Business Development

Can your company boost sales through productivity gains?

In a given day week or month ….

  • What percentage of sales time is spent prospecting (i.e. developing highly qualified leads) versus selling?
  • How many sales visits (to qualified prospects) do your salespeople make?
  • Or how many conversations (cold or warm) do they have with targeted prospects?
  • Or how often do your salespeople reach out to their top 50 / 100 / 150 targeted prospects?
    • And what happens with those targeted prospects in the next range(s) (151+)?

No two sales forces are ever the same.  Neither are any two salespeople ever the same. However, whatever your existing resources you need to ensure that the focus should always be on those prospects the company has targeted (i.e. go beyond the low hanging fruit many salespeople focus on) … and are ready to buy.  This should be priority number one.

Having worked with some of the most sophisticated selling operations in the world in High Tech, Healthcare, and many of the world's largest Financial Institutions for some 27+ years, I can attest to the fact that almost none have a practical game plan to address selling productivity.  

So you may ask … “If these large and successful companies do not care about sales productivity then maybe it’s not that important?”

Let’s examine the following scenarios:

Realistic circumstance - No optimization

In scenarios where a salesperson role is to find, qualify and generate awareness among the prospect universe at least 66.66% of their time, then it’s likely that each salesperson will only close approximately 2 sales per month.  

New Sales Visits per week Average no. of sales visits per month Assume 20% Sales conversion ratio
2-3 10 2 sales per month

However, in an ideal scenario, a salesperson could potentially close 8 sales per month (400% more sales) if his/her role were to focus on highly qualified leads (HQL’s) 100% of the time .

Ideal circumstance - HQL’s provided for optimized sales productivity

New Sales Visits per week Average no. of sales visits per month Assume 20% Sales conversion ratio
10 40 8 sales per month

Primary benefits of maximizing sales productivity (in the above scenarios)?

  • 6 additional sales (8 total) or more sales per month per salesperson (300%+ more than the non optimized scenario)
    • Significant revenue gain
    • Reduced lost opportunity factor
  • You probably employ more sales persons than you need
    • Field salespeople are your most expensive sales resource (even if solely commission based)
    • Costs per sale potentially increase 4 or 5 fold because of low productivity

Sure nothing is straightforward.  No doubt Marketing and or your Website help to partially fill the sales lead pipelines with qualified prospects.  Rarely however, (I’d hazard a guess - NEVER) are salespeople provided with sufficient HQL’s so that they can user their time more productively.

And of course if a percentage of their time is involved in other activities such as Account Management and other Administrative activities you can bet the result in real terms is worse than outlined above.

ETI offers a free sales productivity analysis.  In full disclosure we do it (for free) because inevitably the rationale to use our services becomes more than obvious when you see the reality.  

Are you ready to measure your sales productivity levels and explore ways to potentially increase sales velocity by 400 to 500%?

Please call.  We’ll be happy to discuss.

 

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."



Building Trust and Being Authentic is Critical in Sales

I recently read a Management Tip of the Day from Harvard Business Review that said: “When working in a foreign setting with different norms and rules, you're likely to make cultural mistakes. But you can lessen their impact by engendering people's trust in the first place. Make sure your foreign counterparts believe you care enough to try to learn about their culture, even if you haven't fully mastered the rules. Work hard to show genuine interest, curiosity, and respect.

But, you also need to be authentic. Don't fake an interest in Indian food, for example, if you could care less about culinary arts. Find a pursuit that genuinely appeals to you and explore that. Otherwise, it will be clear to your colleagues that you're trying to ingratiate yourself, not learn about the ins and outs of their culture.”

This advice applies equally to all aspects of client relationships. If you can’t build an honest and trusting relationship with a prospect or a client, you will never be able to take the relationship to where it creates the win-win needed for all to benefit.

Think about the process for prospecting or selling (up-selling or cross-selling too). You may have a better solution for your client or prospect, but they won’t be amenable to hearing about it unless and until they feel the trust and respect from you that warrants their attention.

And trust is based, quite substantially, on honesty. That means you need to tell the truth. If your solution isn’t the best one to meet the prospect’s needs, they need to hear that from you first. Tell them why you think that’s the case and give them the very same advice you’d give your best friend, even if you don’t benefit directly.

