Lead Nurturing

Are Inside Sales Departments good at Lead Generation/Lead Qualification?

Should you consider outsourcing to complement Inside Sales?

ETI clients often have Inside Sales (IS) departments.  

Typically Inside Sales are tasked with a range of responsibilities including (but not limited to) Supporting Field Sales, Customer Service, Account Management, Order handling and Processing as well as some Lead Generation, Lead Qualification and Lead Nurturing.  In some instances they also play a role in building and maintaining Partner relationships.  

IS reps are for the most part involved in passive activities such as responding to the needs of accounts and supporting field sales.  

When most managers spec out the job requirements for their IS staff you will find Lead Generation/ Lead Qualification high up on the list of requirements.  Yet, proactive Lead Generation and Lead Qualification somehow gravitates over a period of time to become a small(er) part of their actual activities.  

Now let’s define the typical traits of the IS staff:

  • Hunters are great at identifying and either bringing in new business - or at least generating and qualifying leads.

  • Farmers’ strength lies in nurturing and helping grow existing accounts.  In addition they frequently function in a ‘customer service’ role.

  • Gatherers’ wait for the low hanging fruit to fall into their lap.  

Rarely are IS reps highly effective at all aspects of Hunting, Farming and Gathering.  Most are more often excellent at the latter two with only a small percentage having the strength to undertake the grueling work of Hunters.  

Now let’s consider the traits of the personnel needed for the various types of Inside Sales activities:

   Traits
    Hunter Farmer Gatherer
A
c
t
i
v
i
v
t
i
e
s
Account Management Not a Match Good Match Not a Match
Customer Service Not a Match Good Match Good Match
Lead Generation Good Match Not a Match Not a Match
Lead Qualification Good Match Somewhat of a Match Good Match
Lead Nurturing Not a Match Good Match Somewhat of a Match

Another consideration is the IS Management Team.  It’s safe to assume that the team they build will be around their core competencies.  If their competency is in Customer Service and Account Management and not in Lead Generation then you will probably not have a department that is meeting its Lead Generation / Lead Qualification goals.  

It is rare to find an IS operation that is good at everything.  It is even more rare that it will be staffed with adequate resources to fit all its requirements.  

  • If you need it all then consider allowing the IS team to focus on a specific core competency - rather than trying to be all things to all people.  You can then outsource the missing elements to a company that has those core competencies and that can deliver results in quick order.  This can result in a major positive impact on your ROI.

At ETI we’ve had unparalleled success working with Inside Sales departments to maximize their productivity by providing the solutions they need to maximize their resources including all of the above activities.

We’d be happy to engage with you and explore how ETI, might compliment  your IS department.   Please call 1.800.466.4384 - select option 1.

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.

 

Why good sales people should be terrible at prospecting

Here is a simple proposition: When a sales person is selling, he or she is not identifying new opportunities. And that’s a good thing, because you always want your sales people to be actively selling.

The better the sales person, the greater the imperative to focus his or her attention exclusively on selling. It’s not that great sales people can’t prospect successfully. It’s just that they simply shouldn’t have the bandwidth available to do the job well.

Consistent prospecting requires organized, dedicated contact with prospect companies, initially to identify the right stakeholders and then to engage with them, cultivate a relationship, and build an in-depth understanding of their needs, challenges and aspirations. That’s a full-time job; it can’t be done well on a catch-as-catch-can basis. It’s not a “one day a week reserved for prospecting” kind of task.

And, it’s no secret that most sales people hate prospecting. They often find it demotivating and foreign to their primary skill set. Good sales people get “pumped” when they are eye to eye with a prospect, deeply engaged in problem identification and solving, not when they are “smiling and dialing.”

Put them in front of the right people with an identified need and interest and they are smack in the middle of their ideal milieu, with their juices flowing. That’s when they can be most productive — cultivating the relationship, building a foundation of trust and closing the sale — and that’s exactly what you pay them for.

So, if your sales people aren’t engaged in prospecting, how do you get it done?

You can either develop your own, internal, dedicated business development team or you can outsource the activity to a company that specializes in lead generation. The choice is up to you, and it’s a function of how you want to deploy your resources. There are arguments to be made in support of either choice.

