When I started out in business and started to prospect for new clients, I needed leads. Any leads would do. Even if those leads weren’t highly qualified and ready-to-go, it feels better to be talking to prospects, writing proposals and “keeping busy” than it does doing nothing toward getting new clients.

Pretty soon, lead volume picked up substantially, thanks to the Education-Based Marketing approaches that I have written about on many occasions.

But “mindset-wise”, I was still in the “More Leads = Good” space. I started to get busier and busier, not only performing work for the clients that came in, but also processing and selling to new prospects.

This was when I realised that I needed more efficient ways to deliver hot, ready-to-buy leads to my doorstep to drive up conversion rates and spend LESS time selling to non-clients.

One of the strategies for doing this is the use of “Filters” to pick off UN-qualified leads before they enquire. Here are some examples of the kind of filters I tested:

• Price: “your investment will be in the $7,000 – $10,000 range”
• Aspiration: “if you’re just looking to maintain your current operation, this is not for you. Typical clients aim to increase their business by 50 to 100% within 12 months and have the capacity to do so.”
• Service Exclusions: “this service is designed to generate highly-qualified incoming sales leads via your website. We do not make outgoing cold calls, although your own outbound calling operations can fit into this solution seamlessly.”

An example from the finance industry

Several years later, a client in the finance industry was having a small problem with people who were financially unqualified applying for a specific range of products.

Despite clearly stating the main qualifying conditions on the sales page, a number of visitors were applying directly through the contact form. It was starting to occupy a significant portion of the salespeople’s time just to reply to these people.

The solution was to clearly state just above the contact form that the product was only available to customers who already hold equity in their own home. We even highlighted the relevant phrases with the famous yellow highlighter.

It did the trick.

Overnight, the unqualified leads stopped, leaving the client to focus on qualified enquiries.

One more important thing to keep in mind: occasionally when you employ this strategy, you overdo it and qualified leads get cut out of your funnel prematurely. Obviously you need to keep an eye on your metrics to ensure that this strategy had the desired effect.

For several years now I’ve been asking subscribers and clients to visualise their online sales process as a funnel with knowable metrics. You’re no doubt familiar with the analogy:

1000 visitors hit your website (“Visits”) –>
100 opt in to your Free Special Report (“Opt Ins”) –>
20 enquire (“Leads”) –>
5 become clients (“Sales”)

Whatever the exact number or specific conversion steps are in your business, you get the idea.

But I recently came across a very useful distinction on a Marketing Experiments webinar that dovetailed with a recent experience working with a client.

That is the distinction between Lead Volume and Opportunity Volume.

Lead Volume is the number of people filling out your enquiry form, but Opportunity Volume is the number of viable sales opportunities available to your sales team (or you, if you’re the only salesperson at your company).

Lead Volume is very often a measure of activity. Opportunity Volume is a measure of results and future expected revenues.

I recently dealt with a client whose only metric was Lead Volume: “Just get us more contact form submissions”.

“More contact form submissions is a brief that is relatively easy to fulfil. For starters, you can make the form easier to complete. Second, remove “strings” from the offer or add a guarantee.

When you do this, will the leads be more qualified? Will you create more viable Sales Opportunities? Not necessarily. In fact, you can very often clog up your sales pipeline with unqualified leads that do nothing more than take up your salespeople’s time and detract from closing genuine sales opportunities.

That’s why I’ve now included Opportunity Volume as one of the key lead generation metrics to track. It is a more reliable indicator of the success of your pre-sales marketing activities.

Are you frustrated by tyre-kickers and free-advice seekers who waste your time, reduce the efficiency of your sales and marketing efforts and cut into your ability to service paying clients?

Many business owners and marketers are.  Especially if you’re in a service-based or professional service business, the time and money it takes to simply attract and convert a paying customer can significantly eat into your billable hours and therefore income.

This is probably the number one reason why many otherwise highly-skilled independent professionals and businesspeople find themselves eking out a relatively modest living (certainly well below their abilities and expectations) and wondering why they got into business in the first place.

