Appointment Setting

Outsource or “do it yourself” B2B lead generation?

Certainly, the ability to develop in house resources to match the ability of a specialist company like ourselves appears to offer more potential.  Typically, the thinking is based upon the assumption that doing it in house offers …

  • greater control
  • greater expertise
  • a methodology for training/identifying future sales resources
  • and other significant cost savings.  

In other words the prevailing thinking is ‘we can do it cheaper and better’ in house rather than outsourcing to a 3rd party specialist!

On the surface, that seems like a simple cost-effective decision, especially when comparing with an outsourced operation.  However, the practical issues are far more complex with the result that most in house attempts never achieve the desired objectives.  And it is this failure that in effect reduces sales instead of increasing your profits.

The fact is that most organizations don’t have systems in place to control and track and manage in house tele-services / tele-prospecting activities.  That’s especially true for startups.  Success in winning new customers is far more complex than simply having you insist on a certain number of calls per day and providing a basic database (CRM) into which the results can be recorded.  The need to actively manage personnel and the processes required are often overlooked.

Here are some of the required elements:

  • A systematic methodology for recruiting, hiring and training qualified people.
  • The more complex your subject matter and value proposition, the more difficult it will be to find the “right” people.  
    • Some considerations:
      • University Graduates?
      • Significant Business experience?
      • Familiarity with selling to and navigating complex (and large) corporations?
  • Complex products and services cannot be handled in a dialing for dollars mode using a script.  This means you need smart people who can engage in a consultative dialog, think and probe, listen and “peel away at the onion.”
  • Personnel management is an ongoing process because there will inevitably be turnover.  Meaning more effort recruiting, hiring and training (with lost opportunity cost during the ramp up period).  And that’s true even if a career path is established, because you’ll need to replace them when and if a promotion occurs.  These substantial indirect costs are often not considered when a company considers going down the in house path.
  • Making sure that your brand is being represented professionally
  • Rigorous quality assurance
  • Lead distribution and management
  • Record Management
  • Need to ensure that the notes related to the progress of each opportunity are sufficiently detailed to enable someone else to take over the record should the current business developer be replaced.  
  • Maintain focus:  Often the Business Development team, once in place, often gets sidetracked with other duties (administration, account management, customer service etc.).  Allowing this to occur dilutes the effectiveness of the entire effort as productivity drops dramatically.

So there is far more management time needed than is typically accommodated for.  And on top of having to provide systems and dedicated management resources, you’ll need to provide efficient and quiet workspaces and phone systems that will support phone-intensive activity.  Those costs are also usually overlooked.

To further complicate matters, because dedicated people are likely to be doing the same thing day in and day out, all day long, they are significantly less productive later in the day than earlier.  The smarter and more sophisticated the people you hire, the greater the likelihood that boredom will soon set in.  This inevitably leads to shorter tenure and higher churn rates.  And then there’s vacation and sick leave with the lost opportunity costs associated with those periods as well.  

At ETI we expect our productivity to be at least 100% more productive than that of a dedicated in house effort (deploying similar resources). Fact is on average we’re about about 200% more productive.

So, while on the surface it seems that doing it yourself may be better and cheaper it rarely works out that way.  Once you take all the direct + indirect costs into account - and measure this against the actual outcomes - insourcing is usually substantially higher than outsourcing.  And far less effective!


Client Quote:

"Over the years I’ve analyzed what it would take to duplicate what they provided for us with internal resources and we always came up short on our analysis. It was always more economical to leverage a relationship with ETI."



Lead Generation is about building Sales and Revenues. Not about fairness!

Companies often look at their sales force as if all reps were equal.  But of course this isn’t so.We appreciate the motivation of clients being fair insofar as the number and type of leads each rep should receive per week/month/year.  Sales and Marketing Managers frequently ask us about this all the time.

not-fair-logo.png

Experience has shown that acquiring new leads in certain geographies may be more difficult than in others.  This results in some reps being rewarded with fuller sales lead pipelines than others who receive less.

Within your salesforce you may also find some reps who are only interested in “ready to buy now” type leads.  They prefer not to be bothered with anything else (one could describe these reps as order takers).  Others may be hungry and are thankful for all the qualified leads they receive even those with lower qualification criteria.