You may lose the sale as a result, but you will have gained the ongoing trust that will ultimately earn you far more business, from either that prospect or client or someone they refer you to. That kind of approach takes courage and it’s very different from the “sell at all costs / sell ice to Eskimos” traditional selling story.

But, in the long term, both you and your company will benefit from this approach.

The Seasonality of Lead Generation

Summer

About this time of year, every year, we get questions about the effectiveness of Lead Generation in the summer months. The thinking is that summer is a slow time where decision makers are away and generally things slow down. That’s true - to a very limited extent. To clarify the situation for ourselves and our clients we decided to analyze the results we achieved in the summer months measured against results from the rest of the year - over the last 20 years.

The projects we reviewed showed conversion rates which ranged from well over 30% to as little as 3%. The results indicated that conversion rates in the summer months were practically the same. In other words the research revealed that seasonality made no practical difference to results achieved

  • Summer months conversion ratio - 13.51%
  • All other months - 13.37%

We also wished to know whether the amount of effort (hours worked) required more hours worked in the summer months compared with the rest of the year.

Actually not. Using the same 20 year period we found that on average the exact same number of hours per lead is required when comparing summer months to all other months.

What accounts for this? We believe that the primary reason is that while fewer decision makers are accessible in the summer, there are also fewer obstacles in getting through to them. Buyers appear to be more relaxed and more amenable to engage in meaningful discussion.

Is it different over the Christmas holiday period? Nope. Pretty much the same.

So in terms of B2B Lead Generation we can definitively state that results do not vary seasonally (unless of course your business is inherently seasonal.)

Successful Sales and Marketing Strategies for Both Good Times and Bad

Ever notice that, even in the very toughest economic environments, 20 to 25% of companies still manage increase their sales? These winning companies are successful even in the face of the most punishing economic conditions. Their competitors, often with the same or even superior products and services, struggle and all too often fail.

What’s even more telling is that these very same companies thrive to a greater degree during good times. When everyone else is selling successfully they far outsell their competition and steadily increase their share of market.

Clearly, their success is not based on having a better solution. It’s really based upon the application of time-tested, solid sales and marketing strategies that keep them headed in the right direction regardless of the environment.

At ETI we've worked with many of these world class companies over the past 25 years. We have been witness to the strategies they employ that have created the most success. We've also learned from their failures.

We've distilled some of the insights we've gleaned from our clients' successes and many of the best practices employed by these winning organizations in a new eBook entitled Successful Sales and Marketing Strategies for Both Good Times and Bad. As a business leader with an interest in strategic business development, we'd like to share with you those strategies for success.

The eBook is yours to download for FREE by clicking here. There’s no obligation whatsoever, so click here to get your copy.

If you find it interesting, please feel free to share it and discuss it with your colleagues. And if you have any questions or comments when you’re done reading, feel free to give us a call.

Think twice before you grow your sales force!

With the economy picking up, you may be contemplating ramping up sales operations by taking on more sales staff. Some food for thought.

Depending on the additional costs of hiring a new sales person (in real terms probably about double his/her salary), you might instead want to consider investing that money in a professionally run lead generation and qualification campaign to maximize your existing sales force’s productivity.

For example - using only one sales recruit as an example (and you can play with the numbers as they may be applicable to your business): Salary - $60k + commissions.    Assume $75k (low by any standards for most B2B industries.)

Overhead x2 (travel, recruitment, training, social costs, management, etc.).  Real costs are probably in the range of $150k.

If you assume that the cost of identifying a qualified sales opportunity to be in the range of $1,000, then for the same $150k, you could deliver 150 newly minted, highly qualified sales opportunities to your existing sales force. And if the cost were $500 per qualified opportunity, that’ would present 300 new opportunities.

Looking at this conservatively (@$1k per), let’s say your sales team can convert 20% (1 out of 5 of those qualified opportunities) into a new client. That would generate 30 additional sales at your average sales value. If each average sale was worth $50k in revenue, that’s an additional $1.5 million in new revenue. (Not to mention the potential recurring value of that new client relationship).

