ROI

How Effectively Are You Managing Your Valuable Leads?

Know Your Cost of Leads

Do you know how much it costs your company to generate profitable sales leads? The emphasis here is on profitable - because not all sales leads are profitable. Nor do they each cost the same. However, they represent good money you’ve spent to buy more sales opportunities for your sales force. 

Of course not all sales leads are born equal. They come in many shapes and sizes. From advertising, trade shows, seminars, direct mail, email promotions, teleprospecting and other promotions. Each lead costs you, and someone in your organization is comparing cost with revenue generated.

Effective Lead Qualification Essential

Generating an inquiry is of course the first step. The purpose of lead qualification is to turn them into prospects. And prospects into customers – hopefully lifelong customers.

All leads (at some point) must be qualified whether we like it or not. The sooner the better!  More often than not the most effective way is to outsource to an experienced sales support agency with a history of sales qualification success.  Why?  Because it’s unlikely you will develop an in house resource staffed with a dedicated and professional Business Development Team of the highest caliber that are focused entirely on the lead qualification process.  If you have (or create) an in-house resource to do this then your actual operational costs will be higher and profitability therefore will be lower.  

Some companies believe they can avoid the cost of qualification by turning the leads over to individual salespersons (or in some cases to the salespeople of their Channel Partners). A more effective solution is to pre-qualify and only have a salesperson engage once the potential exists for a sale. The salesperson - whose time is far more costly - can then focus his or her time entirely on the job of selling.  

Impact on sales force sales productivity can be as high as 400% when a salesforce is focused entirely on pre-qualified leads!

Leverage your CRM - Require feedback from your Salesforce

While many opportunities require immediate follow through (and the sooner the better!) others require multiple follow ups over an extended period of time before they mature. Salespersons without the support structure (i.e. a functioning and workable CRM) to manage and control future sales appointments may permit many of these qualified opportunities to gather dust and die.   On the other hand few companies who have CRM’s actually leverage them to maximize sales force productivity (a subject covered in other articles and blogs on the ETI site)!

Are you in control?

  • Do you know exactly, at any time, what happened to each sales lead you distributed ? To every salesperson or salesforce, VAR, channel partner, distributor? To every office in the U.S.? Worldwide? Last month? Last quarter? Last Year? Year before?
  • Do you know exactly how much each sales lead cost?
    • Per ad source?
    • Per VAR?
    • Per distributor?
    • Per salesperson?
    • Per area?
    • Do you know exactly how much sales volume each sales lead or source produced?
    • Which source generated the greatest number of sales? Per ad? Per month, season, period? Highest to lowest?
    • How much you profited?
    • Do you know which VAR, distributor, salesperson, is most efficient in terms of number of sales leads converted? Over any period? Highest to lowest?

Feedback, Feedback, Feedback

Feedback is the crucial element to successful lead management and tracking. Yet there are many salespersons, both in your direct and indirect sales forces who don’t understand the importance of disciplined feedback. As a result, they don’t provide the necessary status or progress reports on each sales lead for which they are responsible.

The consequence of this is that no CRM or equivalent will work for you. An exceedingly high price for a company to bear. Leads are the lifeblood of business. And since you’ve already incurred the high cost of generating and qualifying the leads, it is intolerable to lose the immediate and future business they represent. And you lose the rewards of lifetime sales. Worse, you aid the competition.

Effective Customer / Prospect Profiling (Part 2)

Imagining Business Profiling Nirvana

Sing along …

  • Imagine all those salespeople selling all the time.
  • Imagine their pipeline that is constantly being topped up with fresh “sales ready” opportunities.
  • Imagine if real ROI is positive.
  • Imagine your salespeople could be held to account for focusing on the prospects and accounts you want them to focus on (not just the low hanging fruit).

Let’s be honest.  You can imagine all you want but unless you have and own the business intelligence (data) to know the makeup of your account and prospect base, you have no real chance of attaining any semblance of Nirvana.

