In his book 80/20 Sales and Marketing, marketing and advertising expert Perry Marshall explains how you can transform your sales and marketing results without extraordinary effort. In this edited excerpt, the author reveals his secret weapon for finding qualified prospects: response lists.
There are basically two kinds of lists:
- Compiled lists: For example, “All the dental offices in the country,” or “All the households in postal code XYZ,” or “All males between ages 31 and 40 in Gauteng.”
- Response lists: For example, “Everyone who subscribed to Black Belt magazine in the past 90 days,” or “People who donated more than R400 to a certain club in the past two years,” or “People who bought items from the Hammacher Schlemmer gadget catalogue.”
Compiled lists are things you know about groups of people, generally based on publicly available information. A compiled list is w-a-a-a-y better than just calling names out of a phone book.
Buy compiled lists
Compiled lists are usually sold. You might pay an amount per name for a compiled list, depending on how sophisticated the information is and how many “selects” you buy. Often you can be very selective:
“I want vice presidents or production managers, and I want companies with more than R40 million in revenue that manufacture automotive parts.” Once you buy a compiled list, you can use the data as long as you want.
The problem with a compiled list is that it’s just a list. It’s way better than no list at all, but a lot of names on that list are very low quality.
Response lists are different. The reason someone is on a response list is because he’s bought something, subscribed to something, donated money, or gone to a trade show.
Response lists are much more valuable than compiled lists. And much more expensive. A response list comes from someone who has already sorted through the world and gotten people to actually raise their hands. That usually means they’ve spent money.
Response lists typically cost quite a bit more than compiled lists per name. In the mailing list world, “hotline” names are sold at a premium price. Hotline names are people who bought or subscribed within the last 90 days. That adds an extra qualification because if they made that purchase recently, it means they’re “in heat” and will probably respond to other, similar offers.
Suppose you have a miserable, cold-calling sales job. The fastest way to make your life easier is to start renting or buying lists so that you’re at least eliminating 90 to 99 per cent of the time wasters.
You’ll discover that when you purchase information like this, you suddenly have a much clearer picture of who you’re talking to and what you need to say to them.
Always start with a list
Whether you’re buying web traffic, making cold calls, sending out emails, mailers or faxes, success starts with your list. If you get a cheap list and then spend all kinds of postage money sending mail to people who’ll never respond, that’s dumb.
Better to spend a few rand per name and mail 500 letters to targeted prospects than get a “deal” paying a few cents per name and mailing 5 000 letters to people who don’t care.
If it costs R1 to mail your letter, here’s how the economics work out. Let’s say a response equals a R100 purchase.
High-quality list: You mail to 500 people and get 30 to respond. R2 per name list rental + R1 postage x 500 = R1 500 cost. Revenue = R3 000, and you make R1 500 gross profit.
Low-quality list: You mail to 5 000 people and get 40 to respond. R0.30 per name list rental + R1 x 5 000 = R6 500 cost. Revenue = R4 000, so you just lost R2 500 before you even covered your product cost. (By the way, I’m making the generous assumption that those same 500 good buyers are mixed in this 5 000-name list. That’s not always the case. Sometimes a low-quality list is pure junk.)
Sales is a disqualification process! The more junk you can eliminate before you spend money and effort, the more effective you are.
Where do you go to find good sales leads? Tell us in the comments section below…