More Leads Isn't The Answer: The Hidden Bottleneck Killing Your Growth [Endless Customers Podcast Ep. 80]

for is because for a lot of folks they look at it and again they say I want more revenue, so I need more leads and That's it's very easy to say that because it's a plus-plus equation of if I get more I make more

Connor
0:02:22
Whereas for a lot of businesses the problems that they're running into are the true outcomes they want. There's different ways to get there. And so as we dig into, and we being Impact's sales team, as we dig into that problem, we wanna understand what's getting in the way

Connor
0:02:39
of you doing that right now? And we try to paint the picture of where are you today? Where are you trying to get to? And let's build that bridge together to figure out how we are gonna get there and what needs to be true to get there.

Connor
0:02:50
And that's what the process and what that conversation typically looks like, especially when they come in and they say, I want more leads.

Alex
0:02:55
Right, well and I'm sure you hear that a lot because that's what I hear on the street too. It's like, we want revenue to grow so we need more sales to come in. It's just like that's the funnel, the equation, and everybody knows that.

Alex
0:03:05
But how do you, it's fascinating the way that you position some of these questions and handle these conversations as you navigate them because you have to get people to understand that that's not actually the root of the problem. And I love that bridge that you were illustrating there

Alex
0:03:17
of how do those conversations go? How do you get somebody to, they think this is the problem, and it might be a lead problem, but how do you get them to go, let's reverse engineer backwards

Alex
0:03:26
from where you actually wanna be and start to paint that picture?

Connor
0:03:29
Yeah, where we always have to start is, what are we doing right now? And so I always start the sales conversations with, let's talk about what we're doing today. What are we doing to generate opportunities? What's our sales process look like?

Connor
0:03:42
Paint that entire picture for me. And or like I like to say, and maybe this is more my mindset is, I wanna build the case for what we need to change right now. So when we dive into what's working right now, what's not working, it's like,

Connor
0:03:57
I wanna know are referrals your greatest asset? Are paid ads your greatest asset? Are you getting a lot of organic opportunities right now? What levers are we pulling in order to understand where we are? So when someone says, I need more qualified leads, I say, let's talk to me about where

Connor
0:04:13
we are today, how many leads are we getting right now? I want them to give me numbers, I want to quantify things. Because that's usually how we're actually going to say, you have 100 leads right now, the outcome you want is more revenue, how many more leads do you need? So if they say we have 100 and we need to be closing 150, we start to dive into, and so what else needs to be true?

Connor
0:04:36
And so we try to not zoom in on, if we could get more leads, we would get more revenue, but it's, I wanna dissect other pieces and find the, well, how much are we closing at? What's our, like, how much are we making per deal? And you wanna paint that whole picture

Connor
0:04:50
so that they see maybe there are other ways. And sometimes there are, sometimes there are not. But the conversation-

Alex
0:04:56
You wouldn't know that unless you have them quantify it and start to define-

Connor
0:04:59
Yeah, and at least paint the picture because it's even things like, how many salespeople do we have? How effective are they? And you start to, the amount of times I have realizations with folks

Connor
0:05:10
that just start saying, oh, well what about, for me it's the, well could it be this conversation, or have you thought about that conversation? And as we keep digging into those,

Connor
0:05:21
that's usually either the light bulb moment, or for teams they say, look, if you're not gonna help me get more leads, I don't really wanna talk. Whether it's the right option or not, sometimes they're dead set on it,

Connor
0:05:31
other times they haven't probably had that reflective moment of, what is working? I don't even know. Some teams know it, some teams don't.

Alex
0:05:39
Yeah, and I know you have this conversation a lot. So you were letting us in a little bit behind the

curtain on an assessment that you have put together to try to help promote some of these conversations and try to dig into these conversations and also to help get you a little bit deeper

Alex
0:05:55
into the conversations before you actually get on a call so you're not having these high-level surface conversations and wasting time and you're getting right into the nitty gritty of what needs to happen. So can we talk about this assessment? Because I think this is the coolest thing going right now.

Connor
0:06:09
Yeah, and you know, it's funny, you hype it up as if it's this crazy thing. The lead generation assessment that I created is not complicated. Frankly, it's just a visualization exercise for teams to realize where are we today

Connor
0:06:24
and where do we want to be. And so when I originally created this assessment, and we'll share it, I'm sure we'll put it on screen or at least put it in the description or something. It's one question, five pieces of data, and then a reflective moment, and that's all it is.