You may also have salespeople who are more effective when selling to larger companies rather than smaller ones.  Some sales persons may be are successful selling into certain verticals.  Some may be better selling certain products/solutions only.

The more important question is what will it take to make your salesforce more productive (i.e. how to sell more in less time?) Treating everyone equally may actually hamstring the desired end result.  Customizing the leads  you deliver to your reps and focusing on their individual strengths will help to maximize their productivity.  They should also become more effective over time.

ETI Sales Support will work with each one of your salespersons to make sure they succeed with the leads they receive based on their individual needs and capabilities.

Customizing a strategy for each salesperson which focuses on his/her strengths increases the odds for each one’s success.  Naturally the more your reps succeed the more your company does to.

A win win for all!

Brand Can Affect Tele Prospecting Results by an Average of 30%

I recently conducted an analysis of work done for ETI clients since 2001 by categorizing them into 2 buckets … “Well Know Brands” (WKB’s) and “Lesser Known Brands” (LKB’s). We then evaluated the number of first calls which resulted in a substantive conversation with each prospect. Results showed that the WKB’s beat the LKB’s by some 30%. Moreover 25% more of these WKB records converted into opportunities than the LKB’s.

You might say it makes good sense that top Brands like American Express, Google or Motorola get more attention than XYZ No Name Brand.

Of course this makes sense. But one must bear in mind that top Brands spend millions if not billions building their brand equity. Smaller lesser known brands simply do not and cannot match these resources.

What actually happens in the real world is that many of the initial calls being made to prospects by LKB’s are actually Brand Building by their very nature. True there’s always some low hanging fruit, but successful Tele-Prospecting efforts relies on an interactive communication process to develop a trusted relationship.

Only when a prospect’s pain (or need or problem) is acknowledged and a level of trust has been attained - that an appointment could be setup for a sales person to become engaged.

So yes there is additional cost to the LKB in terms of the extra time needed to generate a lead. However, that investment is razor focused on the prospect company you want to do business with. It soon becomes evident that the LKB does not need to invest millions in media and brand building activity to achieve that. (In fact I’d hazard a guess that if you factored in the real cost per prospect touch of the WKB’s against the LKB’s you will find that the cost for LKB’s is substantially lower.)

That being said, one can also supplement go to market strategies with these low cost highly focused activities.

  • Be sure that you have relevant content for prospects who may request it.
    • A “send me an email” request may be regarded as a is a fob off, but as long as the prospect has a need and you are persistent, positive and professional in communicating with the prospect you will have an impact.
    • Also leverage Marketing Automation tools track content consumed on your web site or via promotional emails sent
    • Leverage contacts on social media (such as LinkedIn) to get entry to a prospect company through a recommendation?
    • A personal letter drafted by a professional copywriter can often be very effective.
    • Other activities such as PR, Trade Shows, Webinars can help but may also be costly.

Finally, remember that the only people who matter to your company are those you want as customers. Focusing your brand building activities exclusively on prospects can be effective and will lower your overall costs.

Recently I was interviewed on this subject by Jim Obermeyer of the Sales Lead Management Association. Click below to listen.

Bells & Whistles vs Need, Pain & Interest

I got a call yesterday from a young inside sales rep who works for a company that specializes in automated tools to assist the inside sales process. The call resulted in one of those rare win-win-win outcomes, although he might not see it quite that way. Let me explain.

He introduced himself by saying something about some vague connection between me and the CEO of his company, implying that somehow he and I had spoken or communicated or knew one another. I don’t think so.

More likely, he was responding to my click on a broadcast email I had received earlier in the day from his company inviting me to an all day web conference on the topic of inside sales. Although I had an interest in the topic, my schedule precluded my attending, so I was just poking around to see what I might have missed.

Other than raising my suspicion with his introduction, the young man was otherwise quite articulate and seemingly knowledgeable about his company’s product line. He explained that he had done some research on our company and had determined that they could help us because their products focused on assisting companies with inside sales and lead generation missions by providing automation tools to enhance productivity.

He then asked if we had a CRM (I suppose if I said we didn’t, he’d offer to sell me some very large index card cabinets). I explained we ran a very robust, proprietary application on an Oracle platform that basically ran our entire business as well as providing ourselves and our clients with web-based CRM capabilities.

