When high value sales people deal with poor quality sales leads the costs can be high; this should concern both the C.E.O. and the Sales Director?
The cost of getting the new customers is said to be about 4 times that of keeping existing ones. Exactly where the numbers come from is difficult to ascertain, but even if the figure is only twice as much, this is still of major significance to companies of all sizes.Getting the right customers to start with is and always has been central to building a profitable business.
The need to manage costs is important and no doubt will continue to be so, particularly for those looking for real growth of their customer-base.
Making cost comparisons about different sales methodology is never easy, but seeking better and easier ways of meeting the sales objectives is an imperative and even the most successful companies need to do this regularly. A good starting point when carrying out sales/cost analysis is to keep accurate records and data because this ensures meaningful appraisal and comparison of the current selling methods. Although the research can take time since it requires statistics, which may or may not be readily available, it is nevertheless an exercise that is valuable and more often than not surprising even to experienced marketers.
Remember, campaigns, are not just expected to produce results, they are also normally required to prove R.O.I. Those responsible for presenting the campaign results often find it a difficult and stressful time, since most reviews of this type pick up on sales – or the lack of them – first, then go on to evaluate the other elements. If the objectives were properly set out well in advance of the campaign, then there can be no argument. If however, as is so often the case, the only objective was to acquire new business and ignore or sideline quality considerations then life can get difficult. The following are all elements of profitable growth:
Finding high value customers
Maintaining and growing market share.
Promoting new products
When assessments are made that do not fully reflect the relevance of these things it can distort the overall judgment of a campaign. Because of this input from the various departments and sales channels involved is essential, even if occasionally it isn’t what people want to hear.
From our experience campaign postmortems carried out with sales force involvement, suggest that poor performance results not so much from lack of effort or poor sales skills but from dealing with, poorly selected, unqualified or inappropriate prospective clients. When this happens it should ring alarm bells, since high value sales people, mismatched with poor quality prospects, can produce a costly and debilitating experience. If it occurs it can damage sales force moral and make it more difficult to get buy-in for future campaigns.
Given the marketing innovation and technology available, those most affected may well enquire as to how this can happen and whodunit?