Connor
0:06:40
It shouldn't take more than a couple minutes to fill out, assuming you have the right data. But I originally created it because the conversations I was having with teams was I was writing down all these things in my notes, and I didn't have a great way,

Connor
0:06:53
if I have a first conversation, to show it to someone, to show it to a prospect and say, so here's everything I heard, is that right? And for the times that I've used it with prospects, what usually happens is we fill out this current state, and we'll break it down further,

Connor
0:07:10
but we fill out the current state, and we fill out the data that they need, and then we have a conversation about what's the future state need to look like? And we fill in these two columns, and then we say, so how far is the gap?

Connor
0:07:22
What's the difference? Why are we not where we wanna be? And so not only was it a visualization exercise, but this was something that I'd fill out with them, whether, you know, sometimes I'd fill it out live and I'd be like, hey, as we're doing,

Connor
0:07:34
as you're answering these questions, know that I'm filling this out because I know it's important for you, or I'd fill it out on my own, and I'd say at the end of a call, hey, while we were talking,

Connor
0:07:41
I just started filling out this assessment that I made. It just makes it easier for you to see it. And for a

lot of business owners, that's the realization. That's that light bulb that I was talking about, is when they actually can visualize it, they realize how far off they might be,

Connor
0:07:54
or how close they are, and they identify the actual problem that they're facing.

Alex
0:07:58
No, it's a game changer, and a lot of people learn visually, so they need to be able to see it.

Connor
0:08:01
Right, yeah, and that's what we learned. I was getting that feedback a lot of, it's really great to talk about it, but they don't always remember when they try to recall it, because some people, they need the dashboard in front of them.

Connor
0:08:12
Other folks, they live in the numbers and it's how their brain operates. For me, I like to have it visualized because it always, it grounds me and I'm not gonna be making up numbers, I'm not gonna make up a range,

Connor
0:08:21
I have to have a thing. And that was the goal of the assessment as well.

Alex
0:08:24
The same for me, I'm very visual. I like being able to see the graphs and have it right there at my fingertips so that I can reference it. That's a big part of it. And also, I know I'm pumping it up a little bit,

Alex
0:08:33
but I love how simple it is. I love, like there's beauty in its simplicity and I think that's why I'm so excited about it is because it's not this over complicated like sheet after sheet and filling out huge forms and giving your life away.

Alex
0:08:45
It's like, it's very direct and to the point and it still gets the job done

Connor
0:08:49
in a really clear and succinct way. Right, and I think, you know, as we're gonna dive into it in a moment, like the things that I'll say ahead is the assessment is meant to be in, one, a visual exercise, like I said, number two, it's not supposed to solve anything. It's very much just supposed to say,

Connor
0:09:07
here's where you are, here's where you wanna be. You're supposed to figure out what the solution

is and bridge those together, but it's very much designed to be very simple and easy to fill out, so that someone can say, I now understand my problem. Like, at the end, if there's one sentence, statement,

Connor
0:09:24
that I would say this assessment's their goal is, the goal of this assessment is to say, I understand what my problem is now, now I've gotta figure out how to solve it. That's all it's designed to do, but it's not trying to be more than it is.

Connor
0:09:36
It's just trying to be simple and easy and straightforward. No, but there's a lot of times where we think we know what the problem is as business owners or we're in the company and we think like this is it. And then sometimes when you step back and you get another perspective, you realize that maybe that is one of the problems, but like there are other things going on that contribute to this that we need to identify.

Connor
0:09:54
And that's the first step in the program, right? You got to admit there's a problem. You got to see what it is and identify it. Yeah, big time. Big time.

Alex
0:10:02
So can we go through this assessment?

Connor
0:10:03
Yeah, let's break it down. And again, we'll visualize it in some way, shape, or form. Or I'll leave a link for you to download it. Again, it's a PDF document. It's not a super complicated thing. But here, and again, this is something

Connor
0:10:14
where as we're explaining it, if you make your own, awesome. Just send it our way. I'd love to see it too. So it starts with a simple question of on a scale of 1 to 10, how satisfied are you with your current lead gen efforts?