Without skipping a beat, he launched into a discourse about some of their products and how they could help us do everything short of creating world peace and climate control. Very impressive promises, indeed.

What he forgot to do was to earn my trust. He never asked me about how we use our CRM, what were its capabilities and perceived shortcomings, or what, if anything, we’d love to have that we didn’t already have. What made him think we needed his magic tools?

So he never really earned the right to move to the next level of relationship building. He turned the conversation on a dime from me and us, to him and them, without giving me a chance to tell him more about what we do or might need.

When I told him that the promised bells and whistles had strained my sense of credibility, he offered to connect me with a subject matter expert who would explain how it worked and why they could do what he promised they could do.

Suffice it to say that he had lost me.

Faced with his offer, I was left with two options. I could tell him I wasn’t interested and hang up, or I could ask for him to email me some information so I could think about it more before wasting my time and that of his subject matter expert. After a little push back, that’s what he did.

The material he sent was basically a link to a video presentation by a sales manager about their Salesforce.com solution. It was nicely done. However, because our application also integrates with Salesforce.com, the presentation had little value. And although there were some slick features included, most of these are already have been embedded in our application for many years.

The real win for me was in getting an idea from their presentation about how we might present calling information in our application that might make it more useful. Neat, easy to do, and a contribution that made my time on the call worthwhile for us.

But at the outset I promised that it was a win-win-win outcome. Where are the other two wins? Here they are.

The win for him was the fact that I was not, and would likely never be, a qualified prospect for his company’s Salesforce.com tools. Had I agreed to speak with a subject matter expert, he would have recorded this as a positive outcome in his records when, in fact, it wasn’t. A false positive is not a real positive.

The subject matter expert also got a win -- by saving his own time and not making a presentation to an unqualified prospect without any potential whatsoever to make a purchase. By saying no to the invitation to meet I had enhanced his sales productivity.

So that was the win-win-win outcome I promised, but what is the real takeaway here?

If you are going to initiate a meaningful relationship with a prospect, new or otherwise, you need to do more than satisfy yourself that they are a suspect. You need to earn their trust by probing to understand their needs, challenges, interests and aspirations. What keeps them up at night?

Bells and whistles are interesting to present, but they are all about you. And prospects have no reason to care at all about you. Qualifying a prospect requires an in-depth understanding of them, because it’s always all about them (as it should be). You don’t earn the right to speak about yourself until they have finished speaking about themselves and you have something to offer that will help them meet their needs, achieve their goals, resolve their challenges, or sleep better at night.

Shifting focus from selling to relationship building

I received an email the other day from Ari Galper. Ari runs a sales training business called "Unlock the Game" (www.unlockthegame.com) which focuses on shifting the perspective from selling to relationship building. At the core of his teaching is an understanding that the key to sales success is in reducing stress, not increasing the pressure.

Can Lead Nurturing via Marketing Automation system beat ‘Phone’ based Lead Nurturing?

The buzz around Marketing Automation Systems is heating up. It’s quickly becoming the hot new ‘gotta have’ software just as CRM was earlier in the decade.

Partnering Business Developers (BDs) with Sales

Experience shows that the relationship between Business Developers (BDs) and the sales people who ultimately are our primary constituents is very important to the success of a business development effort. A basic element in this relationship is the need to foster bi-directional communication as a regular discipline.

Key Lead Generation Success Factors

  • There must be a compelling need in the target market for a solution
  • The targeted vertical and constituency should be easily identified
  • Focus should be solution not product oriented
  • A highly competent and managed Business Development team with a well rounded understanding of how your solutions meet prospects needs

Lead generation vs. Appointment Generation

What are the primary differences between Appointment Setting and Lead Generation efforts?

  • It’s relatively easy to get appointments.  Even with top decision makers in large companies.
  • It’s generally much harder to identify genuine purchase potential in addition to setting an appointment with the key  individuals who would ultimately be involved in making a purchasing decision.

Why?

Appointment Setting:

Assuming the solutions you offer and your brand is well positioned in the marketplace, then many executives may be at least willing to “learn” more about what you might be able to do for them.