Nirvana (or something close to it) requires a determination and a commitment to deploy resources to achieve it.  Above all it requires a salesforce that is disciplined to focus their efforts on those prospects and or accounts that you (i.e. management) want them focused on because that is where the business and sales growth is going to come from.

Why do you think the military places such an emphasis on good intelligence? How about the importance the US government places on it by spending trillions on the CIA and NSA?  Why does the Financial Industry spend billions on analysts to research the companies they want to invest in?  They do it because if there is any sure way to winning a battle it’s knowing the enemy, their resources, their location/s, their tactics and their operational plans.  

So why is it that when it comes to business, so few companies invest significantly in business intelligence.  Some do research gathering statistics for trend analysis but very little is invested in deep strategic data about targeted and strategic accounts and prospects.

Ask yourself …

  • How well documented is your database (CRM or other database system) with strategic information of your top accounts?
    • Do you know the names and contact details of the key stakeholders?
    • Do you know all relevant locations / geographies that the account operates in?
    • Do you know the potential account size (not historical value)?
      • How confident are you that part of your marginal accounts are not in fact LARGE accounts purchasing from a competitor?
        • If so which competitor?
    • How much do you know about adaptation and potential usage (or the number of installations)?
    • Do you know about growth (or contraction) plans?
    • Is the data accessible to all sales and marketing resources?

If the answer is “.. we know very little” then you have an opportunity to change that by engaging in a structured and ongoing information and business intelligence building effort that will give you a leg up on the competition and will enable your sales and marketing operations to be laser focused by maximizing sales and marketing productivity to increase sales.

See Part 1 of this article

Be Smarter About Your Lead Qualification program

You have a fixed budget with little flexibility for expansion and want to develop a Lead Qualification effort to support your company's marketing inquiry generating activities (top of funnel) to maximize sales (force) productivity. Your choices:

  • Touch all inquiries by deploying a low cost agency and risk losing significant opportunities
  • Or ... Maximize Inquiry Conversions to HQLs (Highly Qualified Leads) i.e Optimize the budget to maximize ROI.

Let’s take a look.

Assumptions:

  • Annual budget of $200k
  • Monthly volume of inquiries (hand raises) - 2,000 from a variety of sources:
  • Inbound calls
  • Webform Posts
  • Whitepaper download
  • Email responses
  • Webinar attendance
  • etc.

Two agencies

  • Agency A: Best of Breed company
    • Higher cost  (See details below)
    • Agency B
      • Low cost
      • Possibly offshore

Let’s examine why what costs less might actually cost more.

roisimulation
roisimulation

Conclusion:

  • Agency A nets almost 100% more revenue that Agency B
  • Double the ROI

Note:  The variables and circumstances in your case may differ.  However, in my own experience a B type agency has never bested ETI (a best of breed company) on ROI.

Interested in evaluating your lead qualification program?  Or plugging your variables into this model? We’ll be more than happy to give you a fair analysis of how working with a Best of Breed company like ETI will impact your bottom line.  Please call 1.800.466.4ETI and we’ll be happy to provide an analysis of your existing program.

*Agency A

  • Best of Breed
  • Higher cost basis with greater deliverables
  • Smart well educated (university graduates)
  • Little - or no - significant churn
    • Stable Business Development staff
    • Onshore
    • Deep understanding (and experience) with business culture
    • Great familiarity navigating large enterprises
    • Very comfortable interacting with high level executives (C Level)
    • Not scripted
      • Approach is consultative
      • Results in identification of larger sales opportunities
      • Shorter sales cycles
      • State of the art technology platform to support the effort
      • Realtime visibility to all activities on your behalf
      • 24X7 Reporting Portal
      • CRM and Marketing Automation Platform integration
      • Promote and extend your brand

**Agency B:

  • Lower cost
  • Lower quality staffing usually referred to as “agents”
  • High staff churn
  • Frequent need to provision additional training
  • If product is complex (i.e. not a commodity) then is this agency capable of communicating your value proposition
  • Do not know how to navigate across large enterprises
  • Highly scripted
  • Not comfortable with consultative conversations
  • Limited technical capacity
  • Poor brand representation
  • Possible (irreparable) harm may be caused due to non-professional representation

*** MQL - Marketing Qualified Leads ****SQL - Sales Qualified Leads

Can a highly qualified lead EVER be worth $500?