Connor
0:10:27
This is a question that I like to ask folks or I'll just have them fill it out themselves. And the goal is if they say one, we're super unsatisfied, we're gonna quantify what that means. If they say 10 and they're super satisfied, we're gonna quantify what that means too.

Connor
0:10:40
But I just like to get more of an emotional, you know, how do you feel it's going? And then we're gonna figure out if the data matches how you're feeling. What usually happens with this, and I'm jumping ahead a little bit,

Connor 0:10:50

is we fill out all the numbers, and they realize that maybe they gave their score a little too high, or maybe it's doing better than they thought. But usually their gut reaction isn't always the same as the data.

Connor
0:11:01
So speaking of the data, after the satisfaction question of a one to 10 scale, we jump into what I call the future state and the current state columns. So on the left-hand side, there's the current state, where we ask for five pieces of data.

Connor
0:11:14
Monthly leads, annual leads, the close rate, your average deal size, and the length of the sales cycle. And so when we're diving into the current state, the reason we have those five, because you could fill these in with different things, and this is where I think it's flexible

Connor
0:11:28
for any listener to say, I'm gonna make my own. You might have different KPIs than this. The reason that we track these five is monthly leads is a great testament to how many people are coming in on a regular basis. And that should be on average, how many monthly leads.

Connor
0:11:42
We do annual leads because sometimes there's businesses that have seasonality, or there's businesses where they have a busy season, and then they have, you know, they might taper off for a bit. We wanna know how many total leads are you gathering in a given 12-month period,

Connor
0:11:54
because it may not be even month to month, but we like to get the average too. The close rate, we wanna know how effective is your sales team with the leads that are coming in right now. Then we go to average deal size.

Connor
0:12:04
Are we closing the right people that are making us enough revenue? And this is something like, our team looks at it for our size of like, do we know what the average deal size is for an impact opportunity that comes in?

Connor
0:12:16
And who closes? And are we closing more of the right people or not? And then the last one is the length of the sales cycle. If, let's say on average it takes 45 days to close a deal. Then we fill out the future state. And the future state's more of a wish list,

Connor
0:12:30
but it can also act as a goal list of, I would like to get here. And so as we fill it out, it's more, let's figure out what the difference is. Let's say we have 50 monthly leads today, and we'd like to be at 75.

Connor

0:12:43
We're gonna just put 75. For annual leads, you do that times 12. For the close rate, let's say we're at a 10% close rate. We'd like to be at 15 or 20%. Nice sense.

6 0:12:51 What's...

Connor
0:12:52
Well, I'm sure too, well, sorry to interject, I love how this is laid out. And as I'm looking at it here, it also seems like if you're looking at your current lead flow, like my monthly leads right now is at 50. And I want to go to 150.

Connor
0:13:03
You can clearly see like that's a big jump. And maybe we should start at 75 or 100. And I'm sure it helps to have some of these conversations that keeps people in a more realistic realm instead of in these crazy lofty up in the cloud sort of ideas. Yeah, it brings them back to earth.

Connor
0:13:17
And the future column, the reason it's the same exact thing is it forces them to reflect on what the actual problem might be, because they might say, and I've got some examples we'll talk about, but they might say that the monthly leads is, they might realize monthly leads is fine,

Connor
0:13:33
but if we're closing at such a low rate, we gotta fix the close rate, and we've got a different problem that we gotta solve, and is that realization? After they fill out the current state and future state, I have reasons people don't buy from you,

Connor
0:13:45
and there's a few that we always see. There's price, there's bad fit, and there's competition, are three big ones. Are we too expensive, or is the price out of range for the people we're talking to? Are we just not the right fit,

Connor
0:13:57
where they were probably never gonna buy from you anyway, or are we the right fit, and we're just losing out to competition, where maybe we have competitive rates and for whatever reason they're picking them, or other, where if you select the other column,

Connor
0:14:08
it's like what are other factors? And that's more to document why do we lose a lot of opportunities? And what I would challenge folks to do is if you can break it down into a pie chart of what are the main reasons and how often

Connor
0:14:19
are we losing based on these things, you can start to identify why opportunities aren't closing with

you. And then we have the notes or the actions to take. This is more of the observation. So this is for me when I'm filling this out

Connor
0:14:30
with a prospect, I fill this out to say what are the things I'm hearing and seeing from them and what are the actions that they're saying. So as people fill this out, I'll take you through a couple of examples that come to mind. And I won't take too long to dig into them,

Connor
0:14:45
but there's some that had very interesting realizations as we filled out this exercise. So, mainly focusing on the current state and the future state, because that's the bulk of this assessment. So as they're filling it out,

Connor
0:14:57
the satisfaction question is, again, a gut check. There's not a lot of information I need to take from it. It's more just to know how they're feeling. And it's fun when you have multiple people filling this out. Like, I'll ask, so there's a team.

