In many companies, the marketing and sales teams work in tandem, almost like they’re running a relay race. Marketing generates leads, by using a variety of methods, until the moment they consider it as qualified. They then pass the lead to the sales department, just as the relay runner passes the torch to the next runner in line.
Most salespeople are eager to get on their hands on as many leads as possible, so buying leads has become a strategy: you get an enormous number of names in a short time. But the truth is: not every lead in the list is someone ready to buy or is even ready to hear a sales pitch.
But what is a “sales-ready” lead?
This is a tricky question. To answer it, we get back to the relay race analogy: in the race, the runners know the exact point when one stops and the next runner picks up; but in the sales-marketing dichotomy it’s not always that clear. There’s a fair amount of grey area at this point and recognizing when a lead is “sales-ready” is crucial to maintaining the balance between your sales and marketing teams.
Sales will not want to waste their time on leads which they don’t feel have been sufficiently qualified. And marketing doesn’t want to hold on to those leads for too long since their task is to generate more leads.
“Sales-ready” means only that the person is ready for calls or emails from a salesperson, and there’s no hard and fast rule as to when that threshold has been reached.
Why you shouldn’t buy leads?
Buying leads brings the illusion you will solve your problem, with the sales team busy reaching out all those contacts and selling new deals. But…
#1 They are not qualified: most of the times companies will sell just a list of names, not even checked or qualified.
#2 They are “used” leads: even if companies claim to offer target leads, how will you be sure that those leads are not being used by your competitor? Imagine how frustrating it can be to reach out people who are already in contact with your competitors.
#3 It is a cold calling: instead of saving time by reaching out warm or hot leads and nurturing them, the sales team will spend time cold calling and losing focus.
#4 Buying leads ends up being expensive: for the reasons above, buying leads are more expensive than generating leads on your own, through business referrals.
So how about referral leads?
While not every referral lead is always ready to buy, a referral is already way ahead of leads generated by almost every other method.
The fact that a person got a referral from someone they trust tells us they have an interest or a need in buying what you’re selling. McKinsey data shows a word-of-mouth recommendation is the most important factor behind 20%-50% of all purchasing decisions.
And, as almost anyone in sales knows, customers trust referrals from their friends and family, which puts you far ahead of the hordes of competitors who are also vying for their business. Customers referred to your business by someone happy with your services are more likely to close a sale than random, non-referred or cold-called leads.
The referral builds a level of confidence in your business since consumers are more likely to buy from a company they have reason to trust. According to a Heinz Marketing Survey, 87% of frontline sales reps and 78% of marketers agree that referrals are the best leads your business can get! Which means it’s good for marketing and sales.
Don’t lose more time with worthless leads and start to invest in building a referral program to your company. If you want to learn more about how a referral program can increase your sales, schedule a demo today and we will show you!