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Buying Sales Leads - Is it Right for Your Company?

One of the key components to a successful sales effort is the ability to seek, identify and approach qualified sales leads. As opposed to casting a wide net and wasting significant time and funds pursing customers where few customers are to be found, qualified sales leads zero in on your targeted market and steer your sales effort to high probability prospects.

Some companies have lead generation strategies that begin and end with the phone book or some other registry of companies in a particular geographic area. Others use the “six degrees of separation” tactic, meaning they try to approach everyone they know and everyone everyone they know knows (if you know what I mean). These are two particularly wasteful (and useless) approaches. Even though you may in fact grab some leads and make some sales using these methods, the time and cost per sale is way too high. Besides, these are not sustainable models. Eventually you run out of who you know (and all their acquaintances).
The importance of the strategy you adopt regarding sales leads transcends the volume and types of sales your company will make. It also plays a tremendous role in keeping your sales force motivated. When you leave them to their wits, having to scavenge leads from any place possible, your sales force not only sells less (and thereby earns less), but it will also feel abandoned and neglected. If you provide your sales force with the means to gain qualified leads, they most likely will reward you not only with higher sales, but also with a genuinely more enthusiastic effort (which in the long run leads to even more sales). Also, by removing the need to generate sales leads from the job description of your sales force, you are freeing them up to close sales, which is really what their job ought to be.

One way to gain access to highly qualified sales leads is to buy them from companies that maintain huge databases of corporate intelligence and sell select information for fees usually based on the number of leads purchased. Buying leads is a tricky venture and one that needs to be entered into only after careful consideration of your ROI expectations and careful evaluation of the leads company you elect to work with. Three considerations you need to pay attention to are:

1. What is the program being offered and what recourse do you have if the program does not work? You want a program that is systematic in its approach and has clearly defined characteristics of what is to be defined as a qualified lead. You also want some recourse, such as a reduction in your financial liability, if the program fails to yield the sales increases defined within the objectives of the program.

2. Is the company willing to allow a trial period before you sign on for a prolonged period? Most companies want some commitment from you that once they prove their value you will allow them to prosper by continuing to use their services. This is perfectly reasonable provided they permit you to use the service for at least 3 months with no further commitment so you can measure the effectiveness of their service and determine whether or not the leads they are providing are generating sales.

3. Does the company have a proper system of reporting? You want to be sure that the leads company has the systems in place not only to accurately identified leads (based on your description of your target market), but also to provide you with the data you need to help analyze the effective of the leads purchasing project.

There are some strategies that can be pursued that allow for effective sales lead generation and that do not include purchasing qualified leads. These include:

1. Web strategies that generate inquiries and referrals.
2. Direct mail.
3. Telemarketing.
4. Direct response advertising.

Of all these methods, none will provide you with the ability to zero in on your targeted market so readily and directly as buying sales leads. When done carefully and wisely, buying leads directs your sales force to a higher caliber of prospect. From there, their sales skills and the value of your offering take over. And that’s the way it should be.

Norman Lucas is Tudog's Director of Strategic Planning.

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