The other day I received an invitation from a group moderator on LinkedIn to weigh in on a discussion in his group on the topic “Can a highly qualified lead EVER be worth $500?” It seems that they had conducted a group survey that showed that, despite the fact over 55% of respondents said they get more than $10,000 in revenue from the average customer in a given year, only 8.8% of the survey participants felt that they would be willing to pay $500 for a super-duper qualified B2B lead.

He asked me “Why do you think so few companies are willing to pay $500 for a highly qualified lead? Have leads simply become passé? Do few companies even know what to do with good leads to begin with?”

My response went something like this:

It seems to me that some of the respondents to your question spoke to some of the metrics that matter such as closing ratios, acquisition cost and margins; others raised the issue of trust (also extremely important). I didn't see anyone address lifetime value of a new relationship or even ROI (perhaps I gave up reading too soon). In my view, those are more important issues (along with trust). But they are still beside the point.

The basic flaw in the question is why does the cost of a lead matter at all? Buying leads, no matter how qualified, is a bottom-feeding strategy doomed to failure.

The key to lasting business development success is in investing in building a systematic methodology for touching prospects proactively, profiling their interests and challenges (what keeps them up at night), raising their awareness of your brand and solutions and building their trust and nurturing a relationship by engaging them in ways in which they can address successfully those things that disturb their sleep and the areas in which they have expressed interest.

The objective should NOT be to buy prospects, not matter how qualified. It should be driven toward investing in a growing prospect pipeline that will feed and nurture your company for many years to come, and has the potential to retain those clients for the long term once they have been converted from prospect status to client. The argument is akin to the analogy of providing a hungry person with a fish rather than teaching them how to fish so they never have to ask you for food again.

In the final analysis, a thoughtful lead generation buyer (and seller) should move their focus away from cost per lead (or even acquisition cost, which is far more meaningful) to infrastructure investment. Move the focus from one-off outcomes to a built to last solution and you'll change the tenor of the dialogue significantly.

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.

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.

Do you have a strategy to maximize participation in your upcoming event?

How much are you investing in organizing and conducting events such as Trade Shows, Webinars, Seminars and conferences?  Do you have a plan for maximizing attendance and optimizing the ROI on that investment?Quite often, companies feel compelled to create and attend events, in spite of their high cost and (all too) frequently low ROI, because that’s what their competition is doing. Instead of developing a plan to maximize the ROI on their investment they choose, instead, to reduce their investment to a bare minimum. The strategy is just to be there to "show their faces."

That investment has now been reduced to a cost of doing business and is quite unlikely to provide any tangible return at all.At eti, we provide a range of support services designed to maximize attendance in their events.    And optimize their investments, big or small.  Over the years we’ve had some great success in “lifting” average attendance by as much as 100%  or more by engaging in a systematic person-to-person interaction with key prospects.  And we’ve also had success in identifying qualified sales opportunities as a by-product of that process.  So our client gets more eyes and ears for their message and some fully qualified sales opportunities to boot that might otherwise not have been identified as quickly (if at all).

Successes such as this require a cohesive strategy up front.  So here are some simple suggestions that you may want to think about when planning your next event.  (Just to be clear the ideas here refer to direct event recruitment not PR and marketing promotional activity which are also essential to enhancing success)

