Marketing and Sales

April 24, 2006

Sales or Leads? Which is better…

Filed under: Marketing,Tips and Hints — Philippe Mesritz @ 2:35 pm

Well, obviously — Sales, in the long run, is better for your company! Without the final sale, you are unable to proceed and establish a relationship with a customer to generate revenue. That, however, been said, the question is really whether it is better to hire a telemarketing organization to do your sales for you or to simply generate leads that have been pre-qualified. It is a decision that can not easily be made without truly understanding the advantages to both.
Why sales?
The advantage to hiring a company that has a sales force to do it for you is that you don't need to think about it at all. When the company gives you the name of a customer, they've already paid for the item or service or they've already signed up for the contract. It is a no thought process on the company's side, a simple solution to what can be a very difficult task. It does, however, have drawbacks that need to be considered. An outside sales person, unless they've gone through rigorous training with your company or have an established relationship, can not easily know as much about your company as you, or an employee, can. There are questions that the sales person may not be able to answer which could, in turn, cause the sale to be lost. In addition to this, an outside sales person will cost you more. Often, sales companies charge a high percentage of the final invoice to make your sale. They've done the initial work to get you the client. In many cases, this is the most difficult aspect of doing business. One large advantage to having a company do sales for you is that, once you've ensured they're not tainting your reputation and are doing what you want them to, you do not need to spend a significant amount of time on them. The company has great incentive to ensure that sales are being made and, as such, you can concentrate on other aspects of running your business.

Why Leads?

Instead of sales, a company can be brought on to generate leads. These leads should be pre-qualified and with a decision maker before they ever hit your sales team's desk. Once they do, however, there should be nothing to stop your sales team from calling the prospect and turning them into a customer with excellent rates of success. Leads are an excellent source of genuine targets. A drawback to leads, however, is that you may receive too many for your sales force to handle and that it is crucial to follow up on them almost immediately. These are customers that have shown interest, but without strong and swift follow up, their interest will wane with each passing moment. Leads have the advantage that they tend to be cheaper than sales, in terms of impacting your bottom line. Many lead generation companies charge a base for each lead generated, a commission for each lead generation, or some combination there of. In all cases, the impotus is on you to ensure that the qualified leads are now contacted and to make the final sale.

As you can tell, neither method, sales nor leads, has a significant leg up on the other. Each has its distinct advantages and disadvantages, whether that is in terms of cost, time or effort. Overall, however, finding an outside company which can do either sales or lead generation for you is a choice that can improve your bottom line and help your company grow.

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2 Comments »

  1. Sales or Leads:
    We have just started with our new online store. we have a great team working with us, when do you think or where would we get Leads from? We dont have any sales reps, since most of our Buisness is via the Internet. what do you think?

    Ernest

    Comment by Ernest — April 24, 2006 @ 5:55 pm | Reply

  2. Without a sales force, leads are fairly useless. Just having leads doesn’t do you any good unless you have someone to contact those leads to try to complete the sale itself. That having been said:

    There’s a lot of places that you can get leads. It depends on whether you want to have them be ‘hot’ (i.e. someone’s talked to the prospects before you and the prospect has shown interest) or ‘qualified’ (they fit your profile of prospects).

    To get the first, the easiest way would be to work with companies such as mine. These companies prequalify the prospects before you speak with them and, from there, you close the deal. This normally works well for high(er) price points (Say $2000+ per sale).

    To get ‘qualified’ leads, a good way to do it is to use database companies. You need to make sure that you do the research, however, that the leads are actually good. Good leads can be expensive to buy. Assuming your online store is consumer based and not business to business, this is really the best way to go about it — buying leads from a database.

    Without vouching for their services(*), salesgenie.com has started selling unlimited leads for $300 per month. This may be a way to go if you feel that their database is up to date.

    One big thing about buying leads for consumers, however, is that you MUST run it through the Federal Do Not Call (DNC) list. The DNC list prevents businesses from calling consumers and, if you call them anyway, you may be penalized heavily. It is also required to register yourself as a consumer telemarketing company. I suggest that you either research the specific details or retain a company that can give you advice on what steps to take.

    (*) I can not vouch for their services and any use of them is up to you. This is not legal advice nor is it suggested that you purchase their subscription. As an individual nor as a company, I have never used their services, though I am currently looking into them.

    Comment by ndmpmesritz — April 24, 2006 @ 8:09 pm | Reply


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