I read something from Joanne Black the other day that’s been bothering me. I like Joanne Black. She’s the author of No More Cold Calling and I recommend her stuff. But she wrote a column the other day suggesting small businesses should throw out all the people in their database that are not highly qualified. In the article, she made the following comment that I think could lead some small businesses astray:
“We have to change how we talk about leads. Inquiries are not leads, people wanting free stuff are not leads, neither are those “coveted” lists or files of names. Calling these leads borders on insulting. Leads are people who are truly interested in talking to you about your product or service. They match the profile of your ideal client, they have budget, they have a need, and they are open to pursuing how you can help grow their business.”
In general, I agree with Joanne. Qualifying leads is important. And we all need to differentiate between a suspect, a prospect, a lead, a hot lead, etc. But my concern is that what she calls “trash” might be construed to mean “people who are not ready to buy right now.” This is seriously important. “Leads” that are not good today could be great tomorrow, or in six months, or in six years. Do you want to eliminate those folks from your funnel? NO! You just want to talk to them differently, nurture them until the time is right for those prospects. Unfortunately, most small businesses leave a ton of opportunity on the table because they disregard the suspects and prospects who are not ready to buy right now. I would argue that these folks ARE leads–they’re just not ready to buy right now.
It’s like the brilliant marketer Dan Kennedy has said many times: “The difference between salad and garbage is timing.”
Leads are a lot like salad.
Clate, “trash†might mean people who are not ready to buy right now. Then again, it could be recognition that the probability they’ll ever buy exceeds the cost of “nurturing†them. I’m sure you’ll agree that there are actual dollars, or fractions of, in nurturing any relationship.
Example: The primary reason e-mail spam continues is its ridiculously low cost. If the average spammer had to pay even a penny for each e-mail, you’d find those lists of millions of people who “may buy someday†chopped down to eliminate those with minimal likelihood of purchasing, which is what I believe Joanne Black is saying. (Please don’t take this as equating marketing and spam).
In my opinion, the determination between “trash†and “leads†is the cost of additional contact.
Comment by Chuck McKay — February 4, 2008 @ 10:06 pm
I think you hit the nail on the head, Chuck. There are definitely incremental costs to nurturing, but smart companies will drive down those costs so that what used to be considered “trash” is now considered a “lead.” Sending batch emails to the house list does decrease cost per contact, but most batch email practitioners don’t segment and hyper-target their lists very well. As a result, they end up sending a bunch of unwanted emails to their prospect list and their harvesting efforts aren’t as effective as they could be.
So, how do smart companies drive down the cost per contact? My answer is they can do it through elegent, automated follow-up marketing. It’s like motion-sensor marketing: when a prospect takes a certain action, that action is detected, logged in the database and the customer is put into an automated communication sequence that’s tailored to the customer based on the customer’s interaction with the company.
Of course, my solution to driving down cost per additional contact is biased because this is exactly what our software does for our customers. But it’s the best way I know of to turn more trash into leads.
Comment by Clate — February 11, 2008 @ 11:48 am
Hi Clate:
Thanks for writing about my article. Let me clear up a misconception. I do not promote companies throwing people out of their database because they’re not qualified. What I do promote is companies carefully determining who matches their Ideal Client profile and crafting strategies to reach that audience.
What sends me over the top is companies who sell lists and market these lists as “qualified leads.” They’re not qualified. They’re just names. And salespeople spend a lot of valuable time trying to reach “names.”
Hope that helps.
Comment by Joanne Black — March 4, 2008 @ 8:04 pm
Hi Joanne,
In that case, I’m with you all the way. Selling lists as “qualified leads” is a joke… and a big waste of time and money for the companies that are chasing those qualified leads. I totally agree that throwing out leads that don’t quite fit the Ideal Client profile is a mistake. Of course, it’s also a mistake to leave those leads in the database and do nothing with them.
They’ve gotta be warmed and nurtured if the company holds any real hope of converting those leads over time.
Thanks for your post, Joanne. I love your stuff and find myself nodding in agreement when I read your articles.
Comment by Clate Mask — March 4, 2008 @ 10:34 pm