If you’re brand is not well known, then it’s certainly much harder.

However, when little or no commitment is involved, it’s an easier row to hoe.

This does not, however, signal that they have real buying interest.  They may have a need.  They may even have some pain.  But that’s not what’s being asked of them.  They’re simply being asked to say yes to “learning more.”  Most of all, it doen’t mean that their organization has the capacity to implement the required change in the near term.

Yes, a good sales person who is worth his or her salt might take this opportunity and, over time, develop it to the point that a sale can take place.  However, rarely do appointment setting programs generate near-term sales.  And rarely are sales persons efficient and patient enough to nurture leads over time to ensure their long-term success.

Of course, you can always get lucky.  But luck is not a strategy. It’s always useful to remember in this context that in any given sales force the 80/20 rule generally applies.  80% of the sales force is comprised of order takers (or farmers) and only 20% are real hunters.  Moreover, generally speaking, 80% of the sales force generates 20% of the sales revenue.

So is an appointment with a decision maker in and of itself a “bad” result?  No.  It’s just not an efficient or productive one, because the productivity of the sales person is not maximized and the cost per sale, ultimately, is more expensive   even if your cost per appointment is lower.

Lead Generation: Consider on the other hand a lead generation effort that is focused on maximizing sales productivity.  It emphasizes identifying real “ready to engage “opportunities, enabling the sales person to spend more time selling to the right prospects at the right time.  In other words, lead generation effort should not just open the door,they should open a door only where real potential to purchase exists.

Why it comes down to sales productivity.

Sales productivity has been addressed many times in this blog.  In fact, for the past 20 years it has consistently been ETI Sales Support’s motto.  (You may find the 3 part blog entitled  Rethinking BANT  of interest.)

Table 1:

Assumption Explanation
Time available to each sales person A sales person can potentially visit with one opportunity per day
Cost per appointment (Appointment Setting effort) $600
Closing ratio – Appointment Setting (year 1) 10%
Closing ratio – Lead Generation (year 1)/td> 20%
Appointment Setting annualized result: Assume 50 weeks per year X 5 appointments per well X 10% closing ratio 55 Sales Cost $150k Cost per sale: $2,727
Lead Generation annualized result: Assume 50 weeks per year X 5 appointment per wellX 20% closing ratio 110 Sales Cost $250k Cost per sale: $2,272
Impact of increased sales productivity on the cost per sale $455 less from a Lead Generation effort vs. an Appointment Setting effort.

So even though the cost per opportunity is higher ($1,000 vs. $600) via a Lead Generation effort, the number of “sales” over the equivalent period is double and the actual cost per sale is $455 less than the result of an Appointment Setting effort.

Lastly, let’s also not forget the Lost Opportunity factor.  If your sales people are not calling on those prospects that have real buying potential and the competition is, then your poor investments in Appointment Setting are just that much more costly because they are spinning their wheels talking to the wrong people and the wrong prospect companies.

So think twice about wasting precious selling time on plain old appointments.  A better choice would be to invest in a highly effective and sustained lead generation effort that will result in real sales sooner.

Aberdeen 2009 B2B Teleservices Buyers Guide is out

The Aberdeen group is out with their 2009 buyers guide.  This study focuses on the Best Practices of Best-in-class companies who deploy outsourced B2B Teleservices. Some highlights ...

Best-in-Class companies have sales teams with an average of 90% achievement of the overall sales team quota

Best-in-Class companies increased their average revenue per sales rep by 10% on a year-over-year basis

Best-in-Class companies experienced an average 7% year-over-year improvement of their bid-to-win ratio

Here is the press release:

SOURCE: Aberdeen Group

  

Dec 10, 2009 10:00 ET

B2B TeleServices: The 2009 Buyer's Guide

Going Beyond the Simple Acquisition of Flat Data or Sales Appointments

BOSTON, MA--(Marketwire - December 10, 2009) - Top performing sales organizations are meeting the challenges of increasing the quality of incoming leads, as well as the overall size of their pipeline, by turning to external providers of business-to-business (B2B) teleservices for a wide variety of deliverables, according to a new research study published by Aberdeen Group, a Harte-Hanks Company (NYSE: HHS).