Integrated Email/Telemarketing Tactics

  • Start early (6 weeks out) and email often�
    • Incentives
      • Offer an early bird discount to motivate early registration
      • Offer a volume registration discount
    • Segment your list.
      • Mail less to known customers and prospects.  No need to inundate the ones that already respect your brand and have your solutions (unless the purpose of the event is specifically directed at clients)
      • Mail more to ‘cold’ prospects to promote both your brand as well as the event
    • Mail weekly for 2-3 weeks to the same audience making sure to remove registrants and opt outs before production
    • Provide a toll free hotline for prospects to call .. ask questions and register.  Or better still if they can’t attend then to let you know they have a need
      • Have an infrastructure ready and trained to handle these inquiries
    • Make sure to track email opens and click throughs and leverage the data to increase registration
      • Orchestrate an outbound call to people who clicked through to the website but did not register
    • Outbound calling effort to focus on the 20% that will produce 80% of the revenue to start immediately after the first email
      • Develop custom call guides
        • Track why prospects respond positively or not to your offer
        • Gather market intelligence on what would attract prospects to future events
        • Capture new contacts and verify that emails have reached the prospects you targeted andthat they are the correct targets
      • Extend the above offers
        • Trade shows specific …
          • Offer an exclusive appointment with key executives.
          • If you’re having an extra event (party) invite your key prospects personally.
          • Focus on geography.  It’s more likely you will get greater attendance from the key executives you want to talk to, if they do not have to travel great distances.
      • Confirm registrations 24 hours before the event

After the event:

Depending on the type of event you should consider including the following in your post event tactics in order to maximize ROI by identifying “sales ready” prospects and nurturing those that may convert over time.

Trade Shows:

  • Segment the prospects: Actual discussions or registrations at the booth

    • These prospects should be called via an outbound effort ASAP.
    • Time here is of the essence (within 24-48 hours is ideal) as it is likely these prospects are also looking at your competitors.
  • Dropped card in the bowl
    • Less productive segment.
    • Send an email with thanks for visiting and then test an outbound calling strategy to evaluate the quality of these inquiries.
  • Trade Show attendees
    • Unless able to be segmented these lists rarely are productive.
    • However, a low cost outbound email as well as and some outbound calling may be productive in some circumstances and should be tested
  • Webinars/Seminars/Conferences:
    • Attendees:
      • Email immediately after the event thanking them for attending
      • Conduct an outbound program to further qualify interest and sales potential
      • Those participants who represent the 20% that could generate 80% of the revenues should be called within 48 hours.
    • Non Attendees:
      • Email … “Sorry you could not make it …”
      • Call, qualify, stimulate interest and awareness and drive into your lead pipeline
        • Note:  eti’s experience is that non-attendees often produce better qualified leads/opportunities than the attendee group.  Ignore these prospects at your own risk.

eti has significant experience managing the entire recruitment effort.  As well as the post event lead generation elements.  IN addition, we offer a comprehensive registration capability to manage multiple events/locations and more.  Please call us on 1.800.466.4384 to discuss how ETI can help you maximize your event ROI.

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.

MIT Sloan Sales Conference 2009 - Sell or Sink: Navigate the Crisis

MIT Sloan School Of Business Sales COnference We're pleased to announce that I will be hosting a workshop entitled Tough Times Demand Smarter Sales Strategies at this year's MIT Sloan Sales Conference which is to be held on April 17th, 2009 in Cambridge, MA.

Workshop Description:

Keeping your business afloat in tough times requires disciplined sales strategies to prevent being overwhelmed.

Most companies have areas of weakness in their sales and marketing processes.  When times are good, no one wants to upset the applecart so there’s less incentive to be introspective.

Tough times present a good opportunity to examine areas within your company most likely to benefit from introspective examination.   In the current environment, where fewer dollars are chasing fewer prospects in smaller and shrinking marketplaces, some questions virtually ask themselves.

In this session we’ll explore:

• Whether the sales organization is coping with the downturn.

•  Whether the sales opportunity pipeline is filled with genuine sales ready opportunities.

• Whether there is a solution to decreasing New Customer Acquisition (NCA) closing rates.

• Whether the marketing teams are fully aligned to sales’ needs.  

• Whether marketing and sales are ROI accountable.

• Whether there are leaks in the sales opportunity pipelines and, if so, how you can minimize their impact.

We’ll also take a hard look at marketing activity, lead generation, lead qualification and lead nurturing and how they can have a marked impact on maximizing sales productivity. 

To register click here.

Is the PHONE a marketing medium?

