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Lori Feldman is president of Aviva, a mailing list and database marketing and Internet consulting firm and an ACT! Software Certified Consultant. She is this year's Direct Marketer of the Year, awarded by the Direct Marketing [link widoczny dla zalogowanych] Assn. of St. Louis. Reach her at
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Do the math! Start building and marketing to your prospect database now, and you'll [link widoczny dla zalogowanych] meet your numbers by year-end.
1. Buy a targeted prospect mailing list. Review your top 20 customers and figure out the demographics that make them ideal customers for [link widoczny dla zalogowanych] your business. Then buy lists of these prospects. There are 40,000 different prospect lists on the market; you'll need to find the best 3 to 4 that fit your "profile." You may find it faster and cheaper to have a mailing list broker help you find these needles in the haystack.
Let's say your annual sales quota is $750,000. An average order is $1,000. You're a pretty good sales person so let's say your closing rate is 40%. Using the formula above ($750,000 / $500 / 40%), you'll [link widoczny dla zalogowanych] need 3,750 new leads, or 313 new leads per month. If you're relying on traditional prospecting like shoe leather (networking, clipping "prospects" from the paper, telemarketing), you're not going to get "there" in time! The fastest way to build a client base is to build a database of qualified prospects. Consider these shortcuts:
3. HP, the printer company, did a study that showed 80% of a buyer's sales decision is made by the time he calls you. Consequently, your goal is to make prospects call you. With enough prospects, you can start a drip-marketing campaign to educate [link widoczny dla zalogowanych] and qualify them. Use direct mail letters and postcards to drive prospects to your website, where you can then capture their opt-in email addresses to [link widoczny dla zalogowanych] start email marketing campaigns.
Several years ago I worked with a CPA who wanted 20 new clients. We came up with a great direct marketing campaign that brought in 10 leads per 1,000 letters. His closing rate was 10%, so after his first few clients came on board, we calculated that acquiring new clients was costing him between $500 and $600. He liked the numbers (one client was worth about $8,000/year), but progress was slow. We advised him to open the spigot and mail 5,000 at a time, instead of the 1,000 he was sending. It worked, and he acquired the [link widoczny dla zalogowanych] new clients he was looking for sooner rather than later.
Database marketing is all about up-selling and cross-selling your existing customers and targeting prospects to find qualified buyers who are ready to buy now. It's a numbers game. The more you put into the funnel, the more orders that come out at the other end. Here's the formula for calculating how many leads you'll need this year:
Annual projected sales / average order [link widoczny dla zalogowanych] size / sales close percentage rate.
I do quite a bit of public speaking on direct marketing. One question I like to ask my audience is [link widoczny dla zalogowanych] "How large is your database?" I get answers anywhere from 100 to 250,000. I worry about companies who don't have at least [link widoczny dla zalogowanych] 2,500 names in their databases. Unless they're selling [link widoczny dla zalogowanych] high six-figure products or services or have a closing rate near 100%, they don't have enough prospects to meet their numbers.
2. Capture targeted leads off the Internet. Rather than cut and paste, you can use data capture software to compile your own chamber lists, membership lists, yellow pages listings, and email signatures in an Excel-spreadsheet-like format, which can then be [link widoczny dla zalogowanych] downloaded into ACT! or any database.
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