In a recent company consult, I came across an all-too-familiar scenario.
The company had a team of 10 sales representatives. They had a great product.
They had an external automated lead-generator service provider costing them somewhere around $1,000 per month. This was an automated, seven-email, triple opt-in system that fed hot leads (defined as someone who bothered to go through all three opt-ins) to the sales team. This service was sending, literally, thousands of emails each month.
Internally, the company in question had added the responsibility of coming up with content and artwork for the email campaigns to two of their already employed administrative staff members. This was over and above their normal duties. Conservatively, this work would be worth around $4,000 between the two employees' apportioned time in terms of man-hours for the project.
If my math serves me, the cost of the service plus the cost of the employees' time makes $5,000 per month over 12 months, totaling a $60,000 “investment” into getting hot leads.
So, why was I there?
Well, the company had barely made their target the previous year. They were so far behind on their current year that they would have to produce four consecutive record-breaking months just to hit their target.
What Went Wrong?
I am against a company on the small side investing $60,000 per annum and running behind target when an incredible second option exists.
Obviously, a host of questions go off in a business owner’s mind at this point.
"What's the problem with the content, the look and feel of the emails, the messaging of the emails, etc?"
"Is the staff not as good as I originally thought?"
"Is there an issue with the quality of the product, price of the product, delivery, after-sales?"
"We were getting leads who’d triple opted in and we're still running short on target?"
Some statistics to reflect on:
- Only 23 percent of sales emails are ever opened
- The average email opt-in rate across all verticals is 1.95 percent
- Actual closed deals are often touted at 1 percent of 1 percent vs. sent emails (you’ll struggle to find actual stats on this — my info is from personal research as I’ve spoken to companies)
Let me be clear: I am not against email campaigns or social marketing. Please read that again. I am against a company that is on the small side investing $60,000 per annum and running behind target when an incredible second option exists.
Picture this:
- 100 percent of first emails opened
- 90 percent of sales meeting/opportunities vs. email contact
- Actual closed deals per sent emails: 60 percent
Yes folks, the all new, guaranteed-to-boost-your-sales method taking serious sales professionals by storm has arrived. It’s called….
Referrals. Really.
Some more statistics to consider, courtesy of IDC:
- The majority of executives (73 percent) are more inclined to work with sales professionals they meet through someone they know
- The income of salespeople who seek out and exploit referrals is 4 to 5 times higher than those who don't
- 92 percent of buyers trust referrals from people they know
- 91 percent of customers say they give referrals; only 11 percent of salespeople ask for them
- Companies with formalized referral programs experienced 86 percent more revenue growth over the past two years when compared to the rest
- The lifetime value of referred customers is 16 percent higher on average than that of non-referred customers
After all of these years, referrals still out-perform pretty much all the competition when it comes to closed deals.
And I don't want to forget to mention: It's free!
Yes, it's totally free.
I love social media. I love emails and automated systems. They are absolutely helpful, but personal referrals, after all of these years, still out-perform pretty much all the competition when it comes to closed deals.
The reality is very few people suffer from problems closing sales. They suffer from problems opening, inasmuch as they don’t have enough clients to get in front of.
Let me finish where I started. The best place to get new business is: new business!
Ask for referrals.
Want to talk about boosting your sales? Give me a call.
What's holding your business back?
About the Author
OneAccord Principal Brad Thomson is a sales leader and pastor with a passion for seeing people live up to their fullest potential.
As a salesman with experience in investment products, furniture, IT, life insurance and short-term insurance, Brad has sold goods ranging from the unseen (insurance) to the misunderstood (IT). Brad's passion to see people develop their potential led him to study human resources, then open and run his own recruitment consultancy. As a consultant, he helped people and businesses thrive by finding the right fit for their unique situation.
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