Fishing for leads

I was recently asked a great question at a business networking event: When planning your marketing efforts, should you cast a wide net to find lots of leads, or a narrow net to find highly qualified leads?

Oddly enough, I was (and the operative word is ‘was’) a huge proponent of “spray and pray” marketing. This strategy called for casting as wide a net as possible to catch many fish and then sift thru the fish throwing away most of the trash until you find the “good” lead. The strategy has played out well for the past 20 years – though the method by which we caught fish has certainly evolved.

At the beginning of my career, we used cold calling for almost all marketing initiatives. Sprinkled in were direct mail pieces (anyone remember those) that helped pave the way for cold callers to follow up with the targeted lists. Tradeshows and specifically niche tradeshows help narrow the audience somewhat. Emailing marketing and PPC campaigns again called for broad coverage of the marketing message to drive respondents to web landing pages and then sorted by quality of lead passing only the warm leads over the sales team.

The issue of course is that in 2008 no one returns calls from people they don’t know. No one reads direct mail. Customers hardly attend tradeshows. Spam filters and junk mail boxes store all the email marketing campaigns. Even PPC campaigns have gotten out of control. VOIP has a PPC cost on Google of $4.71. The cost then based on a 3% conversion of Google would be $157 for a qualified lead. With a 1% conversion (more likely) the cost is $471. It is easy to see how $20 billion is being spent on online marketing.

Let’s take a lesson from an unlikely teacher – cyber criminals. Botnets were originally cast among millions of users. The results were excellent at first causing electronic catastrophes such as Michelangelo and the I Love You virus. But no one other than the virus companies really benefited from these wide botnets. In recent years however, the cyber criminals have turned their attention to targeted attacks. Rather than a wide net they are sending hundreds of emails to a specific target in the hopes of a few emails getting thru and converting to a botnet. These localized botnets are extremely valuable and the spammers are generating huge revenues in these attacks from identity theft, corporate espionage and spam networks.

Using this as an example the ideal way to execute your marketing program would be to (a) get extremely detailed and specific exactly who and what is your target (b) what your ideal success would look like in terms of a deal (c) what you are willing to spend to generate that lead and (d) how many of those qualified leads are you looking to generate. The cyber criminals are successful and will continue to be successful not only because they are diligent in targeting their prey but moreover they are constantly trying out new ways to drive the success rates of their campaigns.

Recruiters tend to use a similar targeting approach when searching for a specific candidate. They get extremely detailed on the characteristics of the ideal candidate, the background, experience, accomplishments and of course compensation. They then target those individuals in their network that meet those criteria. Professional networks have now added a layer to recruiters providing them a more automated way to get the word out about the job opportunity as they seek not only the candidate but anyone who might know a potential candidate. I certainly wouldn’t appreciate a recruiter who asked me if I would be interested in a position that is clear not for me.

Marketers should take the same thoroughness in mapping out who their target prospect should be and utilize the tools available to seek out those individuals.

The tools that I would recommend are;

1. PPC optimization tools such as clickable (www.clickable.com) to get the most out of your PPC campaigns.
2. Professional network tools such as LinkedIn to help search for the "right" person in your network.
3. Pay per post blogging sites like payperpost.com to drive specific "buzz" to your targeted audience.
4. Professional niche networks such as Biznik and Fastpitch that make it easy to post promotions on your company to targeted folks
5. Business networking marketplace such as Salesconx (www.salesconx.com) - sorry for the self promotion.

How can social networking space be leveraged to create opportunities for Sales?

I was just asked on LinkedIn, "How can social networking space be leveraged to create opportunities for Sales?"

It is important to bifurcate (yes Maggie I used the word bifurcate) social networking between both those words “social” and “networking”. The social aspect of social networking is the ‘fun’ element. It is the keeping in touch with past colleagues, college friends and associates. It’s helping out one of your past coworkers who is looking for job and needing some added help in making introductions. When my high school was having a reunion (not saying how many years) we used social networking to track and find almost everyone in the class.

What we are seeing in social networks is that ones’ “network” is getting too large so folks are creating groups of like-minded users. These folks interact in smaller environments very much like the early forums of the Internet. Let’s be real for a second; you might have a 500+ rolodex but you aren’t inviting all of them to you house for a party – your rolodex is filled with folks from your past and present; people you have worked with, go to school with and regularly associate.

The other element is that of “networking” – in this case meaning to get introduced to people who could benefit ones career or business. We are leveraging our relationship with one person in the hopes of them introducing us to one of their contacts who could at some time in the future help us in our career or business. From a selling perspective the objective is quite straightforward when put into the context of social networking – can I leverage my contacts to drive new business by having them introduce me to potential customers?

Using traditional social networking tools, I could ask one of my contacts (say someone I worked with at a previous company) to introduce me to someone in their network who might be interested in my service. In the old days we called this ‘working your rolodex’ – calling up folks you knew and asking them to refer a new client to you. Social networking has made this process much easier although the end will be the same. Shaking the trees will often cause fruit to fall but shaking them harder will have little to know effect.