The key variables to consider include whether or not you want to take on the responsibility and overhead of hiring employees and the associated costs and, if you go down that path, whether you will then have the flexibility to ramp up and down as needed to meet your seasonal needs — not as easy with an in-house team.

There’s also the matter of lost opportunity costs associated with sick time, vacations and turnover. You pay an outsourced partner only for what they are doing, not for lost time. Along with turnover comes the need to hire and train regularly (it becomes a revolving door).

Then there are the costs of management, equipment and systems (all of which have their own associated indirect costs). Most often, in-house solutions are more costly than outsourcing if you account for all direct, indirect, and lost opportunity costs.

But you may want to spend more to gain greater control, and owning the process internally certainly gives you that. Moreover, it's easier to facilitate communication and teamwork between your own employees than it is if you use an outsourced partner. And that's an important consideration.

And let’s not forget your brand and the image that is portrayed by those who are representing you to your prospect (and customer) base. Whether the solution is in-house or outsourced, that’s a critical variable that is too often overlooked. The cost of a bad connection between one of your representatives and a prospect or client is huge. You can’t overestimate the importance of professionalism and brand and product image.

So, whatever route you choose, be sure that your representation is professional enough to raise the esteem of your brand as well as accomplish the primary goal of generating qualified sales opportunities Ensure that your management structure is sufficient to mandate accountability from everyone involved, from those responsible for seeking out the opportunities to the sales people who must follow up if your investment is to have solid ROI.

Regardless of your choice, the lesson here is simple. Sales people are among your most expensive assets. Employing them to undertake work that can be more consistently and productively accomplished by a competent, dedicated prospecting team is both far more expensive and unproductive. Keeping them in front of the right people as often as possible is the best way to maximize their productivity as well as the return on your investment.

How Good is Your Sales Execution?

We have a valued client company that is expert in what they term “Retail Execution Solutions”. In essence, they enable large retailers to “have the right product in the right place at the right time.” While they do have some very powerful proprietary solutions, very few of the specific services they provide are truly unique. In fact, virtually every retailer is already conducting the standard activities that our client provides as services. They include inventory, space planning, shrinkage and supply chain audits and a program for site design and organization. Retailers may not be doing each of these activities as efficiently or effectively and cohesively as our client would, but these are all essential business practices that every retail operation must conduct to stay alive.

The unique aspect that our client brings is a highly systematic, integrated approach that enables them to link all of those disparate, essential activities, giving them the power to bring the results to bear on the full scope of their operations. Hence, the term “Retail Execution.” As I said before, it gives them the ability to “have the right product in the right place at the right time.”

As I was thinking about all of this, it dawned on me that what our client provides to retailers is analogous to what we provide to our clients. We provide “Sales Execution Solutions.”

Surely every company we work with is already doing the basics: generating leads, perhaps even pre-qualifying them, they have sales forces and, especially nowadays, they may have access to some kind of CRM to track their leads and sales activities.

They might want or need more leads, or better qualified leads. Or they may need help managing their database and tracking their prospects, leads and sales activities. And they may need to better understand their market or ways to develop new markets or bring new products to market. But the basics elements are there in order for them to survive.

So where does Sales Execution come into play? In the very same way our client supports their retailers: our deliverable is in providing clients with a systematic, repeatable, successful closed-loop process for growing revenue, developing and managing new business opportunities and targeting their marketing investment on vehicles that have the best potential for revenue growth and the successful development of their company.

By engaging with a company that focuses on Sales Execution (or enhancing sales productivity), you are focusing your sales resources precisely on those qualified prospects and customers that are ready to make a purchase decision in the near term (“the right contact in the right prospect company at the right time”).

There are many companies that can provide pieces of this kind of solution on an outsourced basis, some at a far lower cost than managing it internally. But the real trick is in creating an environment in which all of the pieces of the business development puzzle can work together, seamlessly, and one in which they augment one another to create true, powerful sales execution.

