We are frequently asked how lead nurturing will affect key metrics such as lead rate, cost per lead and ROI. The following data offers some insight based on our experience.
Since nurturing activities are focused on “warm” opportunities, the percentage of conversations, which result in “sales-ready” leads is higher when compared to a teleprospecting (cold-calling) program. Additionally since all contacts, which are moved into a nurturing program, have been profiled (including critical contact data), the rate in which prospects are reached is higher. In other words, the number of conversations that agents are able to have, per day, with nurtured prospects is higher than with cold-prospects. Consider the following comparison:
Tele-prospecting – A typical tele-prospecting program may result in an average of 8-10 conversations with decision-makers per agent, per day. Of those conversations, 8-10%, on average, are deemed “sales-ready”. During the course of a tele-prospecting program, the rate in which leads are uncovered is typically a bell-shape curve. The first part of the program is spent cleansing the list and getting to the “right person”, followed by an increased period of leads (finding the low hanging fruit), followed finally by a period in which the leads slow down as diminishing returns are met.
Nurturing – An average nurturing program may result in an average of 10-15 conversations with decision-makers per agent, per day. Of those conversations 10-15%, on average, are deemed “sales-ready.” A lead-nurturing program does not resemble the bell-shape curve as described above. Instead, a nurturing program typically resembles a slow incline – the lead rate increases overtime as prospects are provided relevant information and pushed into the sales funnel.
Therefore, based on the above, when a nurturing strategy is added to your lead generation approach, your overall number of leads increases, which does drive down the cost per lead.
*However*,*What’s* Really Most Important?
Although Cost per Lead metrics may be of interest, the most important measurement should be Return on Investment of the activity. Therefore, anyone considering a nurturing program, should know the following:
Tele-prospecting – Based on feedback from our clients, typically 15-25% of leads generated by a tele-prospecting program are ultimately “won”.
Nurturing – When relationships are started in the beginning of the sales cycle, as with a nurturing program, the closure rates are increased. Based on historical feedback from our clients, the “won” opportunities increase by an average of 10% when examining nurtured leads.
To ensure success, there are three critical components, which need to be considered when implementing a lead nurturing program…
1.) You must be committed to providing relevant content in order to develop and maintain a nurturing marketing matrix. Without relevant content, a nurturing approach will not result in the desired number of leads.
2.) Don’t stop your teleprospecting activities. You need to maintain a continual stream of newly qualified prospects to “feed” into the nurturing program.
3.) Engage your sales team and implement a closed loop process. Nurturing programs are most effective when sales is bought into the program, process and most importantly in aggressively pursuing the “sales-ready” leads.