Connor
0:15:09
This team does recruiting for the energy space, whether it's people to work on oil fields or in solar or different energy areas. But specialized staff. Yeah, specialized staff. Right, right, right.

Connor
0:15:23
That's a good way of putting it. So when I had them filling this out, I asked the question, how satisfied are you? And one of them said, I'm at a seven. And the other said, they're at a four. And so now you have a little bit of a discrepancy.

Connor
0:15:34
It's not one to 10, but it's like, there's a little bit of a difference there, let's talk about that. That's where I start taking notes. Then we do the current state, future state. And so the current state, and I'm gonna use easy numbers, was in a given month they're generating 100 leads.

Connor
0:15:48
And annually, let's call it 1,200, just for easy numbers. Their close rate was 5%, which that was the first, like, wave the red flag, hang on a second, that's probably not what it needs to be. And then we did average deal size, and they said, let's call it about 20,000, easy numbers.

Connor
0:16:05
And then the length of the sales cycle was somewhere in the three to six month range. So we're gonna call it 90 to 180 days. So he filled out the current state. Then we talked about the future state. After going through that current state

Connor
0:16:17
and having a bit of a conversation, they said, future, monthly and annual leads need to stay the

same. If we took on more opportunities, it would just be more clutter based on what they're finding.

Connor
0:16:27
What they said is if we could get the close rate from five to 8%, we're multiplying what the business can be. It's like they said eight to 10% over the next year. If we shifted that much, that's a ton of business. And then they said if the average deal size could be 50,000 instead of 20,000,

Connor
0:16:43
that's a $30,000 swing per deal. Like that's huge. And then the length of the sale cycle, they said, look, it would be great if it was 90 days, or if it was less than 90 days, but usually that's just the way that these things work,

Connor
0:16:54
it takes a little bit of time. So they filled all that out. And the two big takeaways were close rates and deal size.

5
0:17:00 Right, right.

Connor
0:17:01
And so for them, they had the real, because they came to us, same thing, of we would like to have more leads, and frankly, more qualified leads. Like, we want better leads. And so as they were going through,

Connor
0:17:11
they realized, maybe it's not a leads problem as much as it is a close rate problem or a deal like we're closing more of the wrong people versus our ideal fits. And yes, there's the conversation of we need more qualified leads, which is great.

Connor
0:17:25
But they agreed if we got 600 leads instead of 1,000 or 1,200 and more of them were qualified and we were closing at the 10% rate, I would love to have less leads and better leads than more leads who aren't worth our time and rather be optimizing it.

Connor
0:17:41
And so we immediately identified what the actual problems might be. And not only does that build trust of like, okay, personally, it feels good when you can be like, hey, this is the actual problem you wanna solve, and they say, yes, I wanna solve that problem.

Connor
0:17:54
But as they filled it out, they then realized the reasons people don't buy from them is because they have too many bad fits. So they looked at it and they said, price is pretty competitive, there isn't a ton of competition we always lose out to,

Connor
0:18:05
but there are a lot of bad fits who would never buy from us anyway. Which again, comes back to, no wonder we're closing so low, we're talking to too many people who aren't a good fit, and frankly, and they were pretty honest, and they were like, and our sales team

Connor
0:18:17
could be a lot better.

Alex
0:18:18
So they looked at it. That combination of not the greatest quality leads and the sales team struggling, that contributes to the pain that they're feeling,

Connor
0:18:26
it sounds like. And so you can imagine the notes and the action items that we had as we're filling it out, it became pretty self-explanatory. We have a close rate and deal size problem. We're not closing enough of the right fit people,

Connor
0:18:37
and we are not closing the deal size that we should be. So that's one example. But then there's the other example, so there's this training company up in Canada. They train people on how to utilize construction equipment, like big riggers

Connor
0:18:54
and the diggers and all these things. And so we were going through the same exercise. And I was filling it out on the side, but for them, they have to have about 80 conversations to get 40 applications to join their class, to get about 10 people to join.

