How to Generate
Successful Sales Leads
by Phil Britt
There are several separate types of marketing efforts, each with their own unique costs, uses, response rates and effectiveness. Below is a look at the strengths and weaknesses of these methods.
Lists of new businesses (those two to eight weeks old) can be obtained from county courthouses or other places where new companies need to register, typically for 30 to 50 cents per name. With postcards, the mailing and name acquisition costs are low, but so is the response rate, typically, .5 to 1 percent.
Accessing state government sites via the Internet can generate much of the same information about new business registrations, liquor licenses and other information, but doing such research may be a little more time-consuming than obtaining the physical lists, according to Phil Green, an industry veteran who recently started his own ISO, American Bankcard Systems in Austin, TX.
For a young ISO that is just starting out, like American Bankcard Systems, starting with such low-cost lists is the first step in developing a comprehensive direct mail campaign enroute to an encompassing sales lead generation effort.
Brochures, newsletters, etc., are more costly than postcards, but may generate a slightly higher response rate, so the higher cost may be worthwhile.
Odd-sized mail is another way that can result in an increased response rate, though it is also more expensive than postcards.
For example, one ISO is just starting a direct mail effort that involves a reply card on one side and colorful graphics on the other. It's more expensive than a typical mailer, but the company hopes that an increased response rate will justify the higher cost.
Whatever type of mailing is used needs to be done quickly. The typical merchant services company has anywhere from five to 15 competitors that will also send off direct mail literature or use another manner to contact new businesses. So the race often goes to the swift, according to Mike Hill, owner of Cardmaster Merchant Services, an independent company based in Collinsville, IL, that offers various merchant services.
While some salespeople leave a brochure with a merchant, then call back later to assess interest, this type of material tends to get thrown out, buried or otherwise ignored, if not immediately, then shortly thereafter.
Also called "trash and trinkets," leave behinds include items like pens, magnets, etc. If using this type of item, leave behind an item that will be used by the merchant, like a letter opener, rather than something that will be easily ignored or lost. Just having the name in front of the merchant may be enough to generate a call when the merchant needs the ISO's services in the future.
Even though referrals are perhaps the oldest form of marketing, dating back before the telephone or even the U.S. Postal Service, this method still results in some of the best quality leads. The merchant that declines to buy from you may not want your products at this time or may be locked into a contract with one of your competitors. However, he may be more than happy to refer you to others who are good prospects.
To entice the merchant to provide those referrals, offer something of value in return. After all, good referrals lead to sales, which lead to profits. Rather than a typical leave behind, provide something like a coin counter that the merchant can genuinely use and appreciate in return for a certain number of referrals.
An item like a coin counter may work better than a cash payment (upon close of the deal), because the merchant may question "making money" from other merchants in this manner. So they are much more likely to accept a referral gift.
Green says that referrals have worked quite well for his firm.
While meeting someone face-to-face may be necessary before closing many deals, to start this way means a high rejection rate. When entering a business, make sure that you're talking to the decision maker, rather than a clerk, receptionist, etc.
Many ISOs use this method because they rely on commissioned salespeople, who don't want to wait several weeks or month for a deal to close. However, in 40 cold call merchant visits, the salesperson will typically generate only eight meetings with decision makers, leading to four sales presentations. Some markets may require 60 cold call visits to generate the same results. Since sales presentations last 30 minutes or more apiece, this means that the 40 merchants need to be clustered close together geographically in the interest of time. So some smaller pockets of merchants may be ignored using this method.
Typically, the ISO will need to make 100 telemarketing calls in order to generate 10 appointments, leading to one closed deal, according to industry experts.
"A lot of it is just a numbers game," Green agrees. "If you make 200 telemarketing calls in a day and make four sales, it's not a bad day's work."
There's no right or wrong way to make a telemarketing call, Green adds. Different sales people are more comfortable and more successful with different methods.
While online marketing may have some value in generating leads in some other businesses, there's too much expense and too little value for ISOs to put much value in this type of marketing effort.
Internet "mailing" lists aren't refined to the point yet that an ISO can obtain a good list of potential customers. Also, setting up the online template alone can cost more than $10,000.
However, with additional time investment to use the Internet to access government information, you will find that the Internet provides a wealth of "free" (there are dial-up and access charges) research capabilities to help develop telemarketing and print mailing lists. However, as with researching DBA and other information, it can be very time-consuming, not just due to the wealth of information available, but also because that information is often poorly packaged - so it can often take a long time to find the information you want, even once you reach the desired home page(s).
Additionally, it's important to remember that, like other mailing lists, some Internet lists are more up-to-date than others. So you'll want to determine when the lists are updated and how often records are "scrubbed" to eliminate bad names, addresses, etc. Spend the time with the most accurate records for the best results.
This form of sales lead generation provides many ISOs with good, warm leads in that the prospect has used the listing to look up the company's name and has actually called you. However, these ads are costly, so this method usually isn't effective for start-up ISOs.
Green expects to eventually add Yellow pages marketing on a region-by-region basis as his company expands in Texas, then outside the Lone Star state. This method has worked well for ISOs with national scopes, Green adds.
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