Of all the aspects of running a small business, the most important is that of lead generation. There are plenty of other important processes but by far the most important is lead generation. Without a steady flow of sales leads, your business will fail. Imagine you have the best product, with the best performance and lowest breakdown rates. Without sales leads, there is no hope of securing profitable revenue.
I suppose, to be totally accurate, it is sales revenue that you need to finance the rest of the business, rather than sales leads. Obviously there is a scenario in which you could successfully generate leads but be unable to convert them into sales. I suspect this scenario is unlikely to arise. The management teams of most small businesses would be experienced enough and be capable of converting leads into sales. If they couldn’t, their business would still go bust, even with a steady flow of sales leads.
The conversion rate of leads to sales can be improved through sales training and coaching/mentoring. Without a sufficient number of sales leads, though, there is nothing the small business owner can do to avoid going bust.
Lead generation must be the top priority.
Converting leads into sales is the second priority. If you can get this part of your business buzzing, the rest will be much easier to get right.
Relatively few small business owners seem to appreciate how critical it is to succeed at lead generation. They know they need to find leads before they can generate sales. As a result, they attend networking events or cold-call some previously identified contacts. They might try some email marketing or (if appropriate) perform a door-to-door leaflet drop.
None of it will be undertaken consistently and not in a structured way. When they do find some new prospects, lead generation is largely forgotten as these prospects are progressed through the sales cycle and, hopefully, some are converted into clients.
For many small businesses, this is enough to allow them to generate enough income to cover their costs, just. There is no resilience whatsoever in the business. A couple of bad months will put them into serious financial difficulty.
This sort of stop/start lead generation activity means you are fuelling the feast/famine nature of sales. This goes something like this: you find yourself short on sales and short of prospects. You respond by initiating some lead generation activities. Everyone is aware of the desperate need to find new sale opportunities, this becomes their dominant thought.
As a result, you identify a few prospects. These begin to dominate your schedule. The pressing need for sales means you put all your efforts into converting these prospects into clients. Once they are signed up, you then switch your focus onto delivering what your contract commits you to deliver to these new clients. There is no time for lead generation, so this activity takes a back seat.
Eventually, all the deliveries have been made and as you review the state of your business it becomes clear you are short of sales and prospects and the cycle repeats.
Lead generation has got to be given a higher priority. It must be undertaken more consistently, even when you are busy delivering products/services to clients. When you do, the flow of prospects becomes steadier as does the flow of sales. The feast/famine cycle is broken by undertaking lead generation more consistently.
- Measure the consistency of your current lead generation process. Identify the reasons why it is inconsistent.
- Develop a plan to lift your lead generation activities to a more consistent level. Identify what extra resources you might need. Explore how you can source these resources at a modest cost.
- Measure your conversion rates of prospects to clients and identify ways you could improve your performance.