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BizVidya Guide: How Effective is your Lead Generation Process?

Often I see entrepreneurs or small business owners moaning about lack of “enough business”. Some are more crude – Can you get me a customer? Or, can you email our brochure to all your contacts? I try to be as polite as possible on such requests, but many are offended as to why I am not helping them! The thing is that if I am not convinced about their work, I have no choice but to gently decline. Interestingly, when I quiz them back on their sales or lead generation plan or process, their answers run on these lines:

  • Attending random events (some of which have same visitors coming repeatedly or the percentage of target customers is very low)
  • Calling up random people found on Twitter, Facebook, Linkedin or elsewhere on the internet
  • Participated in an exhibition many months ago

Dig further and you will find that there is no specific process or periodic targets (although, boldly they show revenue targets on business plans and pitches to investors).

When I suggest the word ‘process’, it lands on them as something that is needed by large organizations. Most startups and small businesses do not use a Customer Relationship Management (CRM) tool – perhaps they do not need a CRM tool yet. However, that does not mean that they are excused from having an effective lead generation process.

If they are still around, I invite them to convert their revenue targets into a daily plan. Here is one way to do some basic calculations that are required to set-up a simple lead generation process that can be easily tracked on a spreadsheet:

[A] State your revenue target. For illustration, let us take a figure of INR 5 crores for next twelve months.

[B] Estimate the average size of an order. Say, INR 25,000.

[C] Thus, you need 200 orders to achieve your revenue targets. Taking a year as 50 weeks, this translates to 4 orders per week.

[D] In your experience, what percentage of your customer meetings or interactions lead to a confirmed order? Begin with an estimate and change as per experience. Say, 25 percent. So, for our example, you need to arrange 16 sales meetings / interactions / demos per week.

[E] What percentage of your Qualified Leads (QL) translate into (as a result of initial interaction) prospects agreeing to explore specific purchasing via demos or product-trials. A Qualified Lead is an entity that is a potential customer on paper (in terms of pre-determined parameters like business size, segment, location, etc) for your products or services. Say, 50 percent. So, you need to generate at least 32 QLs per week.

[F] Now, what percentage of your Raw Leads (RL) get converted to Qualified Leads? A Raw Lead is any valid contact details of person or organization which may or may not be interested in your products or services. Say, 10 percent.  So, you need to have at least 320 fresh RLs per week or 64 RL per day (taking five working days). If you are using a tele-caller, then this is the minimum (s)he should be calling everyday. If you are using your web pages as a lead source, then this is the minimum number of users that need to submit their contact details on your landing page.

Many have liked this approach and created a spreadsheet to track this. However, soon I found out that inertia has set in and no sustained action was taken to make the process work. Some eager entrepreneurs took this discussion to next level in terms of choosing market segments, identifying ideal customers and so on. The enlightened business owners took our help to convert this into a small but robust lead generation process on lines of a state-of-the-art Balanced Scorecard framework with KPIs (Key Performance Indicators) integrated with KRAs (Key Result Areas) of promoters and staff responsible for Sales Targets.

Since I am quite lazy to keep elaborating this repeatedly, I am sharing this here publicly with all, so that, next time, when an entrepreneur rues “no business”, I simply have to share the URL of this article!

You may request a free* initial Coaching or Consultation on your Lead Generation Process by sending an email to coach@bizvidya.com

*Conditions Apply

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BizVidya Guide: Create a Business Dashboard

A Business Dashboard is a single point, One-Integrated-View of the whole Business seen in Execution.

There are many Dashboard Solutions out there in the technology market and choosing among them is another discussion altogether.

At a fundamental level, what is more interesting is that a Business Dashboard can be used as a Tool to derive the Most Critical Measures that you MUST track in real-time to steer your business smoothly without any hiccups on a day-to-day basis.

Designing your Business Dashboard even on a piece of paper provokes a business owner to ask him/herself:

What do I need to know about my business, NOW, at this very moment?

For example:

  • Are all Pending Sales Enquiries being responded to proactively? Which enquiries are STUCK?
  • Have all Pending Sales Orders been scheduled to deliver across the entire supply chain (suppliers, transporters, warehouses, etc)? Where are the DELAYS?
  • Is my Accounts Departments taking care of all Legal Compliance Issues well in time? Is there a likelihood of penalty anywhere (especially, if it has already happened in the past)?
  • How effective is my Purchase Department? Are we taking all possible discounts? How much did we save in our purchases over the last month? Are we paying higher than the market rate? Are there new suppliers in the market who are offering the required quality at better rates?
  • Is my Production on Schedule? Are Raw Materials adequately stocked? Is regular Maintenance being for done for all machines (especially, if there is history of breakdowns)?
  • What is the percentage of Unplanned Absence (including unexpected ‘falling sick’) by staff? In which departments? How has such absence hampered work? During such absence, has the backup staff reported progress on all critical parameters?
  • Which customers are consistently paying late? Why? Is the follow-up adequate? Is the follow-up log being sent to you without your asking for it?

Each business owner will have his/her Pain & Gain Areas! Where do you want to focus now? How can Technology help you in this? Can a technology solution help you if you have not done your homework?

It is a great idea to start with a Pencil and Paper! List what all you would like to see on single A4-size sheet. You may have to fill many sheets before you get your “One-Integrated-View of the whole Business”.

Then, perhaps you may move on to spreadsheets before finally experimenting with state-of-the-art tools.

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