As the transaction or contract value in B2B markets is high (in comparison to consumer purchases), Buyers want to ensure they’re selecting the right partner. This will usually require multiple discussions by phone, face-to-face or online meetings, in addition to quotes, proposals and negotiation by phone and email.
This human interaction with knowledgeable and skilled Sales people, explains why a high performing Sales team is a necessity for most B2B businesses.
It means winning new business takes considerable investment. But equally, the value of each customer can be significant, so even a handful of good, new-business wins each year can make a huge difference to your bottom line.
For many business leaders however, the performance of their Sales function is often a major frustration, influenced by a host of factors; the level of competition in your market, the strength of your proposition, pricing, and of course, simply how good your Sales people are.
These are complex issues, which are often difficult to quantify hard to accurately understand, measure or influence.
There is however another factor, which is absolutely measurable and often the major driver behind the success or otherwise of your Sales function.
Are your Sales Team Busy Enough?
And by that question, we mean are they genuinely busy, meeting sufficient potential new customers to keep their pipeline full, as some leads qualify out.
Lead Generation is often the weak link in the chain.
It’s hard to convert leads into customers. Many Buyers are risk adverse, so will stick with an existing supplier despite frustrations they may have with them or shun new products or services because it’s easier to maintain the status quo.
These are challenges that often won’t have an easy fix. But if you have enough leads, the pitches you are successful with don’t hurt as much because you have more good opportunities in your pipeline.
What’s your Real Cost Per Lead?
Good Sales people don’t come cheap. Often this is overlooked when considering the cost and therefore the value of good Lead Generation.
Here’s an example of the ROI from integrating the analysis to combine the overall sales and marketing costs.
|Costs||Sales Person A
(too few leads)
|Sales Person B
|Salary, Bonus, Car, Benefits||£65,000||£65,000|
|Cost Per Lead||£500 per Lead||£500 per Lead|
|Total Marketing & Lead Gen Cost||£36,000 per Year||£96,000 per Year|
|Annual Sales & Marketing Cost||£101,000||£161,000|
|Average Total Cost Per Lead||£1,402||£838|
Give Your Sales Team the Best Possible Chance of Success
The figures are clearly only an illustration. In some markets, a cost of £500 per lead may be prohibitive, in other markets the costs to generate a qualified lead will be 4-figures.
But a common across all B2B markets – regardless of the ease or otherwise of lead generation – is that Sales teams that have a regular flow of new opportunities hit their numbers more than Sales teams that don’t get many new leads.