Let’s take a more optimist tack. If the cost per qualified opportunity was actually as low as $500, and the resulting 300 additional sales opportunities converted at a better rate, such as 25%, this would net you 75 sales (to new clients).  And using the same $50k average per initial sale, this would net $3.75 million in additional revenue.

Not chump change!

So, in lieu of investing in new sales reps who need to be recruited, trained and mentored, and who will take some time and effort to hit the street running, it may well be more lucrative to increase the productivity of the existing sales force.   Also consider your recruitment success metrics.  How many new recruits  succeed out of the block.  What is your cost of failure?  And will an investment of $150k for example net you between 30 and 70 new customers with between $1.5 and $3.75 million in new net incremental revenue?  It’s doubtful.

Of course, your company might be among the very few that has a sales force that is really productive and has no need for additional qualified sales opportunities to work with.  But, in the 25 years we’ve been in business, I’ve never come across one.

Remember that for every minute your high cost field sales people are not out there selling to prospects and customers that have a need for your solutions, you’re losing a selling opportunity!

By the way, ETI has a great Sales Opportunity cost calculator that you may find useful.

For more on how ETI can help you ramp up your sales please call us at 1.800.466.4384 (914.747.3030).

What was the biggest b-2-b marketing success in 2011?

The other day we were asked by an editor at the American Marketing Association for an answer to the question “What was the biggest b-2-b marketing success in 2011?” Because she was on deadline, she wanted a response via email. My first thought was that it was not an easy question to answer, and I told her that.Then I went on to say:

With regard to your request, as I said in the voice message I left for you a short while ago, I don't think it's easy to transmit via email the complexity of a response to your question about the biggest B2B marketing success in 2011.

Certainly the widespread (and growing) use of marketing automation tools has had an impact on the environment. But, this technology is only a tool that has been added to the arsenal of those who are actively marketing in the B2B space. It is far from a panacea.

Like all tools that seem to be game changers, a cult begins to arise around them. These tools and techniques are being promoted as the key to sales success. Not too far behind are those who profess that social media (from Facebook and Twitter to LinkedIn) are competitors for the mantle of greatest thing since sliced bread.

But the truth is that the principles of selling remain unchanged, most especially in the arena of complex, non-commoditized products and services. The key to success in that arena is the ability to build trust relationships, and all of the technology in the world is inferior to personal connection when building trust. There are no technological shortcuts available.

Social media and technology can assist in the process by streamlining and enabling but, in the final analysis, a sale is consummated only after a good listener can engage the key stakeholders in an organization in a consultative dialogue about what keeps them up at night and how to best find a solution that will help them rest more easily.

Then, this morning, I received an email from Ari Galper entitled “Predictions and the New Currency of Business for 2012” and, lo and behold, he said pretty much the same thing. It’s a worthwhile read. He even posits that direct mail will make a comeback. I’m not sure that I quite agree with that one, buy maybe….

In any case, sales people and marketers are no different from anyone else in the sense that we are always seeking the Holy Grail — the magic bullet. Whether we’re thinking about weight loss, making money, making friends or any other human endeavor, there really are no shortcuts. The universal truth is that all of this requires hard work and concentrated effort to reach a level of success. And in the world of sales, nothing beats developing and cultivating a trusting relationship. Nothing.

Content may be king; relationships are personal

Since time immemorial selling has been about relationships. From the three martini lunch to immeasurable rounds of golf and scads of tickets to sporting events, salespeople have used every method possible to connect with and cultivate prospects (and clients) at a personal level. Now we’re being asked to believe that a new, disruptive technology has somehow altered the landscape. We no longer have to connect with people at a personal level to establish a trusted relationship. Now we can do it with content; a powerful, less expensive alternative – marketing automation! Content is king; no handshakes required, thank you very much.

So, how do we know what content to send them? What are they interested in and how do we know that? Exactly how interested are they? Where in the journey toward obtaining a solution are they? Where’s the pain?

If you follow the marketing automation model, and many do, you send out dozens of emails to people each month, each with a content offer. And then you track what they respond to and act accordingly. You send them whitepapers and round them up into webinars. Each time you gather more and more information about them (although, in practice, it always seems as if they ask the same questions each time I respond, no matter how often I respond, almost as if they really don’t know me at all).

