The Hidden Cost of Bad Leads
Bad leads are bad for business. Time, energy, reputation, and ultimately, money are all at risk. And yet, many business owners still pursue bad leads, under the impression that any lead is better than none. Of course, in a pressured economy, it may feel like your business cannot stand still and that any chance of business is worth taking. But, this isn’t necessarily the case. This blog will discuss the hidden cost of bad leads, how to avoid them, and how E5 Evaluate can help you identify and qualify the best leads for your business growth objectives.
Uncovering the hidden costs
We all know that when working with highly qualified leads the journey to convert prospective clients into business is much easier, with less stress, better relationship building, a faster process and a lower cost per conversion as a firm measure of success. Yet still, many business owners devote valuable time, energy and money into pursuing the wrong type of clients.
As the obvious financial burden, there also are hidden costs in pursuing bad leads. A loss of time and energy, damage to your reputation, and loss of trust from your clients are all in-kind costs to you and your business.
When you spend time concentrating on the wrong leads, you are diverting your attention from pursuing better quality leads, and in turn damaging your conversion rates, reducing your capacity for growth and annihilating your bottom line. In an increasingly busy world where efficiency is key, this time costs. But, if you’re unable to weed out bad leads, it’s not just your own time wasted. Passing on bad or even incomplete leads to sales partners means their time and energy is also wasted and if the problem is not rectified, then the end point could be a loss of faith and trust in your abilities and your brand.
The impact on your reputation is most dangerous to your business. Having spent months or years building your brand, you have one chance to make a good impression. Working with the wrong clients usually results in misaligned expectations, poor communication and frustrations from both sides. You may end up agreeing to work with clients who you can’t help, don’t get along with or have misaligned values. Any of these factors can lead to a fractious relationship, causing stress and reputational damage. If this isn’t corrected quickly, then you’ll also miss potential future business opportunities or damage more positive client relationships..
How to identify your ideal client
Obviously, it’s best to avoid bad leads in the first place and save yourself valuable time, energy, and money from the outset. But to do this you need to understand who your perfect client actually is. First, document the key attributes of your perfect customer. Ask yourself the following question:
- Who are they? (business type, sector, size, seniority or buying authority, demographics)
- Where do they hang out? (online publications, social media, exhibitions or events etc)
- What challenges do they experience? (and how can you craft your message to attract them)
- What values do they hold? (you want to try and identify the personality traits and values that means they will be a valuable and enjoyable customer to work with)
Once you have defined your ideal customer, create a persona to help you always have a visual representation in your mind. Then consider the techniques you’ll use to uncover this information. Discovery calls, for example, give you an opportunity to evaluate your prospects. Consider using one of the many established qualification frameworks, such as BANT:
- Budget: Is the prospect capable of buying?
- Authority: Does your contact have adequate authority to sign off on a purchase?
- Need: Does the prospect have a business pain you can solve?
- Timeline: When is the prospect planning to buy?
Your ultimate aim is to quickly determine whether your prospect has a specific need or challenge that you can satisfy and whether it’s feasible for your lead to implement your particular product or service. If there are red flags such as a lack of communication, little response or your lead is inconsistent then don’t be afraid to reject that lead.
Make discovery calls more productive
Typically, discovery calls last 30 mins to one hour, during which, you will attempt to understand if your prospect is the right type of customer and your prospect will aim to learn if you are the right fit for their need. This is a costly way to spend your time, especially if your prospect turns out to be the completely wrong type of customer for your business.
Wouldn’t it be better for everyone if you could highly qualify your prospect before wasting each others time on a call or meeting?
Assessment-based marketing helps you generate powerful market intelligence to make sure you improve the number and quality of the prospects you convert, qualifying the right clients, at the right time. Interactive and non intrusive questionnaires help you uncover your customers needs and challenges, their potential to do business with you and whether they are the right cultural fit for your business. Ultimately, it opens the door to meaningful conversations with your ideal customers, based on your existing detailed knowledge of their business.
What’s more, by providing bespoke advice based on your prospects questionnaire, assessment based marketing enables you to disqualify the wrong prospects in a positive way. Leaving them feeling listened to and nurtured, with useful information to help them find solutions to their challenges and saving you valuable time and energy in the long run.
Bad leads are bad for business
Separating the best prospects from those who aren’t the right fit is crucial for rapid business growth. It makes you more productive, focused and results driven whilst helping you save money, time, energy, and reputation. If you feel that you’re often left frustrated by proposals that never convert or spend hours in meetings with prospects that never go anywhere, E5 Evaluate can help. Our engaging and insightful scorecard software helps you start profound conversations with your potential customers and quickly qualify your perfect potential clients..