The origin of telemarketing (TM) may be lost in the mists of time. Lots of folk credit Murray Roman for being the father of telemarketing but I don’t believe he ever confirmed parenthood. As an executive for the Ford company however, he was involved in the first mass telephone campaign in 1964. Vance Packard in his “The Naked Society” wrote about the 20 million phone calls which Ford then made. Packard was not altogether complimentary even though the campaign produced a magnificent result for Ford. Ford’s success quite likely sparked the entry of business into this direct marketing medium. 

The basic concept of TM was much like that of direct mail … deliver a consistent message to a generally uniform audience and the response will be measurable.  If you sent out 10, 000 advertising packages and received 200 responses you could extrapolate that 2% by mailing a million to the same quality list and geography.

This applied equally to outbound telemarketing.  If one called 1000 similar prospects with a similarly consistent message (script) then this too became a measurable marketing medium.  And it worked, sometimes better, sometimes worse depending on the ability of your callers to conduct proficient conversations with decision makers.

The medium was embraced early on by consumer direct marketers who built large phone banks to organize their calls. And it did not take long for the medium to start irritating consumers. Calls were being made during the evenings and weekends.  They were rigorously scripted and for the most part high pressured. There were also many scams. Sure enough everyone who operated a TM service was soon tainted with the bad reputation of the medium. 

Newspapers whipped up a frenzy of fury – partly due to a loss of revenue no doubt. Ironically, many of them were later to become the biggest users in an attempt to build subscriptions, to regain lost subscribers, and even to solicit advertising. In 1996 my company, Effective Telemarketing Inc. changed its name to ETI Sales Support simply because it just became pain-in-the-neck embarrassing to be tainted by the consumer side of the medium. Especially as we never operated in the consumer sphere.  Our focus was and has always been in the domain of B2B.

With the advent of the ‘Do Not Call’ lists initiated early on by the Direct Marketing Association and later endorsed by the Federal Government, this negativity has markedly decreased.

So is the phone a marketing medium?  Especially as it pertains in the B2B marketing space?

The answer is definitely a huge yes.  And an enormously successful one too.

When looking to generate B2B Sales Leads here are some pointers to bear in mind.

  • Messaging: – Although in our world (B2B Lead Generation and Lead Qualification) the communication is consultative (i.e. not scripted) in nature it is still consistent from prospect to prospect and market to market.  This allows one to measure results and data accurately.  Furthermore, these results are fully projectable.
  • Interactive medium:  No other form of direct communication allows for instantaneous two way communication with a prospect.  All other media facilitate an entirely one sided communication.  Take a moment to consider the power of such personal  interaction:
    • Best way to identify and talk to the decision making authority
      • Only dynamic medium that allows you to navigate within an organization to identify the true decision maker/s.
    • Best way to motivate purchasing interest of the decision maker
    •  Best way to respond to questions or objections
    • Immediate ability to probe for need and pain
    • Immediate ability to confirm
      • Real interest
      • Appointments
      • Orders
      • Webinar/Seminar registrations
      • Etc Etc.
  • Brand: You never get a better chance to make a first impression.  (While many may think that brand might be compromised by a phone call, it’s my firm opinion that when handled correctly, brand image can be enhanced by such a communication.)
  • Actionable Business Intelligence:  Because the telephone is interactive in gathering business intelligence and data in real time, one can measure the data quickly and effectively. This effectively allows clients to manage follow up processes (by sales or sales lead nurturing systems).
  • Flexibility:  With a smart nimble business developement team one realign and modify call guides.  One can also customize the message as it pertains to different market segments and audience types.
  • TM will produce about 4-10 times the result of direct mail alone. And as much as 1,000% more than permission based email blasts.
  • Testing is possible and desirable.
    • Test various messaging approaches.
    • Testing different market segments can be quick and effective.
      • By vertical (SIC classifications)
      • Company size (employee and or revenue)
      • By product usage.
      • By geography
      • Etc.

So yes … B2B Telemarketing is a marketing highly effective medium and one that should be preferred when the objective is New Customer Acquisition.