Sounds to me like a lot of investment in creating content (although they tell you that you can “repurpose” the content you already have) and not so much invested in asking me the important, simple questions like: Why did I ask for that whitepaper? Why was that webinar topic of interest? What’s keeping me and my colleagues up at night? Where are my priorities and my company’s priorities at the moment?

They don’t bother asking me any of that, but they do send me lots of free content. The problem is that, when I look at the content, I discover that it’s either relatively shallow or, even if it has merit, it generally doesn’t quite apply to me or my specific challenges.

Eventually, I stop clicking and stop asking because I have actually soured on the relationship. It doesn’t give me what I need. I get no value from my time investment.

Of course, other than having to pay for creating the content (a substantial cost if done right), on the surface it seems as if it hasn’t cost them very much to generate highly qualified leads. I suppose if you are already investing in scads of content creation, then repurposing it will work. But, for most companies, that’s not the case.

No doubt, some people find that strategy hits the spot for them. The content they use is on the mark; it meets the needs of prospects and brings them into the fold through a self identification process. They may even make a purchase and become customers. When you measure the acquisition cost of that sale, it may seem attractively low, especially when compared to the cost of having to engage people personally from day 1 (excluding, of course the substantial investment in content and software/services).

But what about me, my needs and a sale to my company? That’s lost. Who’s measuring lost opportunity cost? Who’s assessing what might have happened if someone had taken the time to engage me directly, asked the salient questions, cultivated me at a personal level and earned my trust and my business? How does that figure into the cost per customer acquisition matrix?

It seems to me that if I’m going to buy into the marketing automation model, I want to do it on the basis of knowing what interests a prospective customer BEFORE I send them content. I always want that content to be relevant to their needs, and I want every single touch to bring value to the relationship – a clear statement that I listened, I heard and I have responded accordingly.

I can’t risk basing my relationship development strategy on inferences – on remote behavior from a distance. I prefer proactive to reactive. I need to speak with them first, understand their needs, concerns and aspirations. I need to establish a detailed profile of who they are, how they go about making decisions, how important to them is finding a solution and, most importantly, what are they trying to accomplish and what have they tried already that has failed. I need to know them – personally.

With knowledge of who they are and what’s important to them in hand, I can build a regimen of delivering exactly the content they need, knowing that it will bring value to them and establish the beginning of a trusted advisor relationship. And to achieve that most effectively, I need to invest in my own resources or hire a company like ETI Sales Support that has the people, skills and experience to engage them personally, consultatively and reliably to build a positive brand image, assess the level and quality of the needs they have for the solution we represent.

Generate more qualified leads by increasing prospect engagement with LiveChat

In today’s tough times we are all trying to do more with less and maximize our assets to the greatest degree possible. In sales one can only have one conversation with a prospect at one time.  However, if you integrate Live Chat into the equation with a team of well trained Business Developers who can properly interact and communicate to determine need and or pain, you can extend that reach by factors of 200% – 400%.   That’s a meaningful impact!

LiveChat enables the BD to quickly assess the need and get the Prospect into the right process for follow up.  This may include moving the prospect into a more detailed Lead Qualification call, a Sales Lead Pipeline, a nurturing track or  other non sales (technical support) tracks.  Yes, utilizing Live Chat will divert a number of Prospects from the Contact Us forms on your site. The benefit is instant communication with these constituents.

You will also not be in a race with your competition to see who can reach the prospect first.To ensure success the Business Development team needs to be not only well versed in all that you do, but must also be proficient in identifying need/pain and sales opportunity. They need to have a detailed knowledge of the organizations roadmap and access to information to pass to the visitors. Using “Operators” that are reliant on canned messages that shoehorn all visitors to fit or merely have them ask if you want a salesperson to make contact does not make for a good or productive experience. In fact, it could be a huge turnoff.

Here are 4 pointers to keep in mind when using LiveChat to build your prospect pipeline:1.

