Several years ago a CPA client of mine wanted 20 new clients that year. We came up with a database marketing plan that brought in 10 qualified leads per 1,000 prospects. His closing rate was 10%, so after he snagged his first few clients, we calculated that acquiring new clients cost him $500 to $600. He liked the numbers (one client was worth about $8,000/year), but progress was slow. I advised him to “open the spigot” and contact more than 1,000 at a time. It worked, and he acquired the new clients he was looking for sooner rather than later.

I do quite a bit of public speaking on direct marketing. One question I like to ask my audience is “How large is your database?” I get answers of 100 to 250,000. I worry about companies who don’t have at least 2,500 names in their database. Unless they sell in the high six-figures or have closing rates near 100%, they don’t have enough prospects to meet their numbers.

Database marketing is all about cross-selling existing customers and targeting prospects who are ready to buy now. It’s a numbers game. The more you put in the funnel, the more orders come out the other end. Here’s the formula for calculating how many prospects you need:

Annual projected sales / average order size / sales close percentage rate = required prospects. For example, if you want to achieve a $1 million sales goal, an average order is $1500, and you have a closing rate of 20%, you need at least 3,300 prospects.

If you rely on traditional prospecting, like shoe leather or “smiling and dialing” (networking, clipping “leads” from the paper, cold calling, telemarketing), you won’t get “there” in time! The fastest way to gain clients is to build a big database of qualified prospects. Consider these two shortcuts:

1. Buy a targeted mailing list. Review your top 20 customers and figure out the demographics that make them ideal customers. Then buy lists of prospects with these demographics. There are 60,000 postal and opt-in email lists on the market; use a list broker to recommend the best 3 to 4 that fit your “profile.”

2. Capture targeted leads off the Internet. Rather than cut and paste, use data capture software like ListGrabber which allows you to copy chamber lists, membership lists, yellow pages listings, and e-mail signatures and import them into a spreadsheet or ACT! database to save you hours and hours of tedious data entry.

HP, the printer company, did a study that showed 80% of a buyer’s sales decision is made before he calls you. Consequently, your goal is to make prospects call you, rather than you chasing them. With enough prospects, you can start a drip-marketing campaign to educate and qualify them. Use direct mail letters and postcards to drive prospects to your website, where you can then collect their opt-in email addresses to start e-marketing to them. Build your list and launch a database marketing plan now, and you’ll meet your numbers tomorrow.

Lori Feldman
http://www.articlesbase.com/sales-articles/do-you-have-enough-prospects-to-meet-your-numbers-112348.html