At many home improvement companies, where lead costs are running $200 and more, getting salespeople to generate their own leads is a battle worth fighting. Self-generated leads drive down marketing costs and add to bottom line profits.
Learn to Ask At Vinyl Designs in North Highlands, Calif., self-generated leads now account for 12% of sales (up from virtually nothing a few years ago). The way president Stephen Kuhlke sees it, “If a salesperson is only doing leads we supply, he's only doing half the work.”
Not long ago, Vinyl Designs mostly relied on telemarketing to generate new business. In 2002, for instance, the company had almost no leads from referrals. So Kuhlke set out to increase repeat, referral, and self-generated leads by making lead solicitation integral to every facet of the business. “Asking for referrals is something we do throughout [the customer relationship],” Kuhlke says. “We ask for referrals every time we contact that customer for any reason.”
To nudge salespeople, the company runs contests, posting scores on a board in the sales room. “If you sell a deal with my lead, you get one point,” Kuhlke says. “If you sell it with your own lead, you get two points.”
Providing at least as much motivation is the extra 8% commission a salesperson gets for self-generated leads that become sales. “When a guy gets an extra 8%, is not asking for a draw, and has good cash flow, he's more confident,” Kuhlke says. “It gets him rolling and more likely to sell.” While some still go out strictly on house leads, many salespeople now generate about 30% of their own.
Pride and Pocket Book Buffalo, N.Y.-based Braymiller Builders also spurs salespeople to generate their own leads. The carrot is an extra 5% commission. The stick? The company calls all its previous customers during November and December, and if a lead comes from one of those calls, that's one less for the salesperson. “If the guys get to them before we do, good for them,” president David Braymiller says. By the same token, if a customer calls offering a referral, the salesperson doesn't get the extra commission on that lead.
In Indianapolis, Unique Window & Door is taking a new approach to boost self-generated leads. The company tried decreasing bonuses by 15% unless self-generated leads made up a certain percentage of a salesperson's sales — and increasing bonuses by 15% if salespeople hit the mark. That didn't work. Now, if salespeople don't visit 90% of their customers within 30 days of the final installation — a great time to ask for referrals — they lose four days of leads. President Bob Dillon hopes this “pride and pocketbook” tactic works.
