More leads = more sales ? Not necessarily.

When you’re looking to grow your revenues, one of the first things people worry about is how they get more leads. Founders assume if they generate more leads, they’ll make more sales, but this isn’t always the case.?

Why not? Read on.

Better collection of funds is underrated

I’m always amazed by some of the tech startups we’ve analysed when they’ve spoken about their lead problem and the unpredictability of revenue.?

But what about the money that’s owed to you right now??

When you look at the amounts outstanding in account receivables and review the average time for an invoice to be paid you reveal some eye opening things.?

For example, do you know how long on average it takes for your customer to pay? What about per customer?

By having a look at the data you’ll reveal some big client culprits and some inefficiencies in your invoicing process that can help you gain some much needed cash back into your business quickly.

Deliver an extraordinary experience?

When you’re starting out and having signed your first mid market or enterprise customers as a Seed company, you’ll need to deliver and hopefully over-deliver on the expectations of your customers.

You might have heard the phrase, “under-promise and over-deliver.” What does that mean in practice?

It means you don’t make promises that you can’t keep or over-deliver on, and you don’t sell them the dream and then deliver them a coupon in the post.

You want to optimise for value over volume in these initial stages. We want our customers to be our advocates and to recommend us, not give off the vibe of, “onto the next one”.

As a constant reminder, think of it like this…your first 5 will get your next 50 customers.?

Conversion trumps leads

Conversion will always be a better return on investment than lead acquisition, simply because you’re closer to the revenue.

We look at conversions with our clients before we look at lead generation. If you haven’t got a strong track record in effectively converting leads, investing in lead generation will be a complete waste of money.?

I know you’re going to ask me what a good conversion rate looks like, and this entirely depends on what you’re selling and to who, but you want to be pushing for at least 10% lead to sale rate.

You need an offer that works?

We go on about the importance of your proposition a lot, but it really does underpin how successful your sales and marketing function will be. In fact, it’s the first thing we review with our clients in our 3P approach: Proposition >> People >> Process.?

We work with B2B tech startup founders with Seed or Series A funding, and what is appropriate as a go to market strategy varies business to business. You’ll need to understand your competitors and alternatives, the benefits of your solution and what the value is to your clients.?

Where have your leads come from?

Once you’re clear on your proposition and you’ve got an offer that works, it’s at that point that you can start looking at increasing your acquisition activities and spend. But how do you do this??

Lead generation and marketing agencies generally have a bias towards channel, because that’s where their expertise lies. They’ll be telling you that LinkedIn and social media is the best way forward and unless you know where your existing leads have come from, how are you going to argue with them??

Your starting point needs to be in understanding your own audience, where your clients so far have come from, and why they came to you. Once you know what works, you can outsource as necessary what you know will have an impact for your particular business.?

And often increasing lead acquisition is about combining different lead generation strategies and channels to create a compound growth effect rather than a solitary channel. Otherwise you’re just increasing your chance of failure.?

Find out more about Sales for Startups.