By William F. Kendy, Selling Power magazine
If you want to grow, prosper and set sales records, it's up to you and your sales
team to find new customers. You need to reach out and touch more potential customers
in new markets and bring them into the fold. However, what is the best way to generate
new leads? Pick one of the following: a) talk to truck drivers, b) get referrals,
c) go through old files, d) attend trade shows, e) use direct mail. And the answer?
Well, it's a toss-up. Using any one of these methods can produce potentially lucrative
sales leads - not tire kickers, but real, live, legitimate prospects.
Circle of Referrals
For qualified sales leads, it's hard to beat referrals. Knowing someone who knows
someone automatically gets your foot at least part of the way in the door. And the
best place to get referrals is in your own marketplace. Jennifer Reimer is the inside
sales manager, eastern division, for Essilor Laboratories, a major supplier of prescription
safety eyeglasses. She advises her sales reps to spend time researching their respective
markets to find companies that may have a need for their product. "If a prospect
has big machines and/or conveyer belts, that means there's the potential for flying
objects," she notes. "If that's the case, there's a good possibility that safety
glasses are needed. We use manufacturers' guides to get a feel for what kind of
business a company does, and if it looks like a fit for prescription safety glasses,
we take it a step further and research it on the Internet. If it still looks viable,
we make phone calls to find out who the appropriate person is to talk to and arrange
an appointment."
Reimer has a system that creates a win-win situation for all concerned. "We get
a lot of referrals from our eye care provider network, which is local doctors who
do the eye exams, fitting and measuring for the glasses," she explains. "Since not
every OD or eye care provider wants to do safety glasses, we've developed a network
of recommended ODs or dispensers who are interested in doing safety glasses. We
give a list of them to our customers.
"We have ODs calling us and saying, 'Here's a local company that needs prescription
safety glasses but doesn't know where to go to get them.' By our referring business
to them, they in turn refer business back to us, that we then can refer back to
them. It's like a big referral circle," says Reimer.
No business is an island, so Reimer makes sure her referral circle is as encompassing
as possible. "We get referrals from companies we do business with, their 'sister'
companies in other areas and companies that recently purchased one of our customers,"
she notes. "We might do safety glasses for a small shop that just got purchased
by a larger organization and they refer us. In each case they say, 'These people
did a great job for us. Give them a shot.'
"Another source of referrals comes from networking with safety equipment distributors.
They sell hard hats, boots, earplugs, and they sometimes get asked if they provide
prescription safety glasses. If they don't, they refer the customer to us."
"Referrals are our number one source for leads, and a lot of it has to do with building
rapport," says Candace Munson, account manager for Killington Wood Products, a division
of Carris-Reels in Rutland, VT. "They come from customers and even competitors that
we have a good relationship with. Even though we do a variety of pallets, there
are certain specialty items we can do better than anyone else, and we have competitors
actually on our side."
Salespeople shouldn't just look at getting referrals from existing customers. Instead,
they should make asking for them an integral part of every cold call, says sales
trainer and consultant Bill Truax, president of Trufield Enterprises Inc. in Chagrin
Falls, OH. "Salespeople should continuously seek referrals from existing customers,
friends and even prospects they're talking to for the first time," he advises. "Don't
fall into the trap of thinking that you can only ask for referrals from people that
you know or are already doing business with."
At the same time, it's imperative for salespeople to know how to ask for referrals.
"On a first-time call, if I asked you to think, off the top of your head, of anybody
else who could use our widgets, you'd probably say no," Truax points out. "But if
I asked you to give me the names of three people you know who are in positions similar
to yours, who could also use my product and whom I can call on, you could probably
come up with those three names."
On with the Show
Never overlook the value of trade shows when looking for qualified leads. "We do
a lot of trade shows that are targeted toward safety directors, human resource managers,
nurses - anybody who is involved with the safety of employees," says Reimer. "We
notify current customers and prospects we've been trying to sell that we're going
to be there and invite them to stop by our booth."
Trade shows present an excellent opportunity for networking. "Our parent company,
Carris Reels, attends trade shows, and we do get some feedback from them," says
Killington Wood's Munson. "It's a way of connecting with the customer you already
have, and hopefully your good name and good service will filter through that trade
show to the people who don't know who you are.
"In our industry, we have a number of customers that feed from each other and trade
shows are a good way to network. For example, maybe three booths down from your
booth is a chemical company that will feed a plastic company that supplies their
plastic materials to a wire and cable company that then buys reels from Carris Reels
and pallets from us."
Truax also believes trade or consumer shows can be effective lead generators. "Trade
shows actually give salespeople the opportunity to make the first sales call right
there at the booth. And the great thing is that the prospects come up to them,"
says Truax. "If done correctly, trade shows are a wonderful selling tool."