So, while “Retail Execution” enables a retail company to have the right product in the right place at the right time, “Sales Execution” enables a company to put their sales people in front of the right prospects at the right company at the right time.

I’d love your comments and questions.

A 25 year Milestone

Little did we know when we my wife Riki and my 2 sons then aged 6 and 4 arrived in the US in 1987, what an interesting and challenging thing it would be to become and succeed as an entrepreneur in the US. From our humble beginnings in a renovated barn in Greenburgh, NY to our current modern facilities in Valhalla, NY, we have continued to grow and thrive. And our family of clients and staff has also grown with us.

I’m happy to say ETI Sales Support continues to be at the forefront, in terms of technology as well as with the maturation of our unique approach to lead generation and lead qualification efforts in the B2B space. We continue to evolve, innovate and stay relevant. And, we are committed to do so in the future.

A word of thanks to all of our clients, employees and suppliers over the years. We may have created the environment, but without your support we could never have been successful.

Last night we celebrated in style at a local restaurant in Pleasantville. A good time was had by all!

~ mf

Is your channel partner selling your solution or someone else’s?

Are you confronted with a situation where a channel partner, who sells your solution as well as that of the competition's is favoring the competition? This happens all the time.

To help gain the upper hand, companies constantly come up with incentives to build direct relationships with channel partner sales people.  Relying on this strategy, however, leaves you at the whim of the channel's sales staff.  That’s not the best position to be in.

The most effective way to win consistently is to ensure you engage with the end user directly, and making sure that, when they’re ready to buy, your solution will be preferred.

That’s where an effective, ongoing lead generation effort focusing on your best targeted prospects comes in. By developing an organized ongoing lead generation effort you will achieve the following:

  • You'll build trust
  • You'll ensure that those involved in decision making are familiar with your solution and how it can best meet their needs
  • You'll lay the groundwork for the prospect to understand that your solutions is the best fit
  • You'll help promote your brand as the industry leader

When you build and nurture personal relationships consistently over time you’ll find that when prospects are ready to buy (i.e., to effect change) your company will be top of mind, the first to receive the call.

It’s an investment well worth making, and one that over time will beat the competition hands down.

Half of all sales inquiries are no good. The challenge is finding which half.

Guest post by James W. Obermayer, CEO of the Sales Lead Management Association www.salesleadmgmtassn.com. Well, this isn’t entirely true.  The actual number is 45% of all inquiries turn into a sale for someone.   When Mike Simon (founder of Inquiry Handling Service, now Harte Hanks) taught me that number, I was a wee communications manager just out of college.  The information changed my marketing and sales career.

Of course, I only half believed him that half of the inquiries I gave our salespeople at Beckman Instruments were as worthy as he contended.   I had to prove it to myself.

After completing several “Did You Buy Studies” (necessary because the salespeople reported back on only 25% of the inquiries given them), sure enough…45% of inquirers had bought something within one year (we surveyed inquirers that were 12 months old).  24-26% of inquirers bought something that were six months old (yep, we went to a different group).   And 12-15% of inquirers bought within three months from a different set only three months old.

Yes, we measured conversion from a single source (tied to avoid mixed sources), but always from a single point in time within 30 days.

Once we had these numbers, I started to report to management on the ROI from various lead generation sources.  That stirred up a few hornets.  Some sacred-cow lead generation sources were proved to be less than stellar, while some thought to be ‘fillers’ were purchasing more than expected.

The variable we found was us.  We knew that our lead generation activities found buyers, but with only 25% follow-up by our salespeople we were not participating in 75% of the opportunities.  Duh!

Simple variable, but oh so hard to change!

Increase follow-up and you will increase sales.   We found that increasing follow-up, by almost any means, increased sales.   Hence, the justified claims from marketing automation software and lead generation and qualification companies that their programs increased sales 200-300%.  No surprise there.

The lesson learned?  If you can’t get your salespeople to follow up 100% of the inquiries, find an outside firm to nurture the leads for you.  No budget?  Think about the lost opportunities.  Begging your salespeople to do the obvious usually doesn’t work.  Spend a few bucks and have professionals nurture the leads until each is sales ready.

