Qualified leads maximize sales efforts and company success
Analyzing and measuring leads helps companies define what projects are worth tracking, allowing them to place their resources in the right places and prioritize their work. This results in saved time, money and resources.
Art Hance, president of Washington, N.J.-based Hance Construction Inc., acknowledges the trope: “You cannot manage what you can’t measure.” As his company has grown, and as both the construction market and economy have presented new challenges, he has found it increasingly important to manage the leads his company pursues. “If you are not tracking your leads and using them as an early indicator of potential future work, you have no way of knowing what your outlook is and when to make proactive rather than reactive business decisions,” he says. “Maximizing our sales efforts has become critical to our success.”
Measuring and analyzing leads lets Gilbane Building Co., Phoenix, better focus where and how it spends its time and efforts. “It allows us to have a fairly detailed go/no-go process internally in terms of the opportunities we chase and spend money on,” says Dennis Cornick, Gilbane’s executive vice president and national director of sales and marketing. “It lets us be more efficient and productive at the end of the day.” Measuring and analyzing leads helps monitor the effectiveness of salespeople. “I can pull up a report at any given time and see a salesperson’s leads for the next 12 months,” Cornick says. “Does she or he have enough in the funnel relevant to what we think our activity level should be for their success?”
Khary Penebaker, president of Roofed Right America LLC, a roofing contractor based in Milwaukee, compares failing to measure, track and analyze business leads and efforts to trying to put a roof on without having measured it first. “It’s just not the best way to conduct business,” he cautions. “You may think a radio campaign on a specific radio station is generating a ton of leads, but without analyzing and tracking the results from the leads that campaign generates, you may be throwing good money after bad. You may be a social media fan (like me) and think that Facebook ads are a good idea. But if you aren’t able to track that campaign, you won’t be able to determine if you should continue to use that medium or if you are spending enough.”
Leads can come from many different sources. “With constantly evolving technology, we receive lead opportunities electronically, by phone and even still by fax, which requires a significant amount of time and resources for our estimating, sales and business development departments,” says Chad McLeish, vice president of estimating, Kalkreuth Roofing & Sheet Metal Inc., Wheeling W.Va. “It is an absolute requirement to analyze these leads due to the sheer volume and variety. We utilize regional Builders Exchanges and various online services, such as Grade Beam, to serve as a constant communication network between us and potential or existing customers.”
Some leads are better than others. At Roofed Right America the majority of its leads (and revenue) come from repeat customers, which Penebaker feels is the least expensive type of lead. “I believe that a company’s work should earn new business by way of referral, especially when a customer is supremely satisfied with the completed work,” he says. “I think using completed work to sell future work is one of the best ways to generate new business and revenue from leads. It’s like your resume, but one that is tangible and that can’t be fluffed.”
George Hedley, Metal Construction News columnist, licensed professional business coach and author of “Get Your Business to Work!,” agrees that the best leads come not only from repeat customers, but also referrals. “Set up a customer tracking system to make sure you stay in touch with past customers at least three times per year via postcard mailings, email newsletters, annual building inspections, invitations to ball games, golf tournaments, or buying a table at industry or charity events and taking them with you.”
The Internet has evolved into an invaluable tool to attract and evaluate leads. “It is vital to be flexible as industry technology rapidly changes and develops,” McLeish says. Miami-based Lemartec Engineering & Construction utilizes the Internet as an enlarged window of opportunity to attract an audience and obtain leads. According to Carolina Correa, business development coordinator at Lemartec, it provides engaging campaigns, targeted advertisements and dynamic social media. “The channels are endless and it is precisely the Internet that has facilitated the tracking of content views, shares, likes and other metrics that help determine the value of said channels,” she says.
Track and Evaluate
Regardless of where leads come from-referrals, ads, websites, tradeshows, associations-companies should track them to optimize them. Hedley recommends that when a lead comes into the office, have a lead form to use with boxes indicating the source of the lead. He feels this will help determine how your marketing and sales efforts are working. Next, track your bid or proposal win-or-hit ratio. Track your success by:
• Job type (residential/commercial/ warehouse/etc.)
• Job size, location, contract type (lump sum/ design-build/etc.)
• Customer type (general contractor/developer/ government/direct customer/etc.)
Roofed Right America uses a cloud-based package that allows it to track leads and revenue opportunities in real time. The package lets it remain in control of its sales workflows, so that it can minimize customers that fall through the cracks. “It also allows us to analyze our close-and-loss ratios as well as track who we win and lose against,” says Penebaker. “We are able to measure some very key metrics with our platform.”
