New Customer Acquisition

Is B2B Outbound Prospecting a Numbers Game?

Quite often, I hear: “Cold calling is a numbers game. When I was a salesperson, it took me X number of calls to get an appointment.” I suppose that’s possible, but I suspect that, most times, these anecdotes are not quite accurate.  For the most part, salespeople don’t keep accurate records and tend to forget quickly what actually happened. They tend to remember the happy accidents in which they called and uncovered what is typically known as “low-hanging fruit.”  It’s also rare (in my experience) to find salespeople who have actually made prospecting calls consistently, day in and day out.  And even if they did, they cherry picked the prospects.

Yes, many choose to think that tele-prospecting/cold calling/telemarketing is a numbers game.  The theory is if you make X number of calls, and speak to Y number of decision makers, you will get Z number of leads/appointments.

Nothing in life is quite that simple. Certainly not in the realm of complex B2B Sales Lead Generation.  If a “numbers game” exists at all in sales, it’s most often when there’s a commodity involved.

Consider some of the following variables:

  • Who are you calling?  (Who’s on your targeted prospect list?)
  • What’s the message?
    • Is there a compelling story?
    • Are you selling a commodity?
    • Are you just dialing for dollars?
    • How is your company/solution positioned in the marketplace?
      • If you’re selling a search solution, for instance, then it’s a lot easier to get someone’s attention if you’re calling from a brand leader (like Google) versus a company no one has ever heard of.
      • Who’s making the calls?
        • Good salespeople, for the most part, make poor telephone salespeople.
        • Are you employing a call center in the Philippines that has no comprehension of American Corporate culture and how to navigate its enterprises…or deploying inexperienced youngsters new to the workforce?
        • Do you know the name of the key contacts/decision makers?  And do you have good contact information – their personal telephone numbers (direct dials), email addresses, etc.?
        • Do you have a prior or existing business relationship (or not)?
        • Is your target list well defined?  If you’re selling ice from Florida to Eskimos in Alaska it doesn’t matter how many calls you make.  Maybe you’re selling a multimillion dollar solution to a smaller organization that may need your solution but definitely cannot afford it.
        •  Is this a blitz or part of a concerted, ongoing relationship and sales lead pipeline development effort?

Some factors that can impact conversion ratios:

  • Prospect lists – by as much as a 400% increase
  • Messaging – by about 100%
  • The quality of the Business Developer can have a marked impact.  I’ve seen results improved by several hundred percent.
  • Branding –  not so easily quantified, but it can have a significant impact.

Consider the following scenarios:

  1. One lead in 20 meaningful contacts (5% conversion), and each prospect is worth $10k;
  2. One lead in 100 meaningful contacts (1% conversion) – but this prospect is worth $10 million.

Which is potentially more lucrative?  You bet – scenario no. 2.  But that one also takes a lot more effort, time and investment.

So just looking at the number of calls, in and of itself, is not that useful a metric.  Ultimately the only key element that matters is $'s in the Pipeline, $'s generated – and at what cost.

What’s eti’s “secret sauce?”

If you're curious ....

  • What makes eti’s solution so special?
  • Why can’t I do it in-house (better and or cheaper)?
  • Why is eti’s solution better than the competition?
  • What is eti’s “secret sauce”?

    We thought we’d share a list of some of the key ingredients that go into making eti’s solution extraordinary in a new article posted on the ETI site.

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.

Marketing automation revisited

Shortly after my last blog post (“Content may be king; relationships are personal”), I came across the September 19 issue of BtoB Magazine. I noticed some interesting graphics on the Opinion Page that provided poll results for some recent Webcasts. I actually found these data fascinating. If you’re seeing them for the very first time, you might well share my interest.

In the first chart we discover that more than a third of those who responded to the August Webcast survey were regularly employing marketing automation technology, and that an additional 20% were in an early deployment phase. So more than half of those folks are using marketing automation techniques, and the balance are considering deployment.

It’s hard to know the degree of overlap between the attendees of the August Webcast and those who attended the one in September, but I think it’s safe to assume that the audience was not all that dissimilar. And, if the overlap was significant, then the results of the survey to the September Webcast are quite disconcerting.

That survey asked respondents to assess their level of sophistication in data cleansing. The clear takeaway from their responses is that three quarters of them have real concerns about the integrity of their data and that fewer than 4% are highly confident that their data are sufficiently clean and up to date.

The follow up question, related to the same webcast, drives that point home with a sledgehammer. Nearly three in five respondents feel they are either merely tossing stuff on the wall and hoping it sticks, or have significant doubts that they really know the audience to whom they are marketing.

I fully realize that the Webcast was designed to drive home exactly that point, and to encourage people to focus their efforts on data cleansing. Nevertheless, I find that result astonishing. Why in the world would a company use marketing automation tools to send streams of automated messages to people about whom they know virtually nothing? How do you think the recipients feel about the companies who are, at best, sending them material in which they likely have no interest and, at worst, are spamming them?