Toss in nurturing with a marketing automation program and you’ll be beating 75% of your competitors.  Why only 75% you ask?  That’s because 25% have already figured out that half of the inquirers buy something from someone… and that someone is the person and company that follows up.

James Obermayer, Sales & Marketing 365, A year of wisdom at your fingertips, Racom Communications, Chicago, Il, Number 14 of 365 Tips & Tricks,  http://www.racombooks.com/

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?

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.

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

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.

Proactive LiveChat as a B2B Lead Generation/ Lead Qualification tool

LiveChat has been used primarily as a support tool on consumer-related sites.recently, however, B2B companies have begun using chat as a tool to enhance users’ experience on their websites. There are many people who are skeptical of the value of this tool ...

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.

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, continued: How to better define a qualified lead

Part two of a three-part blog: (See first part.)

In Part 1 of our three-part “BANT rant,” I began by raising some doubts about the efficacy of the BANT approach being the defining factor in determining a qualified sales opportunity.  I offered two main reasons why I felt that BANT wasn’t sufficient as a definition.

First and foremost, BANT offers a seller-centric perspective.  Budget, Authority, Need and Timing are not the ways in which buyers think, at least not with respect to purchases that are not commodities.  They think about business challenges, resources, relationships and the potential (and actual) consequences of action and inaction.  And organizational politics come into play, as tends to happen all too frequently with real people in real life, even when there is alignment within an organization as to goals and objectives.

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 decision will ever be made to purchase, or if that purchase decisions will be favorable to you.

Let’s look at each of the elements independently:

B (Budget) Plainly, if a prospect already has a defined budget, then you are probably too late to the party.  They may have already been in discussion with one or more of your competitors, and that’s how they came up with that budget..  Or they may have established a budget based upon some other basis (research), but it is not likely to be the budget you would preferably craft for them, nor does it consider the value of your solution (remember, it’s rarely about price and generally about value).

It’s akin to the RFP dilemma.  If a company has issued an RFP, and you were not involved in setting those standards, then it was established based upon a vision that did not include your solution.  And, unless your solution matches the requirements to a tee, you may not want to get involved.  RFP’s, for the most part, create commoditized procurement decisions, not value-based decisions.  If you are not selling a commodity, and if you don’t want a decision made essentially on the basis of price, then you need an opportunity to demonstrate your value.

The bottom line is that it may be preferable for them not to have a budget (just as you’d prefer them not to have an RFP).  Yet you do want them to have the resources needed to fund a solution to the needs they have and the challenges they are facing, preferably at a level that makes your solution affordable.

Ideally, however, you want to help them craft both a solution and a budget and you should want to be there before that process is initiated.  So, the very best time to get involved is before they have a budget and before they have envisioned a solution.

Given all of that, is Budget truly a qualifying criterion?  Now we’re left with ANT or, if we substitute Resources for Budget, we have RANT.

A (Authority) Most people assume that this means that you have identified or (preferably) are engaged with the decision-maker.  This is way too simplistic for the real world.  The problem is that, in virtually every situation imaginable (especially in a complex B2B setting), there is no single decision-maker.  Decisions are never made by a single person and, perhaps, never even by a single department.  The truth is that most enterprises have matrix relationships in which anyone, at virtually any level, can raise their hands and put the brakes on a decision or a shift in direction.

Even in small “mom and pop” businesses, decisions are rarely made by a single person, even the owner.  In almost every situation, there are trusted advisors, spouses, key staff and even business colleagues outside of the company who can influence a buying decision significantly.

What is vital is to gain an understanding of how decisions in areas related to your solution are made within organizations.  You need to know who is typically involved in that process and gain an understanding of the relationships (from both a personal and business perspective) among the key people involved.

Finally, you also want to understand another critical element:  the company’s orientation to change.  Is this a company that takes risks, or are they risk averse?  Are they somewhere in the middle?  Their orientation toward change will tell you a great deal more than you can imagine about the strategies you should employ to move them toward adopting your solution.

