a compelling reason tends to motivate all other behaviors the prospect will demonstrate. Compelling reasons to take action have two components—time and consequence.

A specific quantifiable consequence that occurs on a specific date compels people to move forward and conclude business. Otherwise why should your prospect act? In fact, they have every reason to wait for a better deal, more options, a different approach, or any other reason not to finalize a purchase. Consider the following when assessing a prospect’s compelling reason to act:

1. What happens if they do nothing?
2. When will consequences of inaction start affecting their business?
3. Does the solution cost more than the consequence?
4. Can they quantify the consequence?
5. Do they have a deadline and why is that specific date important?

Many of these conventions need to be adapted to specific circumstances. They tend to hold true for larger, more complex, solution-oriented sales situations. In a tight economy, qualifying leads can help you allocate resources appropriately. Just remember, as a sales campaign unfolds, the qualification can change in either direction as you meet more contacts and ask more questions.

Plan: Determine Your 2009 Marketing Budget

Going into a new year, many of our clients ask how to determine what to spend on their marketing. While everyone would like a hard number or specific percentage of revenue as a rule of thumb, Xsellerate asserts that what you spend on marketing depends on a variety of factors far beyond the current size of your business and your future revenue goals.

Perhaps instead of asking “How much should I spend on marketing next year?” ask “What drives my budget?” Do you want to make budgetary decisions based on a percentage of sales, a rule of thumb, what you did in the past, or your marketing plan? The following set of common business planning questions will help you build a set of guidelines to plan your marketing and reach your goals. Then you can align your costs and investment to the plan.

1. Are you trying to grow your business or remain flat next year? There is nothing wrong with choosing to remain flat or acknowledging that you do not see growth opportunities in your market. This does not, however, mean you should stop marketing. You want to maintain your presence, retain your current customers and continue to refresh your base to offset any client attrition.

2. What percentage of this year’s budget did you invest in marketing and what were the results?

• Did revenue increase, decrease, or stay the same?
• Did you increase the number of relationships and prospects in your pipeline?

Certainly, looking backward is not a planning strategy. However, evaluating past efforts, expenditures, successes and failures is a first step in moving forward with new plans. This is especially crucial if you do not have primary market research on your business and services.

3. At what rate do you convert relationships to prospects and prospects to clients? How does that rate compare to previous years? If you invested in marketing and your conversion rate increased, then you are seeing results! If you invested in marketing and your conversion rate decreased, then you need to reconsider whether you are targeting the right people with the right message.

4. What is your typical sales cycle? In an organization with a 12 to 18 month sales cycle, it will take a lot of patience to see results from marketing efforts. However, if you expect to see results from just a few marketing initiatives and lose patience before you build up a healthy, ongoing mix of activities and communication channels, you may find a cash flow and pipeline shortfall a year from now. Cutting marketing overhead could cost you revenue you cannot quickly restore. In addition, when you recognize a pipeline problem and try to rush campaigns to market, you will most likely incur higher marketing expenditures.

5. Has the cost of doing business gone up? While The Fed has managed to control inflation with interest rate cuts, the escalating cost of doing business is having a serious impact on day-to-day operations. It is costing you more to keep the lights on, put paper in the printer, and maintain health insurance for your employees. It’s also costing your vendors more, and they are going to pass those costs on to you. In effect, maintaining a flat marketing budget amounts to a budget cut: you can do less and reach fewer people with the same amount of money, which could put your company’s income at risk.

6. Which marketing activities will go into your plan this year? You may save marketing dollars by cutting back on aspects of your campaigns, but at what cost to your results, conversion rates, and overall revenue? Marketers all over the world have proven that you need to reach people six to eight times through multiple communication channels before they will take an action. When you skimp on a channel or an outreach tactic, you will miss individuals who need your services, but do not even know you exist because they overlooked your direct mail campaign, or couldn’t find your website when they searched by keywords you never optimized on your website.

7. What are your competitors doing? If you have successful competitors who you never see actively competing against you for projects and contracts, they are playing in deals where you don’t even have a seat at the table. This means they are reaching leads not on your radar. Their marketing budget most likely outweighs yours and you are losing customers to the competition!

The most successful marketing plans are strategic—they integrate goals from across the organization and take into account factors about your business, your market, and the economy in which you operate. By defining the company’s needs, planning to meet goals, and then budgeting to the plan, you can expect better marketing results.

Quick Tip: Make it easy for visitors to your website to convert from suspects to relationships

By allowing people to subscribe to your newsletter and other content to help them manage their business, you have an opportunity to show suspects the value of working with you. Don’t make them work to sign up for content you want them to see! Put a registration box on every page of your website so they can quickly and easily subscribe. If you have a blog, activate the RSS feed so they can automatically receive updates in their feed list as soon as you post them!