On the surface of it, why would any business encourage their expensive and hard fought clients to test the competition’s products and services. Why would a business encourage their clients to potentially leave? Why would a business owner put their company under a microscope and be compared to their competition? The simple answer is that the business provides the best products and superior service. They provide quality leads, have reasonable business policies, provide superior service, all at a price that provides a higher ROI to the client.
A business with a long term time horizon should want their clients to see the value they provide first hand, so their clients continue to do business with them and potentially stay forever. If as a lead company you don’t do this, your client will always have a notion in their head that they might be better off using another service or company to get a better product at a lower price and with a higher level of service and performance. They will inevitably follow this “grass is greener” whimsy and use any excuse to leave and go someplace else in order to test that notion.
Anyone who has gone to a formal business school or the school of hard knocks will tell you to lock in your clients, create multiple barriers to exit and create financial disincentives for your clients to leave your company. The more that are there, the less likely they will be to discontinue using your products. Many lead companies do this, they will get the client in the door with a hard to refuse promotion and then have a large setup fee, require a term contract, have a large minimum purchase requirement and even a termination fee to get the best pricing and more. Unfortunately, in many cases, lead companies push the boundaries of business common sense and will prey on small unsophisticated companies desperate to improve their business. The lead companies will require these commitments from first time lead buyers, who in many cases are bound to fail because they don’t have the structure in place to be successful.
Rather than pushing the boundaries into unprofitable realms, lead companies, regardless of the vertical or industry,should encourage their clients to try out the competition. When they do, they should also recommend that they use a CRM and/or warm transfer service that will ensure that the leads are worked in an objective manner with a major side benefit of making the client more efficient. The leads need to be called immediately upon receipt, they should be worked with similar scripts and be called or emailed a similar number of times. A 3rd party will be best able to do this and provide the business with objective results which will enable it to determine an ROI for each of the leads vendors. A lead company that stands behind the quality and value they provide should not be afraid of such an evaluation, they should encourage it and encourage the business owner to do it in a way that will be objective through the use of a third party.
Lead education goes hand-in-hand with encouraging lead buyers to try the competition. Educating lead buyers on key industry metrics and benchmarks will enable them to make smart decisions and be better clients. Some of the key metrics buyers should track include:
1. Contact rate or the percentage of leads they are able to reach via email, phone or another method. Initial contact rates are in the range of 15% to 35% but with nurturing over time can grow to 35% to 60%.
2. Quote or Proposal rate or the percentage of leads that are provided a quote/proposal
3. Close Rate or the percentage of leads that actually convert to a sale. This can range from 10% to 50% and is highly dependent on the skills of the sales person engaged with the customer.
4. Bad Lead Rate or percentage of leads that have a bad number, say they never wanted a quote or proposal and say they are on the DNC list. Historically this ranges from 15% to 40% bad lead experience with an average rate of 25% depending on the company providing the leads.
Lead companies should also encourage their clients to report back their results. These reports, especially when they use an objective warm transfer service and CRM, will enable it to benchmark themselves against their competition to enable it to improve the quality of the products they provide. Without these comparative assessments it’s impossible to know how they stack up against their competition beyond simple comparison of promotional offers. This feedback, if used properly, can help lead companies cement their client relationships to even higher levels.
Lead companies focused on quality should not be afraid of their competition. They should be easy to do business with, provide flexible business terms, provide a strong tangible value and recommend that their clients work with multiple lead providers. All to provide the most business to the one with the highest ROI: yours!.