N (Need) Of all of the BANT elements, this is the most seller-centric of all.  I can’t begin to count all the times that a sales representative has come to me and said, “It’s a slam dunk … they NEED our solution.”  In the story I related at the end of the first segment about walking down the street at lunchtime on the way to a meeting, the need for food is clear.  We need it to live and we need it to satisfy and resolve pangs of hunger.  But, do we need it NOW?  It may be lunchtime, but there are competing needs and demands that have greater urgency at present and render that need less vital.

So, it’s not about need, it’s about some compelling event or reason that raises the urgency of that need to an “act now” level.  Absent that level of motivation, there is no credible impetus for change and no substantive reason for the resources to be expended, even if the money is available and someone is willing to spend it.

T (Time frame) This is also a seller-centric view.  What is really meant here is, “is this opportunity going to come to fruition in the near-term so it becomes worthwhile for me, as a salesperson, to spend my time on it?”  And, the truth is, in and of itself, it is meaningless.  Time is only important in the context of all of the other elements.

Do we have a compelling event?  Is everyone who is feeling the impact of this event involved in the decision making process?  Is there a solution out there that can resolve our problem using the resources we have available?  And, what is the consequence to us (as a company) if we fail to act timely?

Those are the more important determinants of the relative value of a potential sales opportunity.

In the third and last segment of this discussion, we’ll focus in on putting this all together into a practical framework.  And then, perhaps, we can begin to consider an answer to the question I raised at the end of my walk in the city at lunchtime story:  what can a proprietor do to get you to eat at his or her establishment?

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.

 

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.

The importance of the fulfillment note

Have you gone to a website … filled in a form to request further information on a product or service?  I have. In fact yesterday I went to a website that offered a solution I had an interest in purchasing and wanted pricing information.  When I clicked on the link it required me to fill out a detailed form – which I was happy to do.

I then received the following email:

“We have received your email message with the subject:

“Pricing Plan Information Request

“If you do not receive a response within 48 hours, please send your message again.

“Thank you,” Company Name

What a turn off.  Can you believe the last sentence?  They want me to get back to them if they could not be bothered to call me or send me the requested information.  Give me a break - their chances of getting my business are zilch, zero.

Here at ETI we primarily deliver outsourced lead generation and lead qualification solutions for clients. So we also often get what I call the dreaded ‘Send me more information’ request.  Generally speaking we recognize this is an attempt to get our Business Developer off the phone and we introduce some subtle responses to control the conversation and guide into a more meaningful direction.

However, that being said it is certainly necessary at times to send out information via email and it’s essential to do this professionally to move the prospect closer to the point where he or she may be ready to engage.  It certainly should not be done in a way that turns the prospect off!

Here are some rules we suggest you follow:

  1. Use plain text rather than HTML.
  2. Personalize.  Dear Mike or Dear Mr. Falkson is far more effective than impersonal mail that starts out ‘We have received your email message on the subject . . .”
  3. To ensure readership use a meaningful subject title which will be instantly recognized as relating to the discussion that motivated your email fulfillment.
  4. Be comprehensive.  The tendency to be very brief could be unproductive whereas longer but relevant personalized email (as also in personalized direct mail) is more effective.
  5. Add links to relevant content that help make your case.  Don’t include any that are not directly applicable.
  6. Maintain interest.  Suggest you’ll follow up with in the next day or so.  Include a direct line for the prospect to call you.
  7. The signatory must be a person with a name and a title.  Must be someone the prospect can reach out to via email or phone.

Some further guidelines:

  1. You need to track (if possible) email opens.  (Only possible from html email).
  2. You do need to track every click through and link it back to your prospect records in the CRM system.  In fact you may want to develop dynamic triggers that alert your Business Developers and other salesforce participants of the prospect’s click throughs and the content accessed.  Furthermore integration into a lead nurturing process can be extremely lucrative.�
    1. Develop metrics to calculate how many people converted into high level or regular sales prospects after receiving your email.
    2. Metrics should also enable tracking click through conversions.
    3. Consider hiring a free lance professional copywriter. Effective copy is at the heart of the matter and should be well worth the investment.

At ETI we take care of our client’s email fulfillment emails as part of our service.

