Quantity, quality or both: The numbers game revisited

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cold calling
Cold calling -- telemarketing -- plays the numbers game -- but does it really work?
cold calling
Cold calling — telemarketing — plays the numbers game — but does it really work?

Years ago, when I took my first sales training course, the instructor explained that lots of “nos” should not discourage you — you will ultimately obtain a “yes” if you continue. The “numbers game” concept has been engrained in cold calling concepts — pump out 100 calls to sometimes only marginally qualified prospects, and you’ll possibly win an order or two.

For most of us, this exercise quickly becomes demoralizing, and I sense only strange and possibly mentally disturbed individuals can make this sort or work a long-term career. Yet “numbers game” practices continue: I probably receive two or three calls a year from a someone “acting on behalf of” an investment advisor trying to set up an appointment. The advisor presumably has obtained a list of business owners, and hires or contracts with someone to make the difficult cold calls — he then moves in for the close on the few that accept the appointment offer.

That sort of “subbing” occurs in other cold-calling environments, reflected on the internet in spam/bulk emails, and in marketing come-on offers designed to elicit large numbers of responses, which can be processed through the so-called sales funnel.

The sales funnel
The sales funnel. Is this the right way to determine your leads/business?

In the AEC world, the numbers game plays out in the retail sector in canvassing campaigns (yuck) and in the ICI space, in grinding out and responding to any RFP opportunity that arises, with the goal of spitting out as many responses as possible, with the hope that one or two might eventually stick.

By now, you probably have reached the conclusion that I don’t think too much of this model for marketing and business development, but of course, the numbers game has an inverse side — refusing to measure, calibrate, and closing your mind-door to strategies to reach out and beyond your existing client base. At the extreme, you “don’t market” and “rely exclusively on word of mouth and repeat/referral business.” Or you advertise wherever you wish, without embedding a lead tracking/conversion measuring process.

The happy middle-ground, I believe, is to look closely at your numbers as they are now and ask some important questions, through research.

  • What is your lead/to sale conversion rate?
  • Where are you obtaining your original leads, and in what quantity (and if you can, how does the source lead conversion rate measure up with leads from other sources?)
  • If you have spent money on marketing: How much do you spend for an initial lead; how much is a client “worth” (net) immediately and over a lifetime — measured by your net profit/revenue?

Then you have some market questions to answer:

  • How many potential clients are in my marketing universe?  How many of them can we reasonably expect to win?
  • What can we tell about these clients: Their interests, physical location, educational level, social and association groups and organizations, media they view/read, and so on.
  • What are your industry norms/comparables (often you can learn this through your relevant trade associations?)

With this data, you can begin experimenting and budgeting for marketing and business development and set out some numbers — a different kind than the “numbers game” of cold calling and email blasting — but possibly, in some cases, including these less-than-enjoyable (to most) marketing and business development strategies in your mix.

These activities require some research time, effort, and possibly external consultant support. And the measurable data may require some time — perhaps a year or more — to provide useful information (especially if your focus is on large-scale/low volume opportunities). However, if you set up a metrics system, once you’ve gathered the basics and set up the measuring/tracking system, you’ll be able to make informed decisions.

Here’s an example.

Say your goal is to build schools within your state or province. You have a track record of successful school building for some districts and know your numbers about return on effort and the like. You also know which groups/associations the school district leaders support and belong to, and you know how much it costs to join the relevant association as an associate member. You can also budget your time and ancillary fees.

You also decided to build out your relevant website pages, collateral marketing materials (perhaps white papers or case studies), and set your leads service to “watch” for RFPs from the relevant market.  You also know certain districts where the competition has an entrenched presence.

With all this data, you can set out the likely volume of future work that may be available, your yield, your potential costs, and determine your RFP response/opportunities, and then when it is time, go for the “numbers” with intensity and serious effort.

Now that is a numbers game I would be quite happy to play.

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