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

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

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

 Speed to lead

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

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

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

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

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

Telephone fairs well in media comparisons

There’s an interesting article in the July edition of B2B Magazine titled ‘Use of Digital Media Rising’ by Carol Krol. The writer focuses on the findings in “The Integrated Marketing Media Mix” report published June 2008, by the Direct Marketing Association’s. It’s the first report of its kind undertaken by the trade association .

.

dma media analysis

Two items are noteworthy:

  •  DMA’s research shows telephone usage ranking 6th out of the 18 media listed, with 31.9% of companies employing this medium in their integrated marketing campaigns.
  • Based on the aspect of media efficiency, email ROI returned 100% more than the revenue share (1.93) relative to its share of budget.  Only telephone did better than average in the offline media, at a 1.20 share.

Although these numbers are great I suspect the email media effeciency ratings do not take into account the cost of lead qualification from email generated inquiries so it may be that telephone (which would already include these costs)  comes out even higher than email.  In fact I’m pretty sure that would be the case.

Mike

Value of Trade Shows Leads/Inquiries in Acquiring New Customers

Trade Shows are an important marketing tool for many companies. Aside from the obvious PR need to be seen at notable exhibitions, companies also hope to conclude business deals. The basic objective however, is to gather high quality sales leads resulting from conversations with prospects who’ve stopped by for information.

These leads need to be contacted and qualified for the sales force via a proper lead qualification and intelligence gathering process.

It’s essential to ascertain that all those important trade show leads return a positive ROI.  You need to know whether the result of your investment in trade shows to generate leads are worth it. Because not all sales leads are equal.  That maxim surely holds true for:

  • trade show attendees who’ve actually engaged your staff in discussions, and . . .
  • those who’ve mostly thrown business their business cards into the bowl for the free prize.

You’ll not be surprised to learn that those who’ve spoken to your sales personnel at the booth turn out to have the best sales potential.  But that does not mean there’s not a whole raft of profitable opportunities in other categories. Pooling some results from some of eti’s major accounts over past years, here’s what we’ve found:

  • Prospects who’ve actually talked with sales personnel convert at the highest rate. Our results have fluctuated from 10% to as high as 50%!
  • Attendee lists produce a conversion ratio of up to 2-5%.
  • Incentive related inquiries (Business Cards in the  bowl for a free prize) produce the lowest result, as may be expected. Their interest is mainly the incentive or prizes on offer … not (necessarily) in the benefits of your products or services. Nevertheless our clients have found 3-5% profitable prospects in this category.

It’s all a matter of economics.

Much depends on what you’re selling and the value of the average new customer to your company.  (See my related opinion item “What Costs Less Costs More” in this blog.)

Here are 5 suggestions you may want to consider when next exhibiting at a show:

  1. Invite your best prospects to a pre-scheduled meeting at the booth.  (Yes an appointment.)
  2. Remind prospects and clients that you’ll be exhibiting.  Maybe offer them an incentive to stop by and say hello.  Or create excitement by announcing a new/improved product launch etc.
  3. At the booth make sure your sales staff have the ability to quickly scan in prospect names into the computer and be sure to document any important information about their needs. a. Identify and record decision making authority. b. Quantify likely purchasing volume. c. Budget
  4. Speed of follow up is critical because your prospects are visiting competitor booths too. So follow up immediately next day, to qualify and confirm the sales potential.  You can electronically upload these prospects to ETI for example for next day qualification and fulfillment.
  5. Prospects not yet ‘ready to buy’ need to be held in a formal structure for lead nurturing purposes until their real sales need becomes evident.

Incidentally, we’ve recently started promoting the idea to our trade show clients to have another glass bowl available for business cards from interested attendees who would prefer the exhibitor to send the company’s information, rather than burden them with more stuff to carry. This bowl to be very clearly labeled with a message reading:

" Drop your business card here if you'd prefer us to send you our information. Thank you."

Similarly you could have a bowl offering to have a sales person contact them.  Not great but a suitable conpromise if you're short staffed.