  • Understand that Live Chat is a dialogue just like a phone call.
    • Because this is a dialogue, make sure the Business Developer is smart and can respond quickly and intelligently to each post by the prospect.
    • Canned responses if used must be well written and focused.  Use of canned messages that do not relate to the question can turn the Prospect off quickly.
  • Make sure your Business Developers have the tools to move those ‘chatters’ who do not have needs for your products and/or solutions quickly to the right department or information.
  • As in any sales call, one should always be moving the relationship toward greater levels of engagement and commitment.
  • Your brand is important, make sure the chat helps build it:
    • Be respectful of the prospect
    • React to their needs and interests rather than pushing your agenda.
    • Articulate responses in proper English.  Spelling and grammar does count.
    • Be polite and take no short cuts.

If you’d like to learn more about how this works and how you can leverage your website to generate highly qualified leads call us on 1.800.466.4384 (914.747.3030).

Inertia and aversion to change

You’ve carefully identified and qualified the prospect, clearly identified a need and even gotten them to speak about their “pain” and the challenges they are facing in retaining their current solution. You’ve made a sterling ROI presentation to demonstrate the cost effectiveness of your solution and the fact that it will return the full cost of the investment in less than a year!

SLMA Radio Interview

I was interviewed last week by Will Crist of the SLMA for their weekly Radio podcast.

During the interview we discussed the impact of Marketing Automation on complex B2B Lead Generation efforts as well as other solutions that ETI provides.

Ultimately the primary point  made is that in the area of Complex B2B sales lead generation and qualification, the requirement to engage in a consultative dialogue in order to understand the pain, needs and challenges of prospects is an essential part of the Demand Generation equation.

I'm 3rd up ... about 20 minutes into the session.

Michael Falkson

Using Live Chat for B2B Lead Generation part 2

Back in April we first discussed an exciting ETI client initiative exploring the effectiveness of fielding B2B Live Chat discussions for the purpose of driving highly qualified sales opportunities into the sale opportunity pipeline. We’re delighted to report that the pilot campaign was so successful that it is being rolled out to other departments and product groups.

Here are 5 pointers to ensure success of B2B Live Chat for lead generation/lead qualification purposes:

  1. Understand that Live Chat is a dialogue just like a phone call.  Pre-set responses can increase productivity only if used properly. It’s important to be sure the response fits the question, rather than just picking the one that comes closest.  When the dialogue is focused on content and understanding the needs and pain of the prospect, then communication is highly effective which will result in more qualified leads.
  2. Make sure you screen out those ‘chatters’ who do not have needs for your products and or solutions.  Anyone requiring technical support or customer service should be routed to the correct department quickly and efficiently.  Make sure your team know how to recognize these contacts and that they have a good understanding of the inner workings of your organization.
  3. Because this is a dialogue, make sure the Business Developer can respond quickly and efficiently too each post by the prospect.  There is nothing more frustrating for a prospect than posting a question or comment and having to wait several minutes for someone to respond.
  4. As in any sales call one should always be moving the relationship toward greater levels of engagement.  In the case of Live Chat, that means moving the chat to a phone conversation.
  5. Your brand is important, make sure the chat helps build it:
  • Be respectful of the prospect.
  • React to their needs and interests rather than pushing your agenda.
  • Articulate responses in proper English.  Spelling and grammar does count.
  • Be polite and take no short cuts.

To learn more about smart B2B live chat please call us at 800.466.4384 (914.747.3030)  to discuss further.

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

The In-house Vs. Outsource Dilemma

Most companies that inquire about our services have already made a decision to outsource those functions and are seeking to find a partner that offers the best fit for their specific challenges.  Every so often, however, we encounter a company that is actively struggling with the in house vs. outsource dilemma. Certainly, the ability to develop “inside sales” resources in house offers a great deal of potential, and some companies elect to go in that direction.  Typically, their thinking is based upon assumptions that taking the process in house will give them greater control and communication, greater levels of expertise, a methodology for training new sales resources and, perhaps most importantly, offer significant cost savings.  On the surface, it seems like a simple cost-effective decision, especially when just comparing hourly rates – the most obvious metric.  Unfortunately, the issues are far more complex than that, and those objectives are rarely, if ever, met successfully.

