Many businesses have lead sources of a wide variety. Without your lead sources, you would not be in business. The question is, are they good lead sources and which ones are most effective?
What is a lead source?
A lead source is where a lead hears or learns about your business. A lead source can be online or offline. A few examples for lead sources include:
- Online advertising like Facebook ads or Google ads
- Organic search from Search Engine Optimization (SEO)
- Membership organizations such as your chamber of commerce or industry group
- Social media posts
- Landing pages on your website
- Networking events
Each one of these channels is a lead source if it guides people into your sales funnel. However, not every lead source is the best lead source for you. How do you analyze and identify which lead sources are most effective?
Picture this scenario…
Jonathan and Sarah own an online shoe store, specializing in handmade shoes and boots, with 3 salespeople and 7 shoemakers. They use different channels to attract new customers who can request a quote straight from their website. Channels include:
- Online advertising
- Social media
- Networking events (online and offline)
Business is going well. They regularly meet or exceed their weekly target for new orders. Their shoemakers remain busy. Recently, they have noticed that, more often than not, it takes the sales team 3 times longer than the previous quarter to close a sale. Jonathan and Sarah use a CRM to track all leads, their originating source, and orders, so they started analyzing their data.
Here is what they found.
In the last quarter, they began attending several new online business networks as well as increased their ad spending budget for a social media platform that targets college-age individuals.
Prior to this quarter, they noticed that the lead sources that brought in the most sales with the shortest sales cycle were online ads on Google and Bing, SEO, and hand-made craft fair and tradeshows. When they began to attend the new online networking events and increased their ad spend on a specific social media platform, they noticed they were converting sales, but the sales cycle was longer. They also noticed that the longer the sales cycle, the less likely that the customer referred or bought from them again. Because of this, Jonathan and Sarah experienced Follow Up Fatigue.
So what did they do?
Jonathan and Sarah re-adjusted their marketing strategy by re-allocating the ad spending budget towards AdWords. They also stopped attending the new networking events and began investing more time into craft fairs and tradeshows. Now they are starting to see the sales cycle shorten once again. On top of that, more customers are repeat buyers and referrers.
How did they identify their most profitable lead sources?
- They used their CRM. A CRM is much more than a platform to collect customer data and automate tasks. It can be used to analyze customer buying patterns and behaviors to help you make informative business decisions.
- They looked at the lead sources with the most sales and the shortest sales cycle. You may enjoy going to networking events and passionately talk about your product and service, but if the event is not converting people to customers, it will only cause frustration and Follow Up Fatigue in the end.
- They analyzed the characteristics of their buyers demographics. You will be surrounded with “experts” telling you that you need to pursue specific demographics because that is what is trending. Just because you see a sales trend, it may not be right for your business. In the case of Jonathan and Sarah, they noticed that their best customers had disposable income and did not engage very often with a social media platform used by college students. This explained why the college student took longer to purchase and produced Follow Up Fatigue among their sales team.
It is possible to spread yourself to thin with the number of lead sources to attract new customers. This is why it is important to use a CRM, so you can track which lead sources bring the most revenue and know the characteristics of the buyers that come from your most profitable lead sources. If you are not using a CRM, contact us today to schedule a demo of X2CRM and learn how X2CRM can help you track and identify your most profitable lead sources.