In my view, this is not a ringing endorsement for the use of marketing automation. I am a firm believer in the notion that every time I touch a customer or prospective customer, I need to bring positive value for them to that encounter. I can’t see how I could do that without first knowing something about them, can you?

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.

Build relationships with prospects to become a better salesperson

Making a sale starts with a building a relationship – and building a relationship takes effort. A lot of it. That's not to say it's hard, of course; building a relationship may not be the easiest thing in the world, but it's certainly simpler than trying to push or bully a potential client into purchasing from you when your product isn't a good fit with their mission, goals or company. If you want to start closing sales and creating a fuller professional life, it starts with making yourself available to your prospects as a valuable source of trustworthy, honest and useful information. If you want to sell something to someone, it's essential to know what he or she is looking for. Think of it this way: You wouldn't try to sell a minivan to a childless bachelor, just like you wouldn't try to sell a Corvette to a mother of four. When you understand your client's needs, you can work with them show them how valuable the service or product you're offering can really be to them. To do this, you need to open up a conversation with them – believe it or not, they might surprise you. Don't try to guess what they'll want. You never know, sometimes that metaphorical mom really is looking for her own sports car.

A salesperson's role is to understand the unique challenges that a client faces in its specific market or environment, then discover a solution that will help the client overcome these issues. Rather than simply asking, many inexperienced salespeople try to guess what a client needs – or, if that doesn't work, start throwing out every possible service or product in hopes that'll something will stick. This, however, is a waste of not just your client's time, but yours as well. Instead of taking this amateur approach to making a sale, start by simply asking questions, listening to their answers and working with your prospect to devise a solution.

If you want to start see your sales close, it's time to stop focusing on yourself and start paying attention to your client. Don't just sell what you offer -sell what your client needs. To learn what that is, ask questions – What are their key interests and challenges? What do they struggle with in their industry? What are they looking to fix?

Even if it doesn't appear that you have much to offer them immediately, a little extra digging might uncover a way that you can aid them in their mission. And if not, at the very least, you've opened up a productive relationship and established yourself as a trustworthy source should they ever need a service or product that you offer.

 

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.

What is a Call Guide?

The term 'call guide' is often mistakenly considered synonymous with the term 'script.' Perhaps in some circles, that is, indeed the case, but not at eti. Since our inception in 1987, we have never used scripts.

Calculating the value of Lead Nurturing

What is rarely taken into account in lead generation and lead qualification programs is the ultimate value of developing and building a prospect pipeline. For example, for every lead that is generated by ETI for our clients, we estimate some four to six additional prospects that require nurturing over time and of these a high percentage will develop into valid sales-ready opportunities at some point.

Few companies have the infrastructure (let alone the patience) to effectively undertake the task of nurturing future prospects. However, the rewards for those companies which accomplish this task successfully are potentially immense.

Our statistics reliably indicate that for every 100 or so prospects nurtured in the prospect pipeline, will render some 20-40 more sales-ready opportunities over time.   (Yes 20%+.)

Only you know the average value of each new customer.  And only you know the average number of years new customers will remain active purchasers. But the incremental profits from those extra sales minimize the nurturing costs and maximize the return on your overall marketing investments (ROMI).

Too few companies recognize the inherent future value of this pipeline and therefore the costs of nurturing appear to be disproportionately high.This could be a serious mistake. It is also short sighted because there has already been a substantial investment made in identifying these prospects.  So why waste and discard them?

Let’s take the following simple scenario:

Opportunities identified:

100
Cost per opportunity $500
Total cost $50,000
Prospect pipeline 400
Nurturing cost over 1 year $10,000
Opportunities from prospect pipeline. (Conservative first year estimate.  Result will eventually be higher.) 50
Total number of opportunities 150
Total cost $60,000
Total cost per opportunity $400
Saving on each cost per opportunity  20%

Now if you factor in some average revenues – say $20,000 with a conversion rate of 25% - the total revenues from the Opportunity Pipeline will be some $500,000. And the revenues from the prospect pipeline in the first year will therefore total $250,000.  The sum is $750k.

In the first instance the ROI (cost of sales) is 10%,

Together with the sales from the prospect pipeline, the sum is reduced to only 8%.  i.e. An incremental increase of 20%.

But it probably gets better.  Our experience shows that opportunities coming out of the prospect pipeline that have been nurtured over time enjoy great sales conversion ratios.  So ultimately the ROI may even be substantially better than in the above example.

For more information on how ETI can develop an effective and profitable lead nurturing effort and maximize your sales opportunity pipelines please call 1.800.466.4384.

How A Client’s Insistence That We Uphold His Company’s Brand Image Changed the Nature of Our Business

You may wonder what the process of acquiring new customers has to do with upholding a client’s brand image. We first learned to understand the importance of BRAND in the early 90’s when working on assignment for a Fortune listed 500 company.

Their executives made a serious point of informing us their company was much concerned that we should not do anything which might hurt their company’s carefully cultivated image.

