How to Convert a Higher Percentage of Leads into Closed Sales

Step-by-Step Guide

1. 1

   Step 1: Understand the 1% rule.

   Whether you obtain sales leads through trade shows, incoming inquiries or an existing database, identifying which prospects offer the greatest sales potential will ultimately ensure a much higher sales conversion.
   
   Depending on the quality of your leads base and the product or service you offer, studies suggest that as little as 1% of leads may qualify as ideal prospects (i.e., they have a need for your product or service and have a budget allocation or timeline requirement).
   
   Moreover, of those that qualify, you may only see a 1% conversion to sales.
   
   So how do you effectively increase the odds?
2. 2

   Step 2: Define the profile of your ideal prospect.

   Begin by looking back at the sales you closed over the past few years and identify the broad commonalities that existed between each of those companies, for example:
   Were they within specific industry sectors? Was there size a factor (revenue / number of employees / number of locations)? Did geographical location have an influence? The next stage is to identify the key criteria that existed within each one of those companies when you first established contact, for example:
   Did they currently use a similar product / service? If so, what type of ‘system’ did they use? How old was their existing system? Did they have plans for upgrade or expansion? If so, what was the timeframe? If they were not using a similar product or service at the time, what determined or, motivated their interest to purchase? Creating an ideal prospect profile is a fundamental step in understanding your market (in going through the process, you may find that you will need to develop more than one as it relates to different product offerings).
   
   Companies that have a well defined understanding of their target market generate a much higher percentage of well-qualified leads, and your sales people will be much more effective at accurately qualifying sales opportunities from much earlier stage in the sales cycle. , Solid market intelligence and a well defined, ideal ‘prospect profile’ are key to weeding out those leads that do not offer any sales potential while at the same time, identify those that have a potential requirement for your product or service offering.
   
   Obviously, if you have incoming inquiries then you are at a distinct advantage as we can assume that someone is calling because they have an interest in your product or service.
   
   That said, the following sets of pre-qualification questions (see below) are still a good guideline to follow.
   
   If you are following up on trade show leads, I would suggest following the pre-qualification question protocol (see below) to gain key market intelligence prior to speaking with the individual you or your sales team met with at the trade show.
   
   This will provide you with an opportunity to speak with more ‘insider” intelligence, allowing for a more focused discussion.
   
   For outbound cold calling, the following steps are critical to success. , Ongoing prospect list cleansing is a critical component to sales and marketing success and can have an enormous impact on your ability to improve efficiencies and drive down costs by reducing inaccuracies:
   The most up to date contact and address information Accurate telephone numbers and email addresses Parent company and subsidiary flagging Information augmentation Removal of duplicates Develop a list of 4 to 5 general questions to ensure that a lead fits your key prospect profile (this information can usually be obtained from the receptionist and as a result makes fast work of the first cut), i.e.:
   Specific industry sector Size (revenue / number of employees / number of locations / etc.) Ensure this is the decision making location Identify whether or not they would be a good fit for your product or service in very general terms (if for example you sell storage and racking solutions, identify whether or not they have a warehouse or storage facility) Identify the name of the decision maker (plus title and department) if they fit the above criteria Generally, this first cut in pre-qualification (if outbound calling) will generate 60
   - 100 completed calls per day.
   
   Of those, you will be able to weed out those companies that are not a good fit (remembering to update pertinent information in your database).
   
   For those companies that fit your ‘general’ target criteria, stage two of the pre-qualification can take place. , Develop a list of 3 to 5 questions designed to identify specific key criteria as it relates to your product / solution offering.
   
   Position these questions at a manager level individual within the target department rather than the key decision maker (Dir / VP / C level).
   
   Still using our example of storage and racking systems:
   Do they currently use storage / racking systems (If not, do they have plans in the future for a storage facility)? If so, what type of system do they use? How old is their existing system? Do they have plans for upgrade or expansion? If so, what is the timeframe? What is the approximate square footage of their warehouse / storage facility? The answers to these questions will help you twofold:
   One, you will have gathered solid market and lead intelligence and two; you will have identified those prospects that may have a short to mid-term requirement.
   