Connor
0:19:13
So for them, they're looking at monthly leads, let's call it, they have to have 80 conversations in a given month to fill a class. And then annually you do that, it's like what, seven, no. Closing in on like a thousand conversations that they have to have to get them in.

Connor
0:19:27
Then the close rate is pretty low, it's like one out of eight, maybe, will actually go with them. The average deal size is what it will be, and then their length of sale was the one that really stood out to them.

Connor
0:19:39
They said, it takes us somewhere between six and 12 months usually to get someone to close. And they were like, if we could get them in 30 days, it would save me the effort of having to nurture them all day, and it would just give me so much time back where I can focus on fulfilling the classes

Connor 0:19:54

and doing these other things.

Alex
0:19:55
And it was like, meaningful work instead of the busy work of like, oh, I have to set a reminder because I have to follow back up.

Connor
0:19:59
And think about this, so for them, what they looked at is the reasons people don't buy from them is either price, where people aren't educated on the price, or competition. Because they have, there's one other person that competes with them that does similar services, and they're slightly less expensive, but also they're much more efficient. And so for them, their biggest gap that they went through between the current state and future state

Connor
0:20:20
was that length of sales cycle, where they said, it's taking too much time for us to close the right people. So we're spending so much time, because think about those 80 conversations. Let's say 20 of them aren't a fit right now, but they could be later. Those compound over the course of, call it a year.

Connor
0:20:37
That's 240 additional people you've gotta be nurturing on top of trying to get that 80 every single month. You're playing this length of sales cycle game that's taking so much time and energy where you're not being as efficient because you're not generating enough of the leads

Connor
0:20:52
that are ready to buy from you now. Again, we identified that because it wasn't that they need more, frankly they need less, but they need more educated, more qualified. So that's the goal of this assessment again, is to identify these things.

Connor 0:21:02 There's frankly, people,

always gonna be businesses that truly need more leads. There's a lot of them out there and it's always gonna be part of the puzzle. If you want more leads, you want more of the right but if you have the right folks coming in at a decent rate,

Connor
0:21:14
and you identify these other issues, you tackle those right away. You don't have to worry about a long-term lead generation flow. You can just worry about, I can control my sales team more than I can control the macro marketing world, where it's changing rapidly with AI and a lot of what you guys talk

Connor
0:21:31
on the podcast. It's more focused on, what can I control in-house right now? Pretty much the bottom three are things that you have more control over, whether you are addressing it that way or not.

Alex

0:21:41
That makes sense. So once they work through this assessment, they identify the problems, they start to work the plan to mitigate these problems.

4 0:21:49 Yep.

Connor
0:21:50
Should they be revisiting this? Or is there some type of cycle where like every quarter, every like bi-annually, we keep looking at this thing to make sure we're staying on target? I think what this document should act as is a baseline for where you are right now, and it should identify what your first point of attack should be. That's the goal of this whole document is identify what the problem is right now. You focus on that for, call it, 90 days. Let's call it the three-month cycle.

Connor
0:22:19
And then every quarter, you can revisit it and say, did we make progress towards our goal? If you keep attacking these, this is just a way to simplify the things that you need to focus on. Again, you can swap out these KPIs. These are five great ones that I think are valuable. Call it four to five with the monthly and annual leads. But if you attack one of these at a time, you will see progress.

Connor
0:22:38
And over time, you should be saying, how can I keep improving these every single quarter? And address the ones that are the biggest headaches. And sometimes it's going to be you want to make a 1%, 2% increase. But if you can say over the next 90 days, my main objective is to shorten the length of our sales cycle, and you focus on saying,

Connor
0:22:55
we're gonna close it by 10 days, that's a massive difference for your business, because instead of it taking 90 days, now it takes 80, you can get a little more revenue and you build the momentum, I think you should be visiting it every quarter if you can.

Alex
0:23:06
That makes sense, and who should be in the room for these conversations, like is it the CEO and the head of sales, or like what's the mix of people that you'd wanna get their opinion on this?

