Deal Source RISK
All sales leads aren’t created equally
Where a deal came from is a really important question to ask. It gives a strong clue as to the strength of the opportunity. There are many, many sources of opportunities that fundamentally fall into three categories:
- inbound (the prospect contacted you directly);
- outbound (where you reached out);
- referral ( where a trusted person or company referred the business to you).
Each of these has its merits, depending not just on the source, but who the contact is.
Referrals are typically the best source of deals. This is from a trusted adviser to the company or somebody who has good knowledge about you and the prospect. It typically allows you a strong position to pitch your value.
Outbound, on the other hand, can be weaker because the prospect is not necessarily “in market” at the time you contacted them and you need to sell more of the who are you as part of the proposition. That said, sometimes outbound can produce strong leads because you have uncovered somebody who is “in market” at the time, perhaps talking to a competitor and you can intercept the buying cycle at a later stage and consequently reduce the sales cycle time.
Inbound is a mixed bag, depending on who contacts you, why they contacted you, etc. but a good prospect coming inbound who has researched your company’s proposition, has taken the time to understand your value, and is in a position to influence purchasing decisions can be a very strong source of opportunity.
So in summary, it’s always important to know where the deal came from to help understand and contextualize what is going on.
Amplifying Factors Industry Location
RED – Outbound Generally the weakest of the three deal sources because you initiated the contact and there may be neither a compelling reason to buy or budget availability to conclude business with you. You may find you contacted somebody who wants your product, but does not have a need for your product. |
AMBER – Inbound Inbound from the right person is often good as they have researched the market, understand something about your company from your website, product reviews, etc., and typically are in a buying frame of mind. They usually have a problem that needs to be addressed. The timescale may not align because they may be doing research for purchase in the distant future. |
GREEN – Referral Referrals are usually the strongest source of business of the three channels. The person referring is typically aware of issues within the prospect that makes your product a good fit. |
Mitigation – what to do?
Make sure you have a healthy balance of inbound and outbound and referrals within your business. As a rule of thumb inbound tends to take longer, requiring more presales nurturing than outbound or referrals, so investing in inbound will produce pipeline in the future while referrals and outbound quicker producing pipeline.
Encourage likely influencers to refer business to you. Frequently, people forget to ask existing customers and influences that they meet to refer business so run an active campaign to meet people for coffee, pick up the phone and just ask for referrals. This will pay dividends.
Get to learn the dynamics of opportunities that come through your three main channels. Often people get confused and muddled between the different sources so bucket them into these three categories and analysis will become clearer and simpler. Make sure you analyse not just business you won but also what you lost as well so that you get a holistic picture of the merits of each of the deal sources.