"B2B TeleServices: The 2009 Buyer's Guide," which examined 206 organizations deploying outsourced B2B teleservices, found that the sales teams of Best-in-Class companies achieved an average of 90% of the overall sales team quota.

"When organizations deploy an outsourced B2B teleservices provider to acquire and deliver some form of sales opportunities, they are essentially seeking to fill the selling pipeline with as many qualified leads as possible," says Peter Ostrow, Research Director, Sales Effectiveness, Aberdeen Group, the report's author. "Leading companies are building substantial, multi-faceted relationships with solution providers that go far beyond the simple acquisition of flat data or sales appointments."

The report reveals what leading companies have been able to achieve through deployment of outsourced B2B teleservices, such as:

 

--  7% yearly increase on average in bid-to-win ratio
--  Average annual revenue per sales rep has increased 11% year-over-year
Click here to obtain your copy.
 

Lowering marketing budgets will lower sales lead performance

In a post to from the Sales Lead management Association John Obermayer makes an interesting and timely point:

While most C-level managers realize that build-and-ship schedules are tied to sales performance, few understand that sales performance ultimately is tied to sales lead performance and the marketing budget.

Reduce your lead generating marketing funds and within 30 days inquiries will slow down in proportion to how much you have cut the budget.   The frightening subsequent sales failure happens within 60-90 days when sales plummet because the pipeline of prospects has slowed to a trickle.  Not to put too fine a point on it, but this is a prime example of cause and effect.

In difficult times many companies make cuts without thinking through the consequences of their actions.  I have seen this time and time again ... sometimes with disastrous results.  In difficult times it's precisely the investments you make in lead generation, lead nurturing and lead qualification efforts that will keep you in the game.

How long does it take to convert an inquiry into a qualified lead?

Based on my experience, I have always strongly held the view that the sooner a web submitted inquiry is followed up, the greater the likelihood of converting that inquiry to a new customer. This is not to overlook all the prior discussions necessary to determine the prospect’s potential as a qualified opportunity.  Then to obtain the buyer’s consent to meet with our client’s sales rep to see his presentation. In other words to show that he is sales ready.

Using data we collected over many years we analyzed the results by ¼ hour segments to see in fact what happened time wise. The graph below is the result.

 Speed to lead

Here you can see that about 80% of the qualified leads were completed within 1.5 hours - in one or more conversations with the decision maker.

As this analysis makes clear there’s is no doubt that speed of follow up is critical to a positive result.

Does this mean you should not invest time in making a few more follow up calls to qualify the rest? 

Maybe so if you’re selling a product for a handful of dollars.  Even a few hundred dollars. But when you’re marketing big ticket (complex) products or services there can be no doubt that investing in the “long tail” makes sense.

It’s also simplistic to looks at the results on their own. Why?  Because there is an inverse proportion to the sales potential.   i.e.  Short quick commodity type sales happen quickly.  Complex high ticket products and services are usually developed over time and require a well planned thought out lead nurturing effort.�

Aberdeen Research - B2B Teleservices Study Released

Aberdeen consulting has released a ground breaking study into the B2B Teleservices Industry. Readers of this blog can obtain a free copy by clicking here.

The following press release provides some background.

B2B TELESERVICES: THE 2008 BUYER’S GUIDE

BOSTON, MA – May 28, 2008 – In a first-time, comprehensive research study of the B2B TeleServices industry, Aberdeen, a Harte-Hanks Company (NYSE: HHS) examines the lead discovery and qualification pressures faced by marketing and sales practitioners, the actions they consider to drive peak performance in their marketing investments, and how Best-in-Class performers utilize outsourced teleservices methodologies to drive maximum pipeline content and bid-to-win performance ratios. As an end-user's "buyer's guide" to a sector rarely covered by objective research methodologies, this April 2008 study reveals leading practices in lead lifecycle management deployed by teleservices customers, as well as exploring blended human / technology solutions they have managed to ROMI success.