These Roofed Right America’s key metrics are:
• Win/loss ratios (general)
• Win/loss ratios (specific to competition)
• Lead turnover time
• Proposal delivery time
• Conversion ratios (wins and losses)
• Sales force performance
• Lead source performance (this one is important from a marketing budget perspective, as it allows the company to determine which marketing campaign is a success or failure).
Hance Construction assigns a dollar value to leads when they come in and then uses a weighted average based on one of three categories they fall into based on where the company is in the sales cycle and what it feels its chances are. “The three categories are leads, jobs quoted and jobs quoted where owner has indicated we will get it when X, Y and Z happens such as approvals or funding,” Hance says. “This is a work-in-process and once we have compiled sufficient data and adjusted our criteria we expect to be able to judge how our sales funnel is doing based on the value of projected opportunity.”
Conducting a poor go/no-go analysis or no analysis at all on the leads entering your sales pipeline will increase unfocused efforts and unrealistic expectations among your executives and employees. Also, leads need to be measured for their ability to close, not just simple quantity, or early-stage conversions like lead-to-follow up or lead-to-meeting.
For example, “If one campaign is generating loads of leads, but with a low-closure rate, and a second campaign has a high-closure rate, then evidently we should double down on the second and cancel the first,” says Hugh Macfalane, founder and CEO of MathMarketing, Melbourne, Australia. “That assumes though that the failures can’t be fixed. Clearly, if we can improve the conversion from stage to stage of a campaign, we might resuscitate it. The conversation around lead effectiveness needs to be had with both sales and marketing in the room. Improvements that only one side buys into are not going to stick.”
At Raymond, N.H.-based Jewett Construction Co. Inc., measuring and analyzing leads helps it prioritize its work based on the greatest potential of each. “If the lead is serious and fits our capabilities, we place it in a database and track the lead correspondence,” Craig Jewett, president of Jewett Construction, says. “We prioritize leads based on how they come into our office and the seriousness of the intention to move a project forward in regard to timing, budget and scope. We meet internally every two weeks as a group to go over our business development leads, both new and ongoing, to discuss their current potential. This ongoing conversation means that we are always measuring and reanalyzing. The quality of our work is such that we receive a large portion of our leads via word-of-mouth and repeat clients, allowing for the bulk of our leads to be considered extremely viable.”
For help measuring leads, Lemartec actively participates in and supports a learning, collaborative environment among architecture, engineering and construction (AEC) companies, including the Society for Marketing Professional Services (SMPS) and Design Build Institute of America (DBIA). “We have found tremendous benefit from engaging our marketing and sales workforce in these organizations, so they can measure and analyze leads more effectively,” Correa says. “Additionally, we rely on specific industry reports that help us identify potential opportunities years in advance, key to our relationship-building objectives.”
Gilbane Building uses a customer relationship management (CRM) system structured on a multitier, multi-level basis to track its sales leads. From that, “We look at opportunities by market segment like health care, higher education and corporate,” Cornick says. “We look at opportunities by geography, by client, by project volume, by prospective profit, by delivery method, by design-build and also by risk. From this breakdown, we look at the leads from that perspective to gauge whether or not we see any trends like gaps or overloading in areas.”
Hedley advises pre-qualifying every lead and cautions against wasting time chasing leads with a slim chance of making a good profit. “Always ask potential customers if they have the money to build the new project, when they want to start, what other contractors they are getting proposals from, and if they will pay you for your preliminary design or pre-construction services,” he says. “If the answers don’t add up, they are only shopping for a cheap price or planning to use their buddy to build the project. Waiting for leads will not make you rich. Going out and finding customers who want what you offer will allow your company to grow and make more money.”
Sidebar: Handling Leads
Sometimes when contractors see a lead, they may not recognize it as such. Set up a mechanism for the intake of a lead. This could include such information as contact information, phone numbers, names; and a list of questions like how did you hear about us and what are your goals. This needs to be clearly defined on lead intake. Only if you probe do you define what their need basis is.
You want to measure how quickly you can get to talk to a lead source and provide a stream of information and influence over a period of time. This should be rated in a number of different ways. What is the intensity of interest? What was the amount of time of their initial phone call? What would you like a contractor to perform for you? What are you looking for in a contractor? What ancillary services do you require? If they can answer those questions you have intensified the value of that prospect in terms of the lead. Once this information is established, you can measure the degree of information you have about the lead.
Dave Yoho, president, Dave Yoho Associates, Fairfax, Va.