First, most organizations don’t have systems in place that facilitate control and tracking of teleservices activity.  Success in this endeavor is far more complex than simply mandating some number of calls per day and providing a basic database (CRM) into which the results can be reported.  The requirement to actively manage the process is often overlooked.  And that’s not a part-time activity taken on by someone with little or no expertise in the area.  There is a need for ongoing monitoring of calls, to be sure that your brand is being represented with the degree of quality it deserves.  And there is a need for careful review of notes to ensure that potential opportunities are being managed appropriately and are not lost for lack of follow up and tracking.  Analogous to medical records, there is a 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.  As a result, there is far more management time needed than is typically planned.  On top of having to provide systems and dedicated management resources, you’ll need to provide dedicated, isolated space and phone systems that will support phone-intensive activity.  Those costs are typically overlooked and are always present in abundance.

Perhaps the most challenging issues relate to personnel (as is usually the case).  You’ll need 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.  Complex products and services need to be handled in a consultative dialogue, not with a script.  That means you’ll need people who can think and probe and listen and “peel the onion.” Personnel management is an ongoing process because there will inevitably be turnover.  And, with turnover, comes more efforts at 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 rather substantial indirect costs are also rarely considered when a company considers going down the in house path.

To further complicate matters, because these dedicated people are likely to be doing the same thing day in and day out, all day long, they will be significantly less productive later in the day than earlier.  The smarter and more sophisticated the people are that you hire, the greater the likelihood that boredom will soon set in (repetition is not stimulating to these folks).  This inevitably leads to shorter tenure and higher turnover rates.  And then there's vacation and sick leave with lost opportunity costs associated with those periods as well.  We always project our productivity as double that of a dedicated in house effort, and I've never been wrong about that estimate.  If anything, double is a generous view of in house productivity.

So, while hourly direct cost is significantly lower using in house resources, the total direct + indirect costs are often 50-70% higher than the rates we charge.  In fact, the most common outcome is to scrap the in house resources and go back to the old (extremely costly) plan of the "same old way."

So, if you have success in managing all of that and end up with a winning program, please let me know.  Because, as you can see, it will be unusual.

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.
 

Rethinking BANT, continued: How to better define a qualified lead

Final part of a three-part blog Part 1 | Part 2

In Part 1 of my three-part “BANT rant,” I expressed doubts about BANT being sufficient as the determinant of qualified sales opportunities.  First and foremost, BANT takes a seller-centric perspective that doesn’t consider the ways in which buyers think, at least not with respect to purchases that are not commodities.  Second, I suggested that while the BANT elements might be necessary for a buying decision, by themselves they are not sufficient to ensure that a purchase decision will ever be made, or if that purchase decision will be favorable to you.

In the second part, I reviewed each of the BANT elements, exploring in sequence why I felt that the BANT model is overly simplistic and fails to consider the buyer’s perspective.  I argued that requiring a Budget, for example, was less relevant than having adequate Resources (to acquire your solution), and might even work against you if that budget was determined without your input.

Then, I suggested that Need was also seller-oriented; the buyer is focused more on having a reason to act…now if the problems are imperative.  We have a multitude of needs that often remain unfulfilled for lack of impetus.  And, depending on how vital it is to obtain an adequate solution, the resources will flow accordingly.  Finally, I argued that decisions (perhaps for anything other than commodities) are virtually never made by a single individual, especially in the enterprise.

In all, I thought the following questions were far more buyer-oriented and relevant to how and when a decision would be made:

  • Is there a compelling reason to do something?
  • Are the stakeholders who would feel the impact included in decision-making?
  • Is there a solution out there that can resolve the problem using the resources available?
  • And, are there substantial consequences for failure to act timely?

Perhaps the very best place to start is by taking a hard look at the sales process and analyzing the critical stages.  First, a statement that may seem, on the surface to be overly simplistic, but when you consider it carefully, you may find yourself in full agreement.

The biggest impediment to closing a sale is inertia.  And, overcoming inertia is the primary challenge. Look at some of the language of selling: “value is more important than cost,” “it’s vital to provide clear ROI,” “establish mutual perception of need,” “where’s the pain?” and so on.  These are all perfectly legitimate perspectives, and I have made similar statements like that many times in coaching sales people.

But, the fact is, you can definitively establish value and pain and need and ROI and yet the prospective buyer simply doesn’t buy.  They continue the status quo with all of its inherent costs and pain (all of which they have openly acknowledged).