Data acquired from over 200 enterprises reveals a number of impactful data points, according to Peter Ostrow, VP/Group Director, Customer Management at Aberdeen, the study’s author.  “Best-in-Class companies place a premium on lead quality, whereas Laggards reveal an interest in utilizing services to help address an out-of-control lead generation process -- too many leads to handle -- at a pace more than five times as high as that of top-performing organizations,” he explains.  “This reflects a lack of organizational and vendor management capabilities among Laggards, who benefit the least from their efforts to drive actionable intelligence to the sales team.” 

In addition to the quality/quantity balance necessary to achieve Marketing/Sales harmony, the Best-in-Class companies in Aberdeen’s research demonstrate a preference for the well-defined deliverables provided by appointment-setting methodologies.  “Top performers clearly wish to tee-up ready-booked appointments or conference calls for their sales team,” Ostrow says, “ but only if the meetings are highly substantiated by relevant account intelligence, identification of appropriate business pressures and the involvement of powerful influencers or decision-makers in the conversation.”  He also cautions against an over-reliance on appointment-setting as a sole methodology, pointing out that survey respondents who do so actually experience losses in year-over-year metrics such as sales performance against quota, and average deal size.  “Best-in-Class companies who remain flexible about their execution, compensation and delivery model from B2B teleservices providers,” concludes Ostrow, “realize 15 to 20% increases in these crucial performance metrics.”

The required actions for companies seeking to gain the most benefit from external tele-provider services, according to Ostrow, include adopting a high degree of collaboration between outsourced calling staff and the customer’s marketing and even sales personnel, preferably building 1-1 relationships that maximize their potential to improve on account penetration strategies, messaging quality and overall program ROI.

To obtain a complimentary copy, visit:

http://www.aberdeen.com/link/sponsor.asp?spid=30411182&cid=4883

 

Michael Falkson

MIT Sloan School of Management Sales Conference update:

sloanconference

 On April 25, I was honored to serve as the moderator of a stimulating panel discussion at the 2008 MIT Sloan School of Management Sales Conference entitled Enterprise Sales: Winning Complex Large Accounts.  The panel consisted of some industry heavyweights including:

  • David Chan, Chief Operating Officer, Rainbow Semiconductor

  • Lee Levitt, Program Director Sales Advisory Service, IDC

  • Michael Lock, Director, Enterprise Sales, Google

  • Steven Meyers, Director, Sales, Pega Systems

It turned into a spirited discussion.  After I kicked things off with the first question, the audience took over asking question after question until our time was exhausted.  In the end, we covered as best we could, three areas of interest to attendees:

  1. Identifying and managing diverse stakeholders

  2. Techniques for winning large and complex accounts

  3. How to turn those sales into long-term relationships

Some brief observations from the panelists:

  • The sales process has changed.  Customers know more about your product and or service than they ever will.

  • Sales cycles are longer.

  • More decision makers are involved in decision making than ever before.

  • It’s still personal.

  • Speed of business has increased.  Large companies are not built for speed and have trouble keeping up.  Yet they have a desire to be fast.

  • Google trying to make sales less complex.  Smaller transactions and grow the accounts.

  • Always formulate ROI.  Why should they buy?  What’s the USE case?

  • Maximize existing relationships … opportunity management.

  • Walk away if it is not a fit.

  • After the sale, handholding is an essential component.

  • In Government sales, secrecy is a problem.  Develop an ally and feed them all the information so that they can help you make the sale.

  • Foreign companies selling into large US enterprises don’t face the same hurdles as US companies selling internationally.

  • If you don’t ask the question, you won’t get the sale.

  • Prioritize sales opportunities.  Focus on high probability prospects.  Get rid of those that have a low probability of closing.

  • If there is no pain, there is no opportunity.

The session can be heard here.

The entire conference can be heard at http://www.sloansalesconference.com/media/media_player.htm.

Sheldon Sachs

Leads don’t sell. Only sales people do.

Lead generation efforts are generally focused on identifying and qualifying high grade selling opportunities for the sales force. For the most part, lead generation programs do not generate order taking opportunities. If the prospects are ready to buy, the lead generator might just as well take the first order there and then.

In reality, sales only take place due to the persuasive ability of a sales rep to win the new customer and come away with the first order, as the final step in a program of lead generation, lead nurturing and lead qualification,

To this end I've posted a new in depth article entitle "Leads don't sell.  Only sales people do." on the ETI Website that takes an in depth look at how one needs to calibrate a lead generation effort for maximum impact. 