We’ll be happy to talk to you about improving your sales lead generation and qualification programs. Call us at 1.800.466.4384 (914.747.3030) for more information.

The value of traditional outbound direct marketing

B2BOnline has just published an article written by me entitles 'The value of traditional outbound direct marketing'. Client here to view it.

 Michael Falkson

How ETI is embracing the new Social Networking tools and technologies to improve Lead Generation and Lead Qualification results

Having viewed the development of social networking in the past year from the sidelines I think it’s time I had my say. The main question needing an answer is, does Social Networking as a lead generation medium, work? 

Networking has always been an obvious way to develop business and business opportunities.  What’s more it’s very effective. However, the fact is that this activity is rapidly moving from the club or the golf course, or the local business network to the WEB.  This provides you with the opportunity to expand your contacts substantially, unhampered by geography or company size.

Networking for lead generation reminds me of the insurance sales rep who’s just out of training.  He’s all gung ho and motivated to make it happen.  Yet where does he first turn? To no one’s surprise he turns to his natural environment - his personal network.  First to the family, then to friends and acquaintances. Then to the prospects they recommend.

However, there’s no doubt that as he ventures farther afield to include strangers, his network will yield fewer genuine opportunities. Though he swims manfully against the stream, absent good luck the new recruit may not survive. His only hope for the future is to engage in an effective lead generation effort before his money runs out. Or to hope the company he works for will slip him a few sales ready leads to help him stay afloat.

LinkedIn

I’ve subscribed to a number of groups on LinkedIn these past few years. Frankly it’s been a big disappointment.  There are large numbers of participants out there trying to sell whatever it is they sell. They contribute nothing or very little to the dialogue.  Others are there to recruit.  These groups do seem to constitute fertile ground to find staff - much as happens in regular social networks.� From time to time I also notice people posting topics for discussion that are on point. But for the most part it’s fairly obvious that the questions posed are self serving - designed more than anything else to promote the reputation of the poster.

Twitter

Twitter is another phenomenon I have struggled with.  I suppose if you admire and respect someone and want to know what he/she is thinking or doing every day, then being a follower is useful.  On the other hand if you’re a thought leader on a particular subject – with many followers – it’s also likely that being a twitterer could be useful. 

I tend to think of myself as a thought leader.  I write, I hold a goodly variety of opinions and I’m capable of communicating thoughts to my clients and prospects via a variety of channels.  So I ask myself – do I want to sit and post tweets day in and day out for my followers?  Fact is I don’t and being a follower or being followed 24x7 is really not my thing.

There could however, be some potential in Twitter in terms of Lead Generation. But this depends how numerous your “follower” network is and how motivated they are to become buyers or recommenders.

How is ETI embracing the new networks to improve lead generation results for its clients?

eti’s primary business is focused on B2B (complex) lead generation.  Our ultimate goal is to to maximize client’s sales force productivity. Here then are some of the things we’re doing to exploit the new resources.

Firstly it needs to be appreciated that these networks are often fantastic information resources. That, technically, is the business we’re in.  Because we engage with prospects in consultative dialogues for the purpose of identifying information and characteristics which indicates the prospect’s ability and need to purchase our clients’ solutions.  To achieve that purpose our Business Developers actively participate in the networks to better understand the market places our clients do business in. 

Secondly, we link directly to these resources from i*collaborator - eti’s CRM/PRM framework. This enables us to search dynamically within LinkedIn, Plaxo and Facebook, to extract third party information that could be leveraged to reveal big fish prospects. Nor are we shy to hook smaller fish which have good growth potential.

Thirdly, we make these facilities directly available to our clients via their Opportunity Dashboards so that their sales persons are motivated to leverage the new opportunities without their having to do the research themselves. 

What else might we do?  Well we’re always open to new ideas and would welcome and appreciate your thoughts.

Conclusion

As a lead generation tool for the most part the networks mentioned remain on the periphery.  In their current incarnations they will probably not become mainstream lead generation tools.

However they do have enormous potential as tools to build influence and credibility. And that’s the best use of a network.  Because with that credibility will come the desired recommendations and referrals that will help you maximize your lead generation efforts.

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