I can’t help believing that the reason for inaction is that the perceived cost of changing the way in which they currently operate – financially, emotionally (more likely) or both – exceeds the cost of maintaining the status quo, even to the point where status quo leads to the failure of the company.  It may not be rational, but it is quite human.

So, if inertia is the critical factor that a sales person needs to overcome in order to successfully conclude a sale, then it is vital for them to have an understanding of the prospect company’s orientation to change.  Wouldn’t it be important for them to know if a company is risk averse or, alternatively, is an early adopter, or somewhere else along the continuum?  And wouldn’t that be a valuable element to capture and rate relative to the qualifying characteristics?

This is clearly the missing element in the traditional BANT paradigm because, regardless of whether you view the sales process from a buyer or seller’s perspective, an opportunity can’t be seen as fully sales qualified unless there is a legitimate possibility that the prospect company will make the necessary changes. So what we do have?  I suggest “I CARE”:

  • Imperative – a compelling reason to consider a new solution
  • Consequences of inaction
  • Agreement among stakeholders
  • Resources to obtain a solution
  • Environment conducive to change (overcoming inertia)

This acronym represents a more practical and accurate method for defining a qualified sales opportunity and it is equally applicable to both seller and buyer.

First, it’s important to uncover a compelling reason for a company to take an action to meet a need or resolve a challenge.  Next, the consequences of inaction need to be sufficient to warrant a search for a solution.  Is there consensus for taking action among all the key constituents (stakeholders) who are feeling the impact of the need/challenge as well as those responsible for resolving it?  Then, a solution needs to available and the capacity to obtain the resources needed for a solution needs to exist (remember, if it’s important enough, the resources can be found, regardless of budgetary considerations).  And, last and most important, how amenable is the organization to effecting change?

Before I end this, I don’t want to forget the promise I made at the end of the first part.  Here is the setting:

You are walking down the street on your way to an important meeting.  It is lunchtime and you are hungry, you have the resources and sufficient time to eat.  There are a multitude of restaurants and street vendors, including some of your favorites.  Although you are hungry, eating is not your highest priority.

Your decision to stop and eat is reasonably complex.  There are competing needs, at varying levels of urgency.  You are hungry (a function of an early breakfast), abetted by a regular ritual of eating lunch at the prescribed time.  So your internal debate will take a multitude of factors into account.  For example:

  • I’m hungry
  • This meeting is very important
  • I always eat at this time of the day
  • I have sufficient time to eat before my meeting
  • I would love a few moments to check my email and voice messages before my meeting, (but I could do that without eating)
  • If I don’t eat, my growing hunger may become a distraction during the meeting
  • I have more than enough money in my pocket and, besides, my bill for lunch will be covered as a reimbursable expense

While considering your options, these and other questions will arise until you make a decision.  And, of course, making no decision is equally a decision.  In complex businesses, making no decision is what happens all too frequently – because the cost of doing something has ripple effects throughout the organization.  Inertia – maintaining the status quo (sometimes even in the face of all rationality such as unquestionable ROI) – is too often the easiest course of action.

How would this decision-making process be represented in the I CARE model?

  • Imperative: hunger, time of day (lunchtime)
  • Consequences of inaction: poor meeting performance, distraction
  • Agreement among stakeholders: You (and your growling stomach)
  • Resources: money is not an issue, and it’s a reimbursable expense
  • Environment conducive to change:  it boils down to inertia, doesn’t it?

How can a proprietor get you to stop and eat?  What can they do to raise the threshold high enough to overcome inertia?

You experience the answer all the time in those situations, don’t you?  Some vendors and restaurants pump out tantalizing smells of their luscious offerings and tease you with them.  Others do something with their display; maybe they toss the pizza in the front window, or display the desserts or even offer you a complimentary taste in front of their establishment.  Maybe they offer free Wi-Fi that enables you to easily and quickly check your messages.

All of those actions and offerings are designed to entice you to into their establishment and overcome inertia.  When they hit the right hot buttons for you, you’re sold.  But even having decided where you may eat, unless all the other factors are aligned you still may not physically go in (inertia).  It’s only at the point that you decide to CHANGE the course you’re on right now that the sale may actually get consummated.

