Scored Leads Strategy vs. "Shotgunning"

I recently had a conversation with a sales/marketing executive about realistic conversion expectations of leads.  I suggested that scoring the leads that he purchased, then focusing only on the leads with the highest propensity to purchase would dramatically improve conversion rates and reduce the resources used.

His reply was something that we often hear from people in sales that have never used lead scoring:

"Thanks for the insight, appreciate your time, 1 question, with the bottom rung leads, wouldn't it be more effective if perhaps you had an intern or even an admin person do a quick call or email to them?

I believe in all opportunities, and i believe that small opportunities will almost certainly lead to bigger ones. However your point is valid considering the market your targeting, but i would still personally dedicate an intern to briefly contact those leads as well or send out a mass mailing. I mean the wider you spread the net, the more fish you can potentially catch right? :)"

Often times people in sales believe that the best ROI comes from casting the widest net, also known as "shotgunning"; or contacting everyone in a specific zip code, for example, without any analysis around their likelihood to purchase your product or service.  My response to the sales/marketing executive was as follows:

Thanks for your question and your point is taken, particularly with unlimited resources or email blasts where the costs are nominal; sure contact everyone. However, when the cost per contact is high (e.g., inside or outside salesperson, a few dollars per mailer, etc.), why take the time to track those with a very low propensity to purchase when you can put those resources into several other, far more effective campaigns?

To give you an example: 10,000 names yields 10% sales or 1000 sales. Contact all 10,000 and you will achieve 1000 sales. Using a propensity to purchase algorithm you can expect 770 sales by contacting just 2000 highest scoring prospects. By the time you spend contacting (and recontacting) all 10,000 prospects to get your 1000 sales, your competitors are on their fifth campaign driving in 3,850 sales (770/campaign x 5 campaigns). 1000 sales vs. 3,850 sales is the simple math with the same resources (less the cost of 4 more lists and data for those lists using the propensity to purchase methodology).

Pilot test it--you have nothing to lose and an 385% better ROI potential!

 Without looking at the numbers or into future campaigns people often think that it is best to just contact everyone, but when you take the time to plan out your next campaign and see how far ahead you will be when you apply a little analysis to your list of leads, it is clear that a little analysis goes a long way!

For more information about propensity to purchase analysis (lead scoring) call 877-437-8622 or email me directly at James@StatisticsSolutions.com.