For more specific ideas on maximizing your trade show investments call us at 1.800.466.4384.

Caution: Costly Advertising No Guarantee of Profitable Inquiries

If you don’t test to verify the results of your advertising the result could be an unnecessary waste of money spent on bad advertising. Experienced direct marketers wouldn’t dream of big expenditures without testing. It’s integral to their culture. They are very concerned to know the cost per inquiry and the cost per inquiry converted. These results guide their advertising spend.  This discipline also ensures that dollars are spent only on strategies and tactics that produce meaningful cost effective results. They are careful not to waste dollars on projects that don’t work.

The long and short of testing is that you don’t have to spend millions on ads which don’t generate enough profitable inquiries. You can tell as much after the first 2 or 3 ads. So why throw good money after bad?

Same goes for the business we’re in, namely New Customer Acquisition, based on Lead Generation and Sales Conversion. Moreover testing with ETI can provide projectable results in just a few hundred hours.  And at a fraction of the cost of the big spend usually required by advertising agencies.

If the campaign does not produce profitable results you change it and refine your strategy until you come up with a winning combination.  Sometimes when executing a major campaign in a variety of media - using gung-ho agencies - you find yourself spending a lot more before discovering that  results don’t justify expenditure.

It is always worth comparing sales leads costs generated directly by outbound telemarketing. Our own experience in such side by side comparisons is, invariably, that we can deliver far better results at much lower cost.

To illustrate this point we recently had the opportunity of making such direct comparisons for a major technology client. In the first instance the client’s campaign consisted of a series of promotional operations which included WEB based banner advertising, broadcast email, direct mail, PR as well as some events.  The campaign was managed by the client’s campaign management team of 3 people, and carried out by the client’s direct marketing agency.

Here is a concise analysis of results, measured against a later campaign by eti:

A.  Client’s Demand Generation Campaign:

Demand generation investment: 

$227,000+

Inquiries received

467

Cost per inquiry

$486

Leads qualified and accepted by sales

35

Cost per lead assigned

$6,486 (All costs divided by qualified leads)

Not a great result especially when you factor in the management overhead.  To be conservative we will add 20% for overhead which brings us to an overall cost of $272,400 or $7,783 per assigned opportunity. (I believe actual overhead was closer to 33%.)

Projected revenue from these leads was only $340,000 (20% conversion rate at an average of $50,000 per sale). ROI was decidedly negative.

B.   eti’s Lead Generation / Business Development project:

A comparative outbound business development effort was undertaken by ETI over a 2 year period for the same client.  The program consisted of cold calling into a relatively well defined target markets to identify opportunities and qualify leads.  There was virtually no client overhead.

Lead Generation investment 

$180,000

Leads qualified and accepted by sales

181

Cost per lead assigned

$994

Now this is clearly a much better result – by a factor of 6 to 1.  However, even though there was virtually no client overhead I will, to be entirely fair, add 20% for overhead.  Total cost is then $216,000, or $1,193 per lead.  That’s still 85% lower on a cost per result basis than the above demand generation example. But that’s not all since projected revenues from these leads is a cool $1,8 million.  That’s an ROI of $8+ for every dollar spent compared to a loss in the example above. WOW!

Furthermore, we knew what the ultimate result would be after a test which only required an investment of only $20,000+.

So what are the takeaways?

  • Don’t get caught up in the hype, fancy presentations and pretty pictures.
  • Test the various approaches and only rollout the winner.
  • Always test with the best:
    • The best target markets
    • The best products
    • The best sales people
    • The best business development agency
    • The best management team
  • Etc.

Conclusions:

  • If the best does not succeed – anything less can only lose.
  • Reassign ineffective campaign management incapable of effecting high quality customer acquisition at profitable ROI.

Can ETI do as much for you? Yes I believe we can. Call us at 1.800.466.4384 (914.747.3030) to start a purposeful conversation about how ETI can increase your sales revenue while reducing your ad costs.

Aberdeen Research - B2B Teleservices Study Released

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

The following press release provides some background.