Click here for the full text.

Michael Falkson

What costs less costs more

We recently posted an important article on the ETI Sales Support site entitled "What costs less costs more".  The article examines the importance of measuring the cost per new customer acquired versus cost per lead, inquiry, click, impression etc.  Click on the link above to request a copy or call 1.800.466.4384.

Michae Falkson

Purchasing Business Development Services by RFP

Recently we’ve been involved in a flurry of RFP’s.  And this got me thinking about whether it’s a good idea to buy business development services via an RFP. Here are some broad principles:

  • If you’re buying a commodity then an RFP is a good idea.
  • If you’re buying expertise then an RFP is not a good idea.
  •  If you’re buying knowhow and knowledge then an RFP is a bad idea.
  • If you’re buying systems and integration capabilities then an RFP may be a good idea.  It may also be a bad idea.  Depends.
  • If you’re buying all of the above then an RFP is a real bad way to make a good decision.

Let’s examine the process.  Usually an RFP is designed to get prospective “vendors” to provide in writing comprehensive information about the company.  While this is an opportunity to shine, that really depends on their ability to write responses to an RFP.  It does not demonstrate an ability to deliver a great solution.  (Too wit there is now a whole industry of so called experts who make a living helping companies write RFP responses.)

Can an RFP provide insight into the vendor’s ability to deliver a solution?  Yes it can – but side by side comparisons of all the participants – when you’re buying complex solutions – is not going to give you this insight.  The only way to garner a comprehensive understanding of the company’s solutions and expertise is to get under the hood.  You need to understand the players … the environment … the systems etc.  You need to understand how these systems flow … and how they integrate.    And how the synergistic effect of the combined set of solutions comes together for your benefit.  You simply cannot get this from an RFP.  And you will not get this from the well prepared follow up presentations that usually follow.

In truth many companies simply issue RFP’s to protect their backsides.  The protagonists have usually already decided who they want … and are going through this process in order to be able to say they were fair.  In fact one can usually see who is going to win simply by looking at the questions and layout of the RFP.  Why?  Because the RFP is many times written and developed by the “probable” vendor.  Not the issuer of the RFP.

Is this fair game?  I suppose so.  It just depends on whose side of the equation you are on.  If you’re the friend of the decision maker who is issuing the RFP then you’re in the pound seats.  If say you’re the incumbent who is shortly to be unseated, then this is a patently unfair process.  And generally speaking a waste of time for all.  You might as well save everyone the trouble and make a decision.

So what is the best strategy? 

If you really think that other vendors can provide better solutions then you need to test.  Testing is the only way to make sure you’re getting the best bang for your buck.  Give the prospect companies a piece of the action and see who can beat the incumbent.  If they do – then you’re basing your decision on actual results.  Not fancy copy in an RFP.  Or pretty pictures in a well made presentation.  If the incumbent still beats them, then no harm no foul.  And you’ve saved your backside (and your company) from making a poor decision.

Testing however, needs to be done realistically.  You cannot compare apples with oranges.  You can only do side by side comparisons if the criteria for measurement are the same for all participants.  You must look at all elements that ultimately are important to the success of the effort.  This could cover issues such as developing a rating system for every opportunity identified (as rated by the sales force).  Or the conversion rates from “leads” to “opportunities”.  Or cost per new customer acquired which is the ultimate meaningful metric.  (I have written an article entitled What costs less costs more that deals with this topic in more detai.

eti Sales Support has never shied away from a contest.  We’ll be more than happy to be compared side by side with any competitor.  Any time! 

Michael Falkson

Which comes first? The Sales Force or the Sales Opportunity Pipeline.

At our recent Christmas party a consultant friend and past client joined our annual celebration.  He told us an interesting story.  About a year ago a new client of his (a small startup) decided to hire 2 salespeople in order to boost sales.  Our consultant friend advised against this strategy suggesting the company should rather invest in a lead generation effort using a specialist lead generation service agency to develop a pipeline of qualified sales opportunities.  Once that pipeline started filling he should then employ the necessary sales assets productively to close the awaiting business.  In other words, the consultant saw this very much as a productivity issue – not purely a selling issue. 

