Why 75% of Your Lead Generation Budget is Wasted Yearly

budget-analysis

Marketing and lead generation is one of the most important parts of growing a business. Firms without leads and prospects are destined to stagnate. Continually generating new leads creates new business opportunities and more revenue. Still, most of the leads do not turn into sales. They are wasted one way or another. Companies need to acknowledge their lead generation budget problem and address it head on.

Lag Time

First and foremost, a lead generation budget is wasted because the lag time between the inbound lead and the time the sales person reaches out to him or her. In fact, the average lead is contacted over 46 hours from the time that they first indicate their interest. This is simply unacceptable.

Studies show that a lead is far more likely to buy if they are contacted within the first hour than two days later. An inbound lead by definition is learning about the product or service when they are entering their information. They are interested in the topic and clearly want to know more. They are receptive to a conversation about the product and are likely to buy.

On the other hand, a lag time of two days leaves the prospect wondering about what the sales person is calling about. They may have lost interest and definitely are not in as much of a hurry to start the sales process. For that reason, lag time between an inbound lead and a first contact is absolutely crucial.

Lead Program

Another reason leads are wasted is because there is no adequate lead nurturing program. Companies need a way to nurture and leads and turn them into real sales. A lead nurturing program is not actually that difficult to implement. In fact, lead nurturing should be the de facto way that companies incorporate new leads into their CRM and sales process.

Simply put, lead nurturing allows those buyers that ready to buy be Lead Generation Budgetcontacted first while those that are not ready to be de-prioritized. When this occurs, the leads that have the highest propensity to buy are immediately contacted and converted. Those that have a low propensity are contacted through automated emails and receive follow-ups every few days or weeks.

As their browsing activity intensifies, these leads are then moved up the chain so that sales people can reach out to them and immediately close the sale. Using sophisticated technologies, marketers and sales people can actually gauge the increased intent of a lead and contact them at the right time to close the sale. This dramatically reduces the chance that the lead generation will be wasted and increases the sales rate.

Funnel Leads and Add Urgency

Placing leads from lead generation in a funnel system based on their intent to buy helps companies make the most of their leads. The prospects that have the highest intent should also get the most pressure to close at that moment. Companies can add urgency by allowing sales people to offer one day sales for example. They may also ask the prospect two or three times directly to place their order immediately. This only works if the prospect is actually ready to buy. For those leads that don’t have enough information or just starting the process, the additional urgency may turn them away from the firm. However, leads that are ready to buy will respond positively to the urgency and close at a higher rate. For that reason, the funnel is crucial to helping sales people to have a higher likelihood of success.

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