Two channel B2B lead generation model

Thanks to the folks over at sharpecopy.com for providing some statistics (average response rates by lead generation stage). As a result, we are able to fill out a nice little model.

The information comes from Alan Sharpe’s newsletter (volume 3, Issue 27).

In summary, he said that the B2B industry average for qualified leads is 25% of total leads generated by a given campaign. This means that 25% of the leads you generate are qualified, on average.

His next data point is that 30% of your qualified leads result in a sales appointment, on average.

His final data point is that 25% of the leads that take appointments, go on to close, on average.

When you combine this with an initial response rate of 3.5% (mail and or cold calling) you can go on to build a very helpful model, based on the following:

step 0: mail or call your list

step 1: 3.5% will respond to your offer

step 2: 25% of the responders will be qualified

step 3: 30% of the qualified leads will go on to take an appointment

step 4: 25% of those taking an appointment will sign on the dotted line

Using this information I was able to determine that I need to make 1,530 calls or drop 1,530 pieces of mail in order to generate 1 sale.

The cost of dropping 1,530 pieces of mail is about $765 and the cost of calling 1,530 names is about $2,295, or so. This is the cost of generating the initial response and does not include the cost of whittling the 1,530 down to 1.

Email is not included because SPAM has destroyed it as a viable channel. Response rates are basically zero for cold email.

I recommend Alan’s website and newsletter – lots of good information presented in an uncluttered way.

This kind of modelling is okay for giving you a rough estimate and or budget. The problem is that life is not so neat. In enterprise B2B sales, the truth of the matter is you will never know for sure how and or where a prospect or customer became aware of you.

Was it at a trade show last year? Was it the post card webinar invitation from three months ago? Was it an article someone read and passed on to co-workers from a year and a half ago? No one knows for sure, even if you ask them.

Still, the information is helpful from a planning standpoint.

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