   For a more detailed explanation of how to pre-qualify leads, please refer to the LifeGuide Hub article How to Build a Highly Targeted Prospect List for step-by-step instructions. , You know your product or service inside out, so you may be wondering why you need to develop a script.
   
   That's because, in the business of cold calling, you have 30 seconds or less to grab someone's attention so your pitch had better be spot on:
   Tie in key issues relative to the range of services offered, incorporating strengths, benefits and value proposition Tailor the approach to accommodate a discussion with the appropriate industry sector and relevant company officers (operations, finance, IT, marketing, etc.) Anticipate all possible objections and prepare appropriate responses Structure questions that are designed to draw out information and involve the prospect For a more detailed explanation of how to develop a script, please refer to the LifeGuide Hub article How to cold call effectively for step-by-step instructions (which also covers: getting past the gatekeeper / dealing with objections and closing for an appointment). , Follow-ups should be timely and reliable.
   
   A CRM solution can be of great benefit in managing this process by ensuring that opportunities do not fall to the wayside.
   
   In addition, you might consider developing an email marketing campaign.
   
   Maintaining regular contact with your customers and prospects can be a successful strategy in staying ‘top of mind’.
   
   In addition, by keeping them informed about new products and services offerings or relevant industry news, you can gain a significant competitive advantage. , Companies with an ill-defined sales pipeline need to refine the parameters of what a genuine, sales ready opportunity actually looks like.
   
   There are several key benefits to developing a sales pipeline:
   Sales / revenue projection Easily manage sales activity at key stages in your sales process Identify area's that require immediate attention A shortfall of pre-qualified leads A drop in sales conversions at the proposal stage Begin by looking at your existing client base to identify the steps you took to prior to closing a deal, for example:
   Lead:
   A lead is company you have not yet contacted.
   
   That said it should have a similar profile to your existing client base (industry sector / size / etc.) Qualified prospect:
   This is a prospect that fits most if not all of your pre-qualification criteria; they currently use or would benefit from your product or service / they have an ongoing need and or plan to implement or upgrade your specific product or service within the next 1-5 years.
   
   Those companies that will likely close in the shorter term should be maneuvered towards being active prospects and the longer-term prospects should be nurtured.
   
   Active prospect:
   Through discussion, you have identified that a prospect has a need for your service and they in turn have confirmed an interest in your offering.
   
   You have confirmed that they have both a budget and timeline requirement.
   
   Both you and the prospect have agreed to a next step (be-it a follow up discussion / a demonstration / a quote / etc.).
   
   This can be a lengthy and time-consuming process but it is one of the most important periods in the sales process.
   
   Committed prospect:
   Commitment to move forward may come in the form of verbal commitment however; you may still be in the process of ironing out the details.
   
   A transaction may be contingent on certain terms being met, so this is still a critical stage in closing the deal.
   
   Closed:
   A sale has transpired when a contract is signed by both parties and delivery dates have been confirmed.
   
   At this stage, the sales person may move onto the next opportunity and or he/she may be responsible for managing the account. , For the purposes of this example, this article shows percentages as they relate to each stage in the sales cycle.
   
   However, it is recommended that you replace these percentages with actual numbers when developing your own pipeline.
   
   Begin tracking the number of raw leads and each subsequent step in the sales cycle to ascertain the number of leads necessary and the time required to achieve each closed sale.
   
   This will help determine not only the volume of leads required to grow your business but also, help you to identify where there are weaknesses in the process which may need addressing.
3. 3

   Step 3: Start the process.

4. 4

   Step 4: Improving the overall quality and accuracy of your lead base: The first step in converting a higher percentage of leads into sales starts with improving the overall quality and accuracy of your existing data base.

5. 5

   Step 5: Do stage two of pre-qualification.

6. 6

   Step 6: Develop your script.

7. 7

   Step 7: Do the follow-ups.

8. 8

   Step 8: Develop a sales pipeline that generates significantly more revenue.

9. 9

   Step 9: Refer to the example of a lead funnel and sales pipeline.

Detailed Guide

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