I recently had the opportunity to address a large group of our customers, most of whom were either job shop owners or pretty high up in operations. I asked for a show of hands, “How many salespeople do we have in here today?” A sparse number of hands went up. I challenged the group and asked, “Aren’t you all salespeople, and if you’re not, shouldn’t you be?”
One of the biggest hurdles to boosting sales growth in a job shop is to put on that sales hat and begin thinking in terms of your shop as a marketing organization. Maybe that sales and marketing department is you: the cook, server, and bottle washer, but if you truly want to grow your sales, start by answering the following questions.
Do not, of course, neglect trying to get more sales out of existing customers. That’s the stuff of another blog. New customers will lift your sales, but have you really studied and tried to understand how to get a new customer? As a follow up to to a previous blog post of mine, Job shop Marketing in 5 Easy Steps, I wanted to drill down a little deeper on some ways to start measuring marketing and sales in your job shop.
1. Just how many leads do you have?
Okay, let’s start with leads. How many? Where are they coming from? They could be from referrals, old-fashioned networking, your website, trade shows, email marketing. It’s good to know which of these channels is working best for you. Your first step is to get a handle on the total number of leads and segment them by which sources are working best for you.
Realize the importance of distinguishing the types of leads based on their sales readiness or point in the buying cycle. There are: 1. visits or traffic; 2. marketing-qualified leads; and 3. sales-qualified leads (you can also think of these in terms of leads, qualified leads, and prospects). You can also break it down further into even more categories, but I’ve found these to be the most practical.
Traffic or visitors are terms to refer to those who are ‘just visiting’ or are on the front end of the lead spectrum. ‘Visit’ is a term we at Shoptech are beginning to adopt due to the increased role that the web is playing in our marketing. (See web visitors or web traffic).
Your website, of course, should be an increasingly important driver of your leads, but ‘traffic’ can also refer to that guy on the trade show floor picking up your giveaway pens, a website visitor, a phone call, or any of those preliminary-stage leads that you hope to push forward into a stronger lead.
You want to generate as much traffic as you can, obviously, then whittle down that traffic into manageable leads. Traffic or visitors are “unqualified.”
2. How many of your visitors are you turning into marketing-qualified leads?
Converting visitors into qualified leads is a key step, obviously, but one that needs to be tracked if you want to measure your progress in the grand scheme of improving your marketing. How many of your visitors are you converting into marketing-qualified leads? Marketing-qualified leads are those that are more likely to become a customer based on some activity. Maybe they expressed interest in seeing some samples of your work, heard great things about your shop and they want to talk to one of your customers, signed up to view a demo, or downloaded something from your website. Marketing-qualified leads are what get a good salesman motivated.
Sales-qualified leads – leads even closer to being converted into customers – have to be defined by your sales team, and are usually those leads that have been further qualified by some interaction, and a clear opportunity (timeframe, budget) for a sale has been determined. Good prospects. Ready to buy.
Qualified leads, of course are where you should spending your time moving these prospects closer to the sale.
3. How many of your qualified leads are your converting into customers?
What percentage of your leads are you actually turning into paying customers? Do you currently track that number? If you’re not, start. That will give you a benchmark as you begin applying these metrics. Once you know that percentage, you can set targets for converting customers and increasing your sales. If you’ve never looked at your business development this way, it can open your eyes to a key aspect of business planning.
Let’s say you have 100 leads, and 3 of them are converted into customers. That gives you a 3% conversion rate. Well, maybe next year, you want to shoot for a 5% rate. Academic, yes, but you’d be surprised how many job shops don’t measure and establish lead conversion rates.
Lead scoring, a key component of inbound marketing whereby leads are actually ‘graded’ based on the kinds of interaction they have with your business, is one example of how to bring some marketing planning to your shop. Lead scoring enables you to assign priority levels to leads and assign a corresponding amount of sales nurturing to move that lead to the close stage.
According to MarketingSherpa’s B2B Benchmarking Report, only 21% of B2B marketers have actually established a lead scoring program. Now break that down further into contract manufacturing and job shops, and I’ll venture to say that number is considerably smaller.
Unfortunately many job shops are so tied up and preoccupied in shop floor aspects of their business – measuring things like production rates, defect reduction, scheduling efficiencies, etc., – the ‘process’ of lead generation and conversion – much less the concept of lead scoring – may be seem pie in the sky.
While measuring your sales and marketing may on the surface sound out of the reach of modest job shops, the principles are not. Who knows? If you answer these questions, you might be on the road to boosting your sales and no longer being a modest job shop, but a fast-growing, marketing-driven manufacturer.