One of the lessons of social networking is our new found comfort in making an introduction between 2 parties. There is also a growing trend of leveraging ones human capital. There are expert networks that will compensate you for your knowledge and expertise. There are peer-to-peer lending sites that will compensate you a higher interest rate for lending money to someone. The same model should hold true for selling professionals. Sales folks have excellent human capital in the relationships they have forged – not only with colleagues and past co-workers but with customers and decision makers. Ask a sales professional how many of their customers are in the social network and you will be surprised just how few. The reason is simple – those are customers not friends. Those relationships have value not only to the selling professional but also to businesses, marketers and other sales people who would want to get introduced to that individual. So trolling thru your networks won’t reveal these golden nuggets. One needs to create an environment that will compensate selling professionals for introducing their customers.

Driving new business – the small business challenge

Growing a business has its obvious challenges. The owner(s), usually with limited allotment of initial resources, must battle the clock in creating a meaningful strategy to steal market share from larger competitors. A few pivotal client relationships can make or break the entire business. In many ways, these challenges have not changed over time--but in 2008, there are also new ways to compete.

To better understand the issues facing small businesses today we surveyed close to 500 small businesses nationwide from a wide variety of industries, with the objective of understanding the following about owners of small businesses:[1]

• How they value new client relationships

• How they approach lead generation

• How they utilize the Internet’s networking features

New client relationships: the lifeblood of small business

According to our survey, small businesses place far more emphasis on new client relationships as 39% of our respondents count on new business for at least half of their annual revenues. Despite the obvious risks involved in depending too much on a small handful of clients, more than one-third (34%) of businesses surveyed are adding no more than three new clients per year. To add these new customers/clients 61% of respondents answered that client referrals and other forms of word-of-mouth marketing account for at least 50% of new business.

An immediate conclusion one could draw from the survey results is that small business must continue to find new sources of revenue to sustain and thrive. Most of the businesses in our survey are unable to rest on the revenues generated from their existing clients.

Online lead generation is being deployed as a vehicle for attracting new customers and clients without dramatically growing ones sales force. The promise of an even playing field across all vendors who place their advertisements on PPC networks such as Google and Yahoo is incredibly enticing. It was quite surprising to find that only 9% of the respondents where using online lead generation. It was more unexpected to see only 6% respondents attributed online lead generation to garnering 50% of their new client revenue. With 67% of respondents expressing concern about the ROI of launching new marketing campaigns, it is not surprising that the number of small businesses who utilize online lead generation is so low. Of all marketing tools utilized by our respondents, only word-of-mouth delivered greater impact than its utilization.[2]

Let’s just get more words-of-mouth

It would seem logical that the ideal way for a small business to grow would be to find more folks that could drive more business. This premise has ignited a new professional use of online networking, such as Facebook, Myspace, and LinkedIn. Using online networking businesses could extend beyond the rolodexes, gaining better access not just to their existing contacts but to their contacts’ contacts.

Corporate and private recruiters are turning to online networks to help them gain access to the people who know people who would be ideal candidates for open positions. Money managers are tracking business acquisitions in search of prospects that need private wealth management or insurance policies. Growing your network takes time and dedication. Keep in mind that the goal is to reach beyond ones immediate network. Once extended, the professional network becomes a viable medium for finding new clients. And while online networking is a great tool if you are looking to acquire only a few new clients, what if you need to find 15 new clients, or 20 new clients or 50 new clients per year.[3] How can you add enough mouths (in the word-of-mouth mantra) to drive the business that you need to sustain your growth? With only 17% of our respondents having the patience to wait for results from initiating new marketing initiatives it is no surprise that only 11% of those surveyed belong to an online network.[4]

Social media however, has reminded us that an introduction from a 3^rd party is the ideal way to meet prospects. Qualified introductions by 3^rd parties have played a role in the lives of numerous professionals belonging to a variety of industries; from real estate agents, brokers, recruiters and many others. The role of these 3^rd parties is to serve as a conduit between 2 parties with common business needs and wants.

A new kind of online network

What a small business needs is a quick, easy and effective method for expanding and generating new prospects. Salesconx, an online marketplace for business referrals, provides a forum for small businesses, marketers and sales professionals to exchange professional referrals with fees attached to each relationship. All a small business needs to do is post its business referral requirements and establish a fee that it is willing to pay for an introduction. The request will be distributed (pushed and pulled) to the 1,000+ members of Salesconx who have access to the customers that the business is looking to meet. Those interested will respond and the business selects only those they are comfortable working with. A business could even submit a post that pays only on success. Salesconx minimizes the risk and upfront costs associated with traditional marketing campaigns delivering the results that make businesses grow.

Note: anyone interested in obtaining the full survey results should email me.

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[1] 82% of participating companies reported less than $500,000 in annual sales.

[2] 22% of the respondents use word-of-mouth initiatives to drive new business and 32% of the respondents say that word-of-mouth accounts for more than 50% of their new business.

[3] 30% of the respondents were adding at least 20 new clients per year with 11% adding over 100 per year.

[4] As of December 26, 2007 Facebook has approximately 50,000,000 users and LinkedIn has approximately 14,000,000 thus accounting for only 11% of the participants.