Here's a surprise. In the IT marketing world, lead generation among new customers and prospects is very difficult. Now, pick yourself up off the floor and lets see if we can understand some of the reasons why. In this and subsequent articles, we will explore the obvious to make it more obvious. We will begin by taking a look at a market in general and explore more in subsequent articles.
On a tactical basis, there are 4 factors that determine the success of a campaign. They are: list, message, timing and media. In other words, you must get the right message to the right person on the right media at the right time. That's it! It's that simple.
In this article, we will begin by taking a look at the market in general. Our background is in marketing and selling technology (IT mostly). Let's start by examining activity levels. Barring external influences, lets assume the life cycle of a large IT purchase is 5 years (60 months). That means that the entire market (100% of the market) will purchase and replace every 5 years. This equates to a touch over 1.5% per month. Now, if we take a look at the potential size of the activity in a near term cycle of say 3 months, we have 4.5% of the available market that close to purchase. So if I'm a reseller, that's the entire available market within 3 months of purchase. Lets ignore the fact that prospects that close to a purchase have likely made up their mind already, so it is probably too late to get a fair shot unless you "buy the business." Putting that aside for the moment, of the 4.5%, 75-80% of that will be split among the top 3 vendors in the market. That means that if you are selling one of those brands, your market is 1/3 of 75% of the 4.5%, or about 1.1%. Of that, if you are a reseller, you are probably battling 2 or 3 other resellers for the same business, reducing the likelihood of success to less than 0.38%. The final variable is that if they are not already your customer, you have to catch the prospect when they are open to change - i.e. when their vendor or reseller is vulnerable which reduces the likelihood of success even further. That may be 1 in 4 orders when they are vulnerable so now the likelihood drops to 0.09%. So, all things being equal, if there are 100 potential opportunities in your market space in the 1-3 month range, the math says that you will get perhaps 2-3 deals. Don' t believe the numbers, use your own, but the numbers get small fast.
TOTAL MARKET * (3*MONTHLY RATE OF SALES) * VENDOR MKT SHARE * PARTNER SHARE* % OPEN TO CHANGE
Pretty scary huh? So the good news is that by understanding this, you can better understand how to set expectations and ultimately address the types of things to do to increase your chances. More on that in subsequent articles where we will examine each of the 4 success factors individually. For a slide illustrating this concept, send a request to email@example.com
George Culbertson is the founder of GAP Marketing Group, a marketing agency focused on IT marketing. GAP Marketing Group was founded by IT sales and marketing executives each with over 20 years of sales and marketing experience.