To conclude what we’ve been exploring over the past few weeks, BANT has been a useful and important early model for focusing the qualification process.  But it needs some rethinking because it fails to consider the prospective buyer’s viewpoint and is inadequate in identifying the elements that are the key determinants for concluding a sale.

When a seller has a clear understanding of how a prospective buyer makes their decisions, and solid insight into how the prospect views the issues and their proclivity to change the way in which they behave, they have more chance of success.  This more closely aligns their goals with those of the prospect and provides them with far better insight as to the hot buttons that will serve to overcome inertia (which is, after all, the heart of the sales challenge).

And isn’t the purpose of defining a qualified lead all about providing sales people with opportunities that offer them a better chance of closing more sales in less time?  Success in that endeavor is the basis for enhancing sales productivity, maximizing ROI and increasing sales revenue.

BANT, however time tested, does not necessarily increase the chance of sales success.  I CARE does it better.

Rethinking BANT: How to better define a qualified lead

Part one of a three-part blog Four commonly accepted parameters are almost universally used to define a qualified lead.  The folks at IBM are widely credited for the development of an acronym for those parameters – BANT (Budget, Authority, Need and Timeframe).

More formally, the acronym is applied as follows:

  • Is there a Budget allocated for a solution (and is it sufficient for your solution)?
  • Has the Authority for the purchasing process been identified (and are you in touch)?
  • Is the Need for a solution well defined (and does it match your capabilities)?
  • What is the Timeframe for purchasing and implementing a solution?  Is it in the next six months, 12 months, or over a year?

Many companies use this paradigm as the heart of their lead scoring process.  It helps them decide how and where to focus their resources to bring revenue into the pipeline.  So it’s important to confirm that the BANT approach is both valid and sufficient to meet that need.

I plan on exploring these issues in detail in this three-part blog.  You can think of it as my three-part BANT rant, starting with this segment as an overview.

From my vantage point, there are two obvious problems with BANT.  First and foremost, it is seller-centric.  And, as every successful sales person with experience knows, it’s never about you (the seller), it’s ALWAYS about them (the prospect).

If you fail to look at the relationship from the prospect’s (buyer’s) perspective, the likelihood of making a sale is diminished – unless, of course, your offering is so far superior to the competition that the decision is a no-brainer.  But if that were the case, then your closing ratio would be very close to 100%!  Correct?

The second problem is that this seller vs. prospect perspective pushes BANT off the mark.  You do need money, a decision-making process, a need and (assuming it’s important), a time frame for making a decision and implementing a solution.  But the BANT parameters themselves are only tangential to what’s truly important in selling.  And, as a whole, while these parameters are arguably necessary, by themselves they are not sufficient as qualifying criteria.  They lack essential characteristics that are, perhaps, even more important than those four.

Let me offer one simple example as “food for thought” (sorry in advance for this).

Food is a universal need for all living things.  No argument there, I presume.  We can survive without food for a reasonably long time; maybe even weeks.  But, without food, we will end up just a dead as we would without oxygen.  There’s the “N” in BANT.

So let’s consider this scenario:

You’re walking down a busy city street around lunchtime.  You’re hungry, but you’re also on your way to a very important meeting with a new client or a hot prospect.  You’ve got plenty of money in your pocket and a budget reserved for lunch (there’s the “B”) and you need to make a decision (you are obviously the “A”) as to whether or not to stop to eat before the meeting.  You’ve got 30 minutes until your meeting starts and you’re five minutes away from the location, so time is more than sufficient (“T”).

You pass a multitude of restaurants and street vendors along the way.  How can the owner of a food establishment predict how likely you are to stop and eat?  And, what, if anything, can the proprietor do to get you to eat at his or her establishment?  (By the way, this example would be just a valid if there were only one food source along the route – and it was your favorite.)

If you think about this dilemma from the perspective of the proprietor as well as your own, you’ll begin to understand the case I plan to make over the next two weeks.  I plan to focus more directly on why I think BANT is only part of the story and, specifically, what those shortcomings are.  And then, I’ll explore ways to add value to BANT so that you are more aligned with the buyer’s perspective.

Finally, I’ll offer an alternative viewpoint on how to better define a qualified lead – identifying the factors that are both necessary and sufficient – and one that should enable sales people to focus their energy on opportunities with greater potential for success.

 

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