You will succeed at business-to-business direct mail sales lead generation if you master three calculations, and your response rate is not one of them. Your response rate tells you only a small part of what you are doing correctly.

I am assuming that you have a sales force, and that you use what is essentially a two-step sales process. First, you generate a sales lead. Then, your sales force closes that lead with a sale. But how do you figure out what level of response rate you want? By looking at three of the most vital numbers in B2B direct mail lead generation, namely, qualified lead rate, appointment rate and close rate.

Qualified lead rate
Your qualified lead rate is the percentage of all inquiries that are ready to meet a sales person. In other words, the percentage of all leads who are also qualified leads. If you have 100 leads but only 25 of them are qualified (can afford your offering, have the authority to buy, need what you are selling and are ready to act within your timeframe), then your qualified lead rate is 25%, the industry average. Good for you!

Appointment rate
Your appointment rate is the percentage of qualified leads that result in a sales appointment or demonstration. For many reasons, not all qualified leads will meet with your salespeople. The industry average is 30%. Thirty percent of all qualified leads should meet with your sales people.

Close rate
Your close rate is the percentage of sales appointments that translate into a sale. Sometimes this number is expressed as a ratio. If you close two out of every four potential customers that you meet, then your close rate is 50%, or two out of four. The average in most industries is 25%, or one out of four.

As you can see, the most important question in B2B direct mail lead generation is not What is our response rate going to be? If you have a small sales force and high close rates, you can be satisfied with low response rates. But if you have a large sales force and low close rates, you need higher response rates.

The secret is to remember that your direct mail response rates tell you how successful you are at generating leads, and no more. How good you are at turning those leads into paying customers is another story.

2006 Sharpe Copy Inc. You may reprint this article online and in print provided the links remain live and the content remains unaltered (including the "About the Author" message).

Alan Sharpe

Alan Sharpe is a business-to-business direct mail copywriter and lead generation consultant. As President of Sharpe Copy Inc. Alan specializes in helping businesses generate leads, close sales and retain customers using cost-effective, compelling direct mail and email marketing. Alan also uses his direct mail advertising services to help charities raise funds and raise awareness of their causes, using fundraising letters. Sign up for Alan Sharpe's B2B Direct Mail Tactics e-newsletter. Every Monday morning, receive in your inbox a short, helpful article on direct mail lead generation.