Clicks 'n Conversions Blog

This article was first published July 20, 2007 on the Tatum Marketing blog

Here’s a fact that sometimes surprises our new clients, but we find it to be true over and over again.

75% (or more) of your best prospects are not ready to buy right now. 25% aren’t even ready to give you the time of day. Most of the people who inquire about your product or service will eventually buy from someone, but it won’t be you unless you keep nurturing the relationship.

B2B marketers tend to focus on the top of the marketing funnel – pouring new leads to put into the system – and the bottom of the funnel – the sale. If prospects aren’t ready to buy right now, they are abandoned. This is a sad waste.

Here’s an example of what happens all too often. TC International, an IT consulting firm (name changed for obvious reasons), ran a carefully crafted direct mail campaign to generate attention among corporate CFOs. The mailer offered a free report by a well-known industry analyst detailing a shift in IT services and service purchasing, and listing this IT firm as one of the leaders in the industry.

Nearly 500 people responded to the offer and requested a copy of the report. The sales team followed up by telephone and found that around 90 of them were considering purchasing IT service within the next 6 months. As was their job, the sales team pursued those “hot” opportunities. The marketing group moved on to the next campaign to generate new leads. Unfortunately, 410 interested potential buyers were left sitting in the database.

To understand the significance of this, let’s superimpose this example over a simplified version of TC International’s marketing funnel. Think of the funnel as four buckets and the job of the marketing and sales groups to move prospects from one bucket to the next with each bucket bringing the prospect closer to becoming a customer.

Bucket #1 is Suspects. These are people who could become TC International’s customers – they hold the right positions at the right organizations – but the firm has no idea yet whether or not they have a need for or interest in their services. The people on the original mailing list were Suspects.

Once a person shows some interest in TC International or its services, by requesting additional information, visiting a web site or, in this example, responding to the mailer, they move to Bucket 2 – Inquiries. The people in the Inquiries bucket are more valuable to TC International because they’ve shown some interest and willingness to engage in the company’s marketing. The 500 people who accessed the analyst’s report became Inquiries.

Bucket 3 we’ll call Leads. These are people who have moved even further along the spectrum toward a purchase. They’ve admitted a need. They have a budget. They’re going to buy from someone. Those are the 90 “hot” opportunities that the sales team uncovered.

Bucket 4 contains the people who actually become Customers.

Clearly, the people in the buckets get more valuable to TC International (and you) as they move from a low bucket number to a higher one. The company invested substantial dollars to move 500 people from the Suspects bucket to the Inquiries bucket only to abandon 410 of them who were not ready to buy at that moment.

Not only does this significantly raise the cost-per-lead for the campaign, it also dramatically lowers its effectiveness. Research shows that, on average, 90% of those 410 abandoned inquiries will eventually buy a similar product service. But they’re going to buy from a company that stays in touch.

Given the reality of today’s buying process, your marketing program would be much more effective if attention is paid to nurturing those potential buyers who have already shown interest. And the beautiful thing is, that doesn’t cost nearly as much as generating another 500 inquiries. In the case of TC International, the company was actually able to lower its overall marketing costs while increasing the number of prospects in the leads bucket. It also, interestingly enough, increased its sales.