His client decided against this strategy and opted to rather invest in the new sales people.  About a year later the client met with our friend to review this decision.  The client somewhat reluctantly admitted his strategy was an expensive mistake which cost his company in excess of $250,000. This figure did not factor in the overhead including management, recruitment, training etc.  So the true loss was probably closer to $400k+.

The lesson here is simple.  Sales people are your most expensive assets.  Employing them to undertake work that can be outsourced to a professional lead generation and (superior) lead qualification outfit such as eti Sales Support, is expensive and unproductive. 

Bear in mind that the average cost of a technology or industrial based sales call today is north of $1000 dollars in real terms. It is essential therefore that the preparatory work be professional in all respects: identifying the decision makers … probing for pain … eliciting critical business intelligence … and finally selling the sales presentation appointment.  eti has developed a very useful and easy to use Sales Cost Calculator.  This Calculator will instantly figure your actual cost per sale.  Please give it a try.To learn more about maximizing your sales force’s productivity by developing a pipeline of sales ready opportunities please click here.  Or call us at 1.800.466.4384 (914.747.3030).

Michael Falkson

 

Is your sales lead opportunity pipeline recession proof?

Talk is that a recession has been creeping up on us - if it’s not here already.  Even if we avoid one a tougher economic climate is surely on the way - and several important questions need serious consideration:

  • How will your sales organization cope with the downturn?

  • How full is your sales opportunity pipeline with “sales ready” opportunities?

  • What will you do if New Customer Acquisition closing rates decrease, throwing off all your projections? 

  • Are your marketing teams in tune with what sales needs?   Are they being held accountable?

Most businesses in a downturn expect that sales from existing accounts will decrease compared to last year. So if you do not bring in new sources of revenue the situation simply can only worsen. 

That virtually leaves New Customer Acquisition (NCA) as the only practical way  of making up or surpassing a sales shortfall.  NCA will be worthwhile even if it costs more to achieve, because new customers not only shore up immediate sales, they have long term value. Lifetime value in fact. That’s an asset worth fighting for.The sooner you shore up your defenses the better.  If you’re not already prepared here are some immediate steps you might take to avoid running into problems.

  1. If you do not have an organized and programmed lead generation program in place push the start button immediately.    (No need to re-invent this business wheel - eti has done so 20 years ago. Outsourcing to an experienced, successful, fully qualified sales lead service like eti, is a very good way to go.) 
  2. Once your program is in place (tested and producing a positive ROI), build in a declining sales closing ratio.   For example say you normally close on average 20% of the qualified leads in your sales pipeline, then consider projecting close rates falling to 10% and budget accordingly.  (Note:  An eti pipeline development program can be expected to help increase closing rates compared with your current activities. If you engage with us in long term activity your increased sales productivity could be substantial.)  
  3. In difficult times weaker salespersons (i.e. order takers) usually fail.  Only genuine sales people (natural or professional) – who enjoy the challenge of selling and winning will succeed.   
  4. Is your marketing department wasting precious dollars (see our earlier blog on this subject) on ineffective, non sales producing activities?  This is not the time for spreading pretty pictures or cute brand advertising. It’s the time for accountable, effective sales building demand generation promotions to ensure you stay in the game and grow. Time to use your promotional dollars more effectively, more productively. Time to hold marketing accountable for their spending. 
  5. Lead nurturing and lead revitalization efforts can be crucial to your company’s continued success.  Too many companies neglect these activities in good times. Big mistake. More so in difficult times. 
  6. Develop an enhanced Customer Retention program to limit churn and revenue loss from existing accounts.  Proceed in a disciplined and organized way. 
  7. It's time to cut your losses and go with the best.  The best sales people.  The best target markets.  The best lead producing business development agency.   (The biggest is seldom the best!)

eti Sales Support specializes in lead generation, superior lead qualification, lead nurturing, customer retention and account management services.  We’ve been through past recessions and have the acquired experience of winning new customers and retaining clients’ existing customers - especially in bad times.Don’t wait for the phone to stop ringing.   Call eti now at at  914-747-3030 or 1-800-466-4384 to talk about  how you can maximize your sales productivity and beat the impending recession. 

Michael Falkson 

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