Connor
0:23:15
I think that it should be, it'll be a little bit dependent on the business, but I feel that marketing, sales, and a member of leadership should move forward. I think this assessment is easy enough where you should have the right,

Connor
0:23:29
you should have a sales leader, a marketing leader, and probably an executive in the room who all fill this out because the satisfaction question is gonna be different for each of them, but they all contribute in different ways. Like this is where focus and prioritization is key.

Connor
0:23:42
Is if you recognize that you need more monthly leads, guess who controls that? Your marketing team. And so they need to be involved, but if you say the close rate needs to improve, we need to look at how the sales team is leveraging the deals you have, or the length of sales cycle, same deal. But all of these have a sales and marketing, call it seesaw effect of balance of if

Connor
0:24:02
Marketing is generating a bunch of garbage leads That's not helpful because the sales team all these metrics are gonna be worse because the sales team can't close But the sales team isn't effective The marketing team's got to make it easier to get more qualified people in so you have to find the balance and you have to Find the ways like the gaps that are being exposed again. This document is not going to give you the solutions It's just going to identify problems for you right your job is to take this data and say,

Connor
0:24:25
okay, how do we attack this first? That's all it can do, and again, to have sales and marketing and executive leadership all in the same room, we all just have to agree we have the same problem. If they all show up in a room and say,

Connor
0:24:38
yes, we collectively agree, this is the thing we're gonna tackle, then you figure out the how. The how is kind of the fun part. The problem is when everyone says, gosh, darn it, I don't, we have to fix this.

Connor
0:24:49
When you start to actually get into the alignment of, we're all aligned on what we're gonna do, now how do we do it? Everyone works together, and you will see those metrics go up.

Alex
0:24:57
The alignment is key. It really is, because if you start solving for a problem that you think you have, and it actually isn't the problem, you're gonna do all this work.

Alex
0:25:04
For something that really isn't. So this is step one.

Connor
0:25:07
That's the key, man. Ground zero. Everyone's gotta be, everyone has to collectively agree this is the problem we need to solve. And then you can say,

Connor
0:25:13
the how is the easy part, when you all actually agree on what the problem is and a lot of businesses run into that of they don't, they don't agree on what the problem is and there's usually more than one problem,

Connor

0:25:23
but they don't agree on the problem they're gonna aim to solve and so once they do, it makes it very easy for them to say, okay, now here's how we're gonna do it. Yeah, that's well said.

Alex
0:25:32
All right, favorite part of the show, it's the one thing time. I feel like we need to get a music track for this part. I mean, like, the one thing. What would you say for people listening and watching right now, that if they're watching this,

Alex
0:25:43
they're picking up what you're putting down, they like the assessment idea, maybe they wanna customize it for their own business, industry, whatever the case may be. What's the one thing they should take away? Build the business case.

Connor
0:25:54
Build the whole business case. You need to know how your business is operating across the board, and again, you need to see these metrics and be able to paint the whole picture. Again, I use build the whole business case. Know all the components of what's working and what's not

Connor
0:26:13
when it comes to lead generation. Be able to identify those problems, and then you're gonna know how to actually solve them. Don't go with the surface level or the easy answer. Make sure that you can confidently say, with data and insights,

Connor
0:26:27
what is working, what's in good shape, what's not in good shape, so that you can address it head on.

Alex
0:26:32
Love it, absolutely love it. Connor, thank you so much for being on the show

Connor
0:26:35
and sharing your insights, this has been a great talk. You got it, Alex. I hope everyone enjoys the assessment too. It takes five minutes to fill out, but it can make a world of a difference, especially heading into next year too.

Alex
0:26:43
Definitely, we're gonna drop the link to this so that people can download it, check it out, do it for yourself, for your own business, see how it works, and give us some feedback. Drop some comments, go ahead.

Connor
0:26:52
Yeah, I'd love to know what people think. You know, if it's missing things, this is as easy of a PDF document to create, but it's one of those things where I'd love to know how you use it, if there's other

areas you look into. It's a living, breathing document,

Connor
0:27:04
and hopefully it works for you guys, too. Love it. Thanks for being on the show.

Alex
0:27:07
Got it. All right, for everybody out there watching and listening, this is Endless Customers. I'm your host, Alex Winter.

0:27:11
See you on the next one.