On the contrary they went on to explain . . .

  • that in speaking with their prospective clients we should speak with esteem for the way their company does business
  • that we should convey their company is one which appreciates the customer as king
  • that they value the opportunity to pay attention to the needs and values of their customers
  • that they can be relied on to carry out their promises and offers
  • that they should be admired for their products and respected for their services. 

We immediately realized the essential truth of this client's definition of their brand, their company image, and the real value of their advice. Before long we decided to make changes in our business that would result in setting us apart from the average telemarketing service vendor of the time.

This decision required us to internalize that client’s priceless advice and to review eti’s company persona. It also affected our hiring objectives. The education and business experience of our phone agents would become one of the most important factors in our hiring decisions.

We would need to look for persons with an executive manner who easily and naturally spoke the language of their prospects. We would need people capable of understanding the need to uphold the client’s brand image whenever they spoke in their name. And scripts were thrown out in favor of Call Guides enabling us to engage in consultative and meaningful conversations with client prospects.

In due course our staff would be defined as Business Developers (no longer telemarketers or phone agents) in keeping with our clients’ objectives. These were, by and large, to acquire new customers via sales lead generation and lead qualification efforts. 

When we work for you, you’ll know that we are conscious of the fact that you too want respect for your company image and admiration for your products or services. You’ll get both.

Here is what clients have said about our approach:

  • “You don't describe yourselves as being in the business of generating leads. You defined your mission as New Customer Acquisition and Retention and maximizing sales/force productivity.”
  • “You sold us on the lifetime significance of new customers rather than the value of their first orders.”
  • “You have a basic brand image mindset which is very important to us.”
  • “Your Business Developers are graduates and have business experience. They adapt and converse freely because they are not bound by scripts.”
  • “You’re not the most competitive price wise. But if we wanted low costs we could have gone to any of the commodity type agencies that abound.”
  • “What we can’t get from your competitors are people who will be concerned to uphold our brand image.”
  • “You appreciated the concern we have for our brand image. You spoke our language.”

eti is concerned to convey the respect we have for our client’s brand image. This concept does not lend itself to a set of rules which can be prioritized and numbered. Brand image is not upheld or maintained or enhanced in this way.

Are “inbound” marketing efforts producing more cost effective results?

In a recent article in B2Bonline entitled “Study: ‘Inbound’ marketing rates high in lead-gen results” one would be led to believe that this is the case. 

Cambridge, Mass.—Inbound marketing, including techniques such as blogging, social media, search engine optimization and pay-per-click, which pull relevant prospects toward a business and its products, realize lower costs-per lead than outbound marketing efforts, according to a new report by Internet marketing company HubSpot.

The company’s report, “State of Inbound Marketing,” is based on an online survey performed late last year among 167 executives and business owners, 71% of whom work for b-to-b companies.

The survey found that respondents who spent 50% or more of their lead-generation budget on inbound marketing averaged $84 per lead, while businesses spending half or more of their budgets on such outbound marketing techniques as direct mail, telemarketing and trade shows averaged $220 per lead.

Search leads the pack in lead-generation efficiency. Survey respondents said they devoted an average of 12% of their budgets to search but gained 16% of their leads from their search marketing efforts.

So let’s examine the facts. 

Unfortunately HubSpot appears to have made an unfair  comparison.  The Inbound Leads referred to here are not leads at all.  They are mostly “hand raisers”, that is to say they have merely  inquired and we have no way of knowing how genuine each inquiry is.

This is because the ‘so called’ leads have not been qualified to ascertain quality. Their potential is unknown.

No one has established the value of their potential; their decision making processes; their purchasing timeframe; their budgets.  Etc.

All these aspects and more can only be ascertained by someone who has the experience to engage with the prospect and peel away at the onion in order to establish if the lead is worth the investment of a sales person’s expensive selling time.

Leads without qualification have little value to salespersons whose standard of living depends on the volume of their sales. In many instances the most experienced salespersons will not follow through on unqualified leads because it doesn’t pay them. In that event the total cost of the cheap leads would be wasted.  And your actual cost per qualified lead and sale will skyrocket.

eti statistics show that only a very small percentage of these types of  “low cost” inquiries actually convert to highly qualified leads.  Based on thousands of inquiries of this type – over any number of industries -  we can say with certainly that the range of conversion is between 5% and 15%.  If you take the mean of 10% you can then ascertain that the true cost per lead (based on their $84 average) is $840  - or 10 times what they claim.

That’s substantially higher than the cost of qualified leads from the other media mentioned.�

New Customer Acquisition in Tough Times. 4 Positive Sales Boosting Ideas

We've just posted a great new article (IOHO) on the ETI site that offers up 4 Positive Sales Boosting Ideas. 

Do the bean counters have you running for the hills ... cutting back on all your marketing expenditures?

Are results from your current marketing and promotional activities falling?

Do you have a tough times strategy in place?

Read more here.

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