We’re all in the business of generating leads. Whether it’s getting people to walk into your retail location or filling the top of your B2B funnel with email addresses, every single one of us benefits when we bring new customers to the table for our companies.
Far be it from me to wax poetic like I’m some sort of lead-gen expert, but in trying to explain lead-generation, lead nurturing and lead conversions to a friend recently, I realized I’ve not tackled the topic to explain it in a way that might make sense for those who aren’t as familiar.
The premise is simple. You generate leads to fill the “top of the funnel.” You nurture leads to move them “down the funnel” where they are closer to a purchase point at the “bottom of the funnel” where you convert them into customers.
But what goes into a strong lead-gen system and how do you know if yours is working? Here are some thoughts:
Lead-Gen: The Top of the Funnel
Who are the people that you could reach out to right now who might be interested in what you sell? Take that list of people and put their contact information in a spreadsheet or on a piece of paper. Congratulations! You’ve just filled the top of your funnel.
Lead-Generation is all about collecting prospective customers so that you can contact them for the next step, which is nurturing. Whether you collect business cards at a networking event, have people fill out a contact form on your website or even give you contact information to attend a webinar or download a white paper you’ve written, collecting their information for future use is Lead-Gen.
From there, it’s a best practice to score the leads and qualify them as either potential customers (which can be broken down into hot, warm or cold leads) or not – people who you met who aren’t decisions makers, just came for the free content or whatever, but aren’t likely to lead to new business.
The potential customer list left is ready to move down the funnel.
Lead Nurturing: The Middle of the Funnel
Once these people are in the funnel, you have to do things to get them down the funnel, or closer to purchase. This is called lead nurturing. You do this with everything from periodic calls or emails, taking the prospect to lunch or, with larger businesses, a drip campaign or marketing automation effort that continually feeds the prospect information that answers their product objections or arouses their curiosity.
To remove the rather sterile nature of the technical aspects of lead nurturing, consider this where you build the relationship. In my opinion, the more personal the nurturing, the stronger the trust, the more likelihood you’ll get them to the next phase, which is conversion.
Lead Conversion: The Bottom of the Funnel
Now that you’ve nurtured the prospect along and answered their questions about your product or service, all that’s left to do is close the deal. This might be a simple, “So when can we talk turkey?” Or it might be the nuance of a proposal, presentation, review which is a process folks in the agency world have to go through to ultimately convert their customers.
There are many that would break down the conversion part of the funnel into many sub-sets or activities, but I like to keep it simple. You get the lead, you nurture the lead, you convert the lead. All the other pieces are just excuses to make it sound more complicated.
Rating Your Efficiency
Now you have your funnel and process set up. You’re generating leads. You’re nurturing the qualified ones. You’re converting those that reach a point of making a decision. But how do you know it’s working? Or how do you know how well it’s working?
While you can be super simple and just measure the number of conversions, using that as your success benchmark, there’s a not-much-harder way to know how efficient your funnel is.
Count the number of leads you get in a certain time period (A). Let’s say one month. Now count how many of those became nurtured leads (B). Now count how many of those converted to customers (C). Based on your current level of efficiency, it takes that many number of A’s (leads) to get that many number of customers (C).
Now track those numbers next month and see if you get more or less efficient. Or see what you can do from month to month to increase leads, OR qualify more of them as prospects to nurture, OR convert more of those to customers.
Assuming you have a satisfactory process you feel is efficient and drives the level of business you need to be successful, then the math becomes easy. In order to get one customer, you need to go find A/C (Leads divided by conversions) leads. So if you have 1,000 leads, 100 prospects and get 5 customers, then in order to get one more customer, you need 200 more leads. (1,000 divided by 5).
Watch those numbers and percentages that move from one level to another over time and you’ll see how efficient your marketing funnel is.
What About You?
Do you have a sales funnel you refer to? Do you have more than the three steps in mine? Do you measure the efficiencies and refer to them to check your progress? Tell us about it in the comments!