I am sure it will not surprise many if I said that both were as important because one will not work without the other. So far so good, but here are a few questions for you:
- Why do most companies invest more time and money in new lead generation and much less in improving their conversion rate?
- How come every time you increase your lead numbers your conversion rate actually goes down?
- Why should you consider it?
It will be interesting to hear your thoughts on this but as it’s my Blog, I’d better give you my take on things:
- Why do we seem to value new leads over conversion?
Simply put, because it’s easier to measure and influence. It’s not that anyone is particularly stupid but we are all very busy. So, when it comes to lead generation, as it’s a simple number, you can easily work out how many you are getting from each channel, job done. In addition, new lead numbers tend to increase if you throw time and money at them so again, job done.
Improving conversion is much less obvious, which is why we often don’t get around to doing it. To make a difference, you need to work out all or a few of the following:
- Your target markets
- Their problem
- The best solution for it
- Your sales process
- Your follow up system
- Why does improving lead numbers, negatively affect your conversion rate?
I am sure you worked this one out yourself. As your conversion rate is a percentage based on the number of new leads, if that number increases but your conversion stays the same, it will be a smaller percentage overall. This is particularly true If you have a problem converting new leads.
- Why is this important?
Getting these two numbers right, is the key to the success of any lead generation strategy. There is little point in generating leads if you cannot convert them. Many companies I come across are looking for smart solutions to generating new leads and in the process, get carried away with some shiny new methods. From my perspective, it seems like many are looking for colourful plasters to patch up the real cracks. Unfortunately, this can often result in wasted budgets.
- What can you do about it?
Here are a few suggestions:
- Review your strategy
- Work out your actual conversion rate
- Set monthly targets
- Improve your follow up system
- Put aside time and resources for lead nurturing
- Who is affected most?
This is a universal problem but if you are a growing business and employ a sales team, this topic is absolutely key to nail. Often, everyone in your business is very busy and as a result non-urgent, but essential, activities such as lead nurturing and systematic follow up, get put to one side. This means that the money you spend on lead generation is often wasted.
We have recently developed a lead nurturing solution to support this situation. Click here to read more.