Using inquiry generation techniques to find new markets and the right customers is the most inexpensive and practical method to increase sales. It is ideal for small manufacturers who do not have field sales organizations or are being forced to find new markets and customers for the first time.
I like to use the words “inquiry” and “lead” to define different aspects of the sales prospecting process. An inquiry is simply an unqualified prospect you may have picked out of a database or someone who may have requested some information. A lead is someone that has been qualified as a prospective buyer who has a need for the product, has a budget for the product or has the authority to specify or buy.
I can explain inquiry generation techniques with a real-life example I will call General Material Handling (GMH). It shows how a small industrial manufacturer without a sales organization found new customers and markets on a very small budget. The lead generation and sales prospecting program made it possible for one inside sales person to get a new product line off the ground and reach the sales forecast in the very first year of operation.
Finding the Target Markets - By coding the quotation list and prospect list with NAICS codes from the previous year's sales efforts, the company was able to determine the markets and the total number of prospects in the markets. The initial list looked like the followingTarget MarketsMarket Prospects
Once the target markets were identified, GMH needed to explore these market segments to identify prospects that could buy their machines. A variety of techniques were used to generate inquiries from the target market segments.
The techniques used were as follows:
1. Advertisements – They could only afford ¼ page ads in specific industry trade journals. They also ran the same ads in the digital version of the magazine
2. News Releases – Many leads can be generated using press releases and new product releases in trade publications, and they are virtually free to manufacturers that know how to generate them. When a reader sees either a digital ad or product release in the digital version, they simply click it and automatically go to the company website.
3. Editorial Stories – Editors are always looking for good stories, particularly if the company writes them.
4. Probing a Specific Market – GMH decided that one of the priority markets that they needed to explore for sales opportunities was the pharmaceutical market. By pre-qualifying 500 different pharmaceutical companies, they reduced the list to 101 qualified prospects. All of these prospects were called by an outside telemarketing firm.
- 23% of the prospects were interested and wanted literature and videos mailed to them
- 6% of the prospects had potential projects and wanted a quotation or a salesman to call on them
5. Website – Prospects, particularly if they have a need, do not want to wait for information to be mailed to them. They will either call the factory direct or look at the company’s website.
6. Trade Shows – Trade shows are another important source of inquiries. The cost to generate inquiries at a trade show is very high, so the company focused on small industry specific shows.
Inquiry Follow-up - Why sales people don’t do sales prospecting - Almost all industrial sales reps agree with lead and prospect qualification and would welcome focusing their time on 50 qualified prospects with projects, rather than 1,200 general inquiries. Today’s industrial salesman is required by his or her factory or principals to do quotations, customer follow-up, training, service and a wide range of administrative tasks. Most do not have the time or patience to spend hours on the phone qualifying hundreds of leads. Also, if they are independent sales people who live on commissions, they will be resistant to qualifying prospects.
There are three solutions:
1. Convince the sales reps that it is their job – you might be able to force them if they are employees and are threatened with their jobs.
2. Hire a sales prospecting person to qualify all leads before sending them to the reps. GMH had assigned a full-time product manager to the new product line, and he followed up on every inquiry with at least three phone calls.
He also sent out all brochures and videos to interested prospects and then follow-up with them until the project turned into an order or died.
3. Employ a sales prospecting service. There are independent telemarketing services that have operators who are trained to handle industrial prospects and can do a lot of the prospecting and qualifying at a relatively low cost.
Tracking leads to quotes and orders – Tracking leads to quotes to orders is absolutely essential if you want to succeed with an inquiry generation program. Since you are going to spend a lot of time and money in finding and qualifying prospects, it only makes sense to design a simple spreadsheet to keep track of the activity. The prospect database can also be connected to the quotation and order information, which makes it possible to trace all leads to quotations and quotations to orders. The report will allow management to assess the costs and benefits of the lead generation program and to make annual changes in media used.
The following is GMH's actual tracking sheet which summarizes the target markets, leads generated, quotes and orders for one year.
Results: The total cost of the lead-generation program was $75,000 and produced $1.6 million (32 orders) in sales the first year.
Email Probe of Target Markets - The telemarketing techniques that were used on this project have been replaced because of advances in technology and databases. The company now uses a system of email blasts to probe a market niche. They buy a list of names from a company like data.com, Jigsaw or Hoovers; that has the contact name, job title and specific email address. They can then send out a sales sheet describing their offer over night in one “blast.” The prospect can then reply by going to the company website or by calling a special 800 number.
Handling Strategic Accounts - If the manufacturer has done a good job of profiling its good and bad customers; it then has enough information to develop a strategic account list. These are the accounts that the company would like to sell in the future. In some industries, fewer then 105 of the customers buy 90% of the products. These customers can rapidly increase the supplier’s market share so they need to be identified and targeted. If the company has purchased one of the latest CRM software packages, then anytime a person from one of these strategic accounts inquires it is automatically flagged to the sales department for quick response.
The owners and managers of small and midsize manufacturing companies are bottom-line-oriented people. They identify more with the tactics for getting orders than with the vagaries of brands or image advertising. No owner or manager is going to continue to spend money on advertising and lead generation, unless it can somehow be justified. Manufacturing companies simply cannot afford to waste their limited resources.
The bottom line justification for advertising is sales. It is not the number of impressions on readers, the magazine subscription numbers, or the image created – it is sales. The message for everyone involved in creating a program to find new customers and markets is that it had better be directly connected to increasing sales, or the budget will probably get cut the next time around.
The most cost efficient method I know of finding new customers and markets is to develop a system to generate inquiries. But increasing sales using inquiries also requires a commitment to follow-up and qualify every inquiry or you are wasting your money. As the story on GMH shows, this approach works and can be very cost effective compared to direct sales or relying on the field sales organization to increase sales on their own.