Or maybe you’re doing pretty well, yet mindful of the fact that 10 or 20% of your productive time is being wasted on filtering out the tyre-kickers.

I was once there too.  Here’s the story of how I broke out of this particular cell of the entrepreneurial prison…

It all started back in 1928… (oops, wrong story. Reset.)

3 or 4 years ago I found that my ability to do productive work for clients (mainly developing high-ROI lead generation websites on a project basis) was being constrained by the volume of prospects who weren’t converting into paying clients.

Just 1 in 4 proposals were converting into a client engagement. Suppose that every proposal took an hour on the phone, plus 2 hours of writing to prepare – that meant that each new project was taking 12 hours of sales time to close.  Owch.

What’s more, many prospects would soak up my time for free, take our intellectual property in the form of the proposal, then either:

1. Do nothing
2. Take our ideas and (try to) implement them in-house
3. Take our ideas and give them to someone else to implement
4. Proceed with the proposed project

Only Outcome #4 was what I wanted (and only that outcome would typically produce the result the client was looking for too).

What to do?

I put a stop to all free proposals. Instead, I held a 15 minute chat on the phone to pre-qualify the client, then explained that I would prepare an Online Marketing Action Plan [note the syntax: "Proposal" is such a weak word] for them for a nominal fee of $200 + GST.   I also explained:

• an outline of the value that the Action Plan would contain
• that we would present some implementation options for them to consider
• that because they had purchased the Action Plan, they would be free to implement the plan in-house or take it to someone else to implement if they chose to do so
• that the cost of the Action Plan would be attributed to the cost of any future project

Then I asked them to go ahead.

Here’s what happened:

1. “Tyre kickers” went no further – great!
2. Serious prospects proceeded with the Action Plan, and I was happy to deliver it, putting extra effort into its preparation (although you should note that the Action Plan itself was essentially just a renamed version of the “Proposal” from before).
3. The conversion rate to full projects went from 1 in 4 (25%) to 2 in 3 (67%) – an increase of over 2 1/2 times.
4. I spent less time selling and got better sales results, while delivering more value to the prospects and clients whom I really wanted to help.

To successfully institute a fee-based proposal system, here are a few pointers:

1. Warm leads are important. The warmer the lead, the less resistance you will have to your initial fee.  One of the best ways to warm up leads is via a well-orchestrated information-and-education campaign (which can be completely automated via your website).
2. A well-defined USP that addresses the key problem your prospects are facing. You need to know the problem you’re solving for the client and the benefits you can render, and express that in a client-centric way.  (If you can’t recite you USP by heart, you probably don’t have one.)
3. You need to prepare a “mini-pitch” to sell the proposal. I purposely designed my Action Plan content and pricing, not as a revenue generator, but as a “filter” for non-clients.  Nevertheless, I did need a mini-pitch explain the value and sell the plan.
4. A delivery mechanism that is as systematised as possible. (Although the more customised you want to make the proposal, the more you can charge.  I now perform a more advanced Workshop and Action Plan that costs $3,000 + GST)
5. A seamless process to convert proposals into clients. You don’t want to wind up writing tonnes of proposals and lose site of your outcome.

“But my industry is different” / “All my competitors do free quotes so I have to as well” / “This won’t work in my business”

It’s true that certain industries may be a more “logical” fit for paid proposals or quotes, but that doesn’t mean you should dismiss paid proposals out-of-hand.

We are working with one client in a finance-related niche where EVERY OTHER COMPETITOR does everything “Free”, yet we are putting together a series of fee-based offers that are successful because they are based around additional value to the client.

Another option is to have multiple lead “streams” – a “free” stream and a “paid” stream.  Within a short time you will work out where the buyers are and how to attract and service them better.

Give paid proposals a try, or contact us and we can help you optimise your lead generation funnel by orders of magnitude.

But you should know, it’ll cost you

We work with a number of clients in finance and professional services industries.

Here’s the story of how a few years ago I increased my conversion rate of prospects to customers from 20% to 66%, and completely eliminated tyre-kickers and free-advice-seekers from my sales funnel and got PAID to do so…