However, trade shows require special skills that many salespeople need to acquire
before setting foot on the show floor. "Salespeople need to be trained ahead of
time how to ask the questions that are relevant at a show," Truax notes. "The companies
that do it well have salespeople with gentle personalities, not coming on hard,
asking a few qualifying questions and finding out who the right person to talk to
is and then following up in a timely fashion."
It's in the Mail
"If used correctly, direct mail can be your private sales force in the field to
prospect for new business," says Lois Geller, president of Geller & Mason, a direct
mail/marketing agency. "But before you can do that you need to work the numbers
and calculate an 'allowable.'"
According to Geller, an "allowable" is how much money you can spend to get one order
and break even, or get one order and make a predetermined profit. "Determine what
the gross revenue per order is," she explains, "and subtract the cost for that order,
including the cost of the mailing, the cost of sending out a salesperson and any
of the additional costs of closing the sale. That gives you your breakeven or 'allowable.'"
When considering using direct mail as a lead generator, Geller also takes into consideration
the lifetime value of a customer. "Ask yourself how much potential revenue that
lead could produce over the course of time," she says. "For example, if you're selling
cars, don't just calculate the allowable based on the sale of one fully loaded new
car. Take into consideration whether that customer is going to trade it in every
three years, based on customer sales history.
"Once you get all the numbers down, it makes it more scientific and gives you a
picture of what type of response you need to be successful."
Direct mail is not a hit-or-miss operation. "Once you have the numbers crunched
and know what you can afford to spend on acquiring a lead, make sure your mailing
is targeted, builds rapport quickly and contains a compelling offer to generate
a quick response - what we call a 'quick call to action,'" says Geller.
How do you get prospects to open your letter? "Create a 'willing suspension of disbelief,'"
Geller explains. "Even though prospects may know it's a form letter, they still
want to believe that it came from a real person. Sign your name in blue, put a Post-it
note on it, mail it out first class or write your name over the company name on
the outer envelope."
Dennis Poulos, an agent for New York Life in Flint, MI, is a true believer in utilizing
direct mail to get qualified leads. He sends out more than 100,000 pieces of mail
annually, promoting the 16 retirement and estate-planning workshops he conducts
each year through local community education departments.
"On an average, we get approximately 25 people attending each of our workshops.
And we have a sign-up ratio for follow-up visits at our office between 70 and 80
percent," says Poulos. "We'll eventually do business with about 25 percent of them.
"Because of the workshop format, our initial contact with prospects is nonthreatening,
and we don't get into any specific products at all. They come to a workshop, then
a follow-up visit six to 12 months down the road, and then we end up working with
them on their retirement and estate plans."
Once prospects express a need, Poulos partners with attorneys, CPAs and, if a business
is involved, business appraisers. That means additional referrals for Poulos. "We
want customers to come to our office, and then we'll find the appropriate professional
for them," says Poulos. "We do a tremendous amount of referral work for other professionals
and we get a decent amount of referrals back from them. It just naturally happens.
And because of it, we've done some very nice cases over the years.
"We've tried advertising in other media but found that nothing works nearly as well
as direct mail. You have to send out large quantities to an identifiable target
audience over a long period of time and have the right mix and blend in terms of
what you offer. But it does work."
Look Outside the Box
Truax stresses that salespeople should be constantly aware of opportunities to get
new leads. "Just use your head as you're driving along. Be aware and talk to people,"
he advises. "My dad used to call it 'smokestack prospecting.' If you see a truck
stopped at an intersection with the name of a company on it that you're not aware
of, make a note of it and do some research. Talk, ask questions and listen to people.
Leads are all around you, but you have to have the mind-set to recognize, acknowledge
and take advantage of them."
Killington Woods' Munson receives a significant number of leads from her company's
truck drivers. "Our truck drivers are a huge source of information and leads for
us," she says. "A lot of times our drivers are dropping off pallets in industrial
parks and jot down the names of companies.
"They talk to customer receiving and shipping people who fill them in on who is
a good prospect in the area for us. Sometimes they even tell our drivers to use
their names as referrals. We follow up with a phone call, send a package of information
and set up an appointment."
Many salespeople don't realize that an excellent source of leads is right beneath
their fingertips: old company files. "Never throw away your old files. Archive them,"
Munson advises. "I have found a number of people from companies that we haven't
done business with for years because we didn't have the right equipment at that
time and something has since changed. It's time to go back and talk to them."
"Keep an open mind," urges Essilor Laboratories' Reimer. "The place where you least
expect a lead is where you're going to get it. For instance, we got a lead on a
company that made pet food. I never in my wildest dreams thought that they would
need safety glasses. But when you think of how pet food is made, with machines and
conveyer belts, it makes sense."