B2B TELESERVICES: THE 2008 BUYER’S GUIDE

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

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

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

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

To obtain a complimentary copy, visit:

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

 

Michael Falkson

Electronic lead nurturing

Anne Holland from Marketing Sherpa recently posted an interesting piece entitled ‘The perils of moving entirely to electronic statements & customer touches.’ When it comes to customer service and account management, I cannot agree more with Anne.  There is simply nothing better than the human touch.

When it comes to lead nurturing, there is also a tendency to try to automate and deliver content electronically.  On a cost per cost comparison this certainly makes sense because the cost of email is nothing compared to the cost of having a person calling one up by phone.

The only problem is the result. My guess is nil, nada, zilch, zero.

Few studies have been done on the subject but  were I a betting man I would guess that only very small percentage of electronic touches are ever seen by your customers or prospects - regardless whether you agreed to receive mail from the sender. And once the receiver’s spam prevention program classifies you as a spam sender you’re just going to be spinning your wheels.

In the lead nurturing business there is simply nothing more effective than a one on one interactive dialog designed to enhance the brand and build trust.  It is the only method that ensures the message you want to communicate is delivered to the right person effectively and interactively. 

Result-wise there is simply no substitute for the human touch.

Michael Falkson

eti Sales Support sponsors MIT Sloan School of Business Sales Conference

eti Sales Support is proud to again sponsor this spectacular sales driven leadership event to be hosted by the MIT Sloan School of Business. The conference focuses on proven science and strategies of champion rainmakers from leading experts and prominent academics.  MIT Sloan School Of Business Sales COnference 

The conference offers you the opportunity to participate in lively panel discussions, learn powerful new sales strategies, and network with senior executives and top business students.

Join over 400 senior executives, entrepreneurs, professors, and graduate students from leading business schools at this unique event. This event will sell out so Register now to reserve your spot at this event.

Who: Anyone who understands the critical importance of sales.

Attendees: C-Level Executives, sales professionals, entrepreneurs, venture capitalists, and professors, MBAs, PhDs, and graduate students from leading institutions in a fully interactive forum to learn network, and share ideas and best practices.

Features:

  • Prominent keynote speakers, including
    • Andy Mattes, SVP of Enterprise Sales, Hewlett Packard
    • Greg Schofield, EVP of Global Sales, Novartis
  • Panel discussions with leading sales executives and management experts
  • Highlights include topics such as ...
    • Lead Generation
    • Lead Qualification
    • Lead Nurturing
    • Sales Automation and Management
    • Enterprise Sales: Winning Complex Large Accounts
    • Leading the High Performance Sales Team
    • And much much more

For more information or the register click here.

Why bother with RFP’s

Seth Goldin just posted a very insightful blog concerning resumes.

“A resume,” he says, “is an excuse to reject you. Once you send me your resume, I can say, "oh, they're missing this or they're missing that," and boom, you're out.”

I believe Godin’s insight applies equally when a client notifies you that he intends calling for RFPs and asks you also to participate.

I can understand this when the sale of commodities is involved. But it has to be different where services are being bought. Because services involve standards and these do not lend themselves to straightforward comparisons.

Take a very simple situation of the business we’re in. The essence of our service is to investigate the target market for clients and to qualify and define the ‘ready to buy’ new customers. This involves much research, phone discussions, questions, answers and evaluation. All of which take up scads of time and one can simply not enter the cumulative set of activities into columns on a spreadsheet.

Godin’s point holds just as true for RFP’s.   It’s just an excuse to pigeonhole you as another commodity.

He goes on to say ….

“Great jobs, world class jobs, jobs people kill for... those jobs don't get filled by people emailing in resumes. Ever.”

The same goes for selecting a new service provider.  Rarely are great solutions delivered by those who present well written responses to RFP’s. Offer and execution are not the same.

Michael Falkson

(See also Purchasing Business Development Services by RFP).

Leads don’t sell. Only sales people do.

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

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

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

Click here for the full text.

Michael Falkson

What costs less costs more

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

Michae Falkson

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