Warm leads v Hot Meetings
Mark Stephens
AI & Hyper Automation | Business Technologist | DIY & DWY AI Marketing Technology | Growth Strategy | Sales & Marketing
Most Business Owners will freely admit the one area of business they continually struggle with, is business development, and booking quality appointments with their ideal prospects (and quality is the key word here)…
But how do we quantify a quality lead?
This might sound obvious to many, but several times every week I still have conversations with our own client prospects that seem struggle to understand the difference between a marketing generated warm lead and a high quality, inbound qualified meeting.
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So I will start with some basics, and then get into the detail of what constitutes a high quality appointment, that will dramatically increase the probability of converting into a deal.
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Everything is still a sales ‘opportunity’ until a contract is signed, and they are all prospects, but a lead typically describes an opportunity that is further back in the sales cycle, whereas an appointment, meeting or demo has already been through at least some of the initial phases of the sales cycle, and is therefore closer to becoming a purchase.
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A cold lead might fit your ideal client profile, but that doesn’t mean that they are ready to buy from you, especially if they don’t know who you are and would require an outbound communication, in order to start the evaluation and nurturing process.
And equally, an inbound request for a meeting, on the back of a recommendation, to see how you can help solve a problem for a prospect, even when its technically outside of your ideal client profile, could represent a much better chance of securing a sale.
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Its very rare that you can circumvent the key stages in the buying process, unless you are lucky enough to stumble across a prospect that is desperate and na?ve, but you can’t build a sales and growth strategy around good fortune and luck.
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The relationship between sales and marketing is best understood when you look at the typical sales funnel diagram below.
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Sales can get involved at any stage in the cycle, but ask anyone doing business development whether they would prefer to be do cold outreach to a brand new untouched prospect, or follow up on an inbound inquiry, and you will always get the same answer.
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So why is understanding this important to the business owner, sales people or the buyer of lead generation services?
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Well, It all comes down to probability.
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The chances of closing a deal with a prospect that has moved down through the funnel to the intent stage is far more likely to buy your products and services, than a cold or warm prospect.
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You can even increase the probability of conversions further buy aligning your target prospect to other influencing factors.
For example, was the initial inquiry inbound, did the prospect do their own independent discovery and evaluation before contacting you, did they seek and find reputational proof already. Maybe they came to you as a recommendation from an existing or previous client?
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Increasing probability also increases predictability when it comes to forecasting future revenues.
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A cold prospect that is unaware of you and your services has a very low and unpredictable chance of conversion, but an inbound prospect, that has already been through their own selection or screening process and is ready to buy, is likely to have a 25-50% chance of converting, depending on your closing abilities and ratio.
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Compare that prospect to a lead, that has engaged with a marketing asset, or that you tracked into your website, which will have a 5-10 % chance of becoming a paid customer (at best), then we can truly start to appreciate the value of a genuinely hot, ready to buy, qualified appointment.
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Let’s put this into simple commercial terms: If a meeting with a prospect, that is at the intent stage, costs you ￡250, and has a 25% chance of converting, your cost of acquisition of a new customer is ￡1000.
And if you know your average annual value of a customer, you can easily calculate your first year ROI and consider whether buying appointments at ￡250 makes commercial sense.
If you know how long you normally keep a customer, then you can also calculate your Lifetime value and total ROI.
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When you look at client acquisition in this way, it makes a compelling business case for seeking out the most reliable form of generating qualified appointments, because every business owner loves the idea of predictable growth and revenue.
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Subsequently, Lead generation and appointment setting companies that are able to attract prospects, from within your ideal customer profile, and can nurture those prospects along the sales cycle to the point of intent to buy, are far more valuable than a lead generation service where you pick up the prospects at the point of ‘discovery’.
You will then need to factor in the salary/time cost of the person or people converting those leads into appointments, and that increases the sales and marketing expenditure required and subsequently the Cost of client Acquisition.
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When we start a conversation with a prospective customer at BMD, it nearly always begins with the commercials, and that means ROI, because buying a quality marketing service should be an investment, not a gamble.
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Feel free to try our ROI Calculator tool . Its free and there are no sign ups required.
If your first year ROI comes back at x6 or better and you would like to join me for a discovery call, then feel free to use the Calendly link below to find a time that is convenient to you.
Just for clarity, these are guaranteed appointments, or your money back.
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And if we don’t get to speak, thank you for reading this article, I hope it helps change your perspective in some way, and good luck with your business growth.
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Mark Stephens
Founding Director
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