[IMGCAP(1)]As a consultant - is it worth your time to pursue Internet leads located throughout the country - or is the effort more than the potential reward?
Consultants who don't attract leads from the Internet want to know the best way to attract more of them with the least amount of effort. They pay handsomely to join lead gathering collaboratives like findaccountingsoftware.com which, for a fee, promise 'exclusive' Web marketing rights to a region.
You need to ask, 'Are the lead gathering collaboratives effective?' 'Do they attract the type of customer that is both profitable and long term?' Or better yet, 'Do they attract tire kickers seeking third bids and low hourly rates where time spent quoting and providing free demonstrations and analysis quickly erases profits?'
To those who obtain leads and close deals - yes - the collaboratives work. One sold deal might pay for several years of membership. Others not as lucky say the collaboratives aren't worth the time and they quickly quit one before moving to another in hope of different results.
Yet there are still other consultants who deal regularly with Web leads and have learned they must invariably send a high percentage of leads away. Why is this? It all comes down to the four most common types of Web leads and knowing which to pursue and which to throw back for other consultants to chase:
- I've got a secret
- I've got a quote already
- I've got no idea
- I want to do business with a consulting firm like yours
All four of these types of leads may turn into highly profitable customers - though the most profitable is generally number four, the others come with some warnings.
I've got a secret -- Recognize this Web lead by their vague responses to your questions. Unlike other leads, "I've got a secret" usually has a decision maker involved in the discussion. In many cases they realize the complexity of their situation, but are hoping you don't. Their secret hope is that you will quote their project significantly less expensively than others have in the past (with 'I've got a secret' bids, the work frequently hoping that the miracle of time makes their project less complex, though they rarely engage).
Characteristics of this type of lead include: they don't know anything about their present system; they are evasive on questions about prior consultants; the contact is a decision maker though often not from the financial department; they are many versions behind on upgrades and technology; they are in a hurry to get a quote; and they can describe many things that didn't work due solely to prior consultants.
I've got a quote already -- If you love to play the low price game you're going to love this type of lead. These folks are looking for second and third bids to take to their boss before signing a contract, which is already 99 percent decided in favor of a preferred vendor.
You can also spot these leads easily because they are in a big rush, often for expensive systems; they have a detailed RFP list; did I mention they're in a big rush?; the main contact can often be a consultant serving as a paid resource to research systems (aka - you're doing their homework for which they're being paid); they are evasive on any questions about existing consulting relationships; and they know all the questions to ask and are not shy about 'picking your brain' on technical issues.
I've got no idea -- As the name of the lead implies - these folks don't know anything about their systems, but usually need some assistance due to a sudden problem such as a system upgrade which has rendered their accounting software unusable.
These types of leads can be the most dangerous because they typically have little or no accounting department; they have systems where nobody knows why certain time consuming manual procedures are done; there are very little internal resources to help implement a system; they place very low value on consulting services; they believe all software should be priced like it was in 1986; the staff has little or no capacity to assist with implementing a new or upgraded system.
I want to do business with a consulting firm like yours -- This generally is one of the best types of Web leads you can run into. These leads are often referrals; people who have seen you or someone from your staff speak; companies who have had one or more negative experiences with a low bid consulting firm; on your company newsletter list and regularly read and use the information you send; or have found your company on the Internet and spent a significant amount of time reading your technical content, signed up for email newsletters and white papers and may return for over half a dozen visits before requesting paid assistance.
What's more, these types of leads close because of a connection and typically stick around for several years versus the other more price-centric customers who are usually one-time engagements.
Is A Lead Gathering Collaborative For You?
To the extent that an Internet lead service (or your own effort) generates relationship type leads versus price shoppers - you will find the lead activities very profitable.
Generating leads that are shopping based on price, in my experience, produces customers who never want services beyond the significantly less profitable one-time project. Lead generation that generates potential customers based on relationships (referrals, subscribing to newsletters, researching multiple times on your website) has a far greater likelihood of producing a customer intent on staying a customer for several years.
If your Internet lead generation is lining you up with five other consultants to bid on work - you're likely going to produce customers that only fit the less profitable profile of a one-off price shopper. And if your Internet lead generation is lining you up with no other consultants and is assisting you in building relationship type leads - you're most likely to produce customers who stay for many profitable years.
Successful consulting is about generating revenues that recur, so ask yourself which type of lead would you prefer. Moreover, ask which type of lead is most likely to produce recurring revenues and focus the majority of your efforts on generating that type of lead.
Wayne Schulz is the founder of Schulz Consulting. He began his career working for two professional service organizations and managing their consulting divisions. He has been active not only with the implementation of Sage 100 ERP software(formerly MAS 90 and MAS 200), but often is engaged to help clients design or evaluate their current accounting procedures.