Post by guest blogger Carl Saxon, Business Development Associate, PointClear.
A great way to thwart a lead or an opportunity is to stop asking questions and get into your informational session as to why your product or service is the best thing since sliced bread. What should be a common practice is to listen to the prospect’s words closely and then ask the next best question.
At PointClear, we practice active listening skills and use these skills as a major component to provide successful handoffs to our clients. Active listening helps you to clearly identify the SITUATION and the PROBLEM so you can then ask the next best appropriate cause questions that lead to the overall IMPACT and NEED questions. When practiced properly this leads to a smooth handoff to your client.
A bad example would be as follows:
You call a prospect and they immediately give you a couple of “surface” pain points. As I mentioned in a previous blog, some associates (and yes I am guilty also sometimes) want to pounce like a cat on a ball of yarn. We are set to close and we then immediately put the sales (features and benefits) hat on. After a minute of overwhelming the prospect with facts we say, “Well, what I would like to do is put you in contact with one our product specialists.” Low and behold, the prospect has questions.
A couple of things wrong here. One—who cares what we would like to do, it is about them not us. Two—we failed to ask the next best question either to clarify the situation or problem and to ask implication questions to determine need or desire.
Why not ask “Can you tell me a little more about the problem?”, “What pains does this problem cause?”, “How is that problem affecting you and the organization?”, or “If you resolved that problem how would it create a healthier environment?”
This gives you as the seller more control of the conversation and helps prevent or limit objections from being tossed at you because they are too busy now overwhelming you with facts.
Now instead of saying, ”Well, what I would like to do…”, you can say, “Based on what you have said…” in a more authoritative role versus a timid appointment setting role.
Remember—relevant questions are key to success. Controlling the conversation makes for an easier handoff and allows the prospect to verbalize their needs. If the seller says it, it is not necessarily true. If the prospect says it, then it must be true. In a sales lead transaction, he who makes the most statements loses control. “There is a sale made on every call you make.” (Yes. I stole it from the movie Boiler Room.)
About 50 miles north of PointClear’s Atlanta home is the site of the first major US gold rush that began in 1828. Legend has it that it was on the steps of the county courthouse there in 1849 that Dahlonega Mint assayer, Dr. M.F. Stephenson, tried to dissuade miners from moving on to the California Gold Rush by saying, "Why go to California? In that ridge lies more gold than man ever dreamt of. There's millions in it." Another story tells of Mark Twain hearing this second-hand and coming up with the more famous version for his fictional character, Mulberry Sellers: “There’s gold in them thar hills.”
Legend aside, a parallel exists in the form of unrefined “gold” that resides in sales lead databases. As companies generate sales prospect names from marketing initiatives like webinars, tradeshows, landing pages, website downloads and social media, a symptom of success is that marketing databases grow by hundreds and thousands of names.
The downside is that there is no intelligence about whether the names meet lead qualifying criteria like company size, target industry, decision maker title, business pain, budget and purchasing timeframe. There are far too many leads in the database for marketing to effectively contact and qualify the names, and sales’ focus on driving revenue rightly rules out culling through lists of hand-raisers.
The solution: an efficient and cost-effective contact strategy that systematically moves through the database and separates “gold” from “rock” by converting marketing responses into qualified leads. This activity is grounded in a precise market segmentation methodology to assure that all marketing and sales efforts are directed toward the highest performing targets via the most productive marketing initiatives.
Properly executed, a lead development program of this nature acts quickly to identify the real sales opportunities, keep sales focused on generating revenue and increase ROI on marketing investments.
If you’d like more information on this lead qualification and lead development approach, I invite you to download a recent case study from our website that illustrates our Lead2Value offering. The case study describes how we partnered with a publicly traded Southeast-based software company to convert 22% of its 20,754 raw lead database into qualified leads. As a result of PointClear’s lead development services, more than $2.2 million in new business has closed, and the client has added more than $23.4 million to the pipeline.
In the spirit of earlier comments from our assayer friend, Dr. Stephenson, I might add, “In that sales lead database lies more gold than man ever dreamt of. There's millions in it."
OK … your webinar came off without a hitch, and you’re experiencing a sense of relief. But right away you know there’s work to do around lead qualification and separating the 24 karat opportunities from the fool’s gold. The webinar “leads” are not qualified enough to be sent to the field. You also know some attendees are more qualified than others and require immediate contact—not just addition to email lists or entry in marketing automation programs.
The question arises: what are the best practices for following up on webinar attendees and registrants?
I’d like to share comments from a webinar …
Webinar Leads Demystified—Best Practices for Leveraging Both Webinar Registrants and Attendees
… my friend and colleague, Mac McIntosh, President, Mac McIntosh Inc., and I recently presented that identifies best webinar follow up practices.
Here are some of the recommendations:
1. Include all no-shows in follow up activity
With hectic schedules, a new priority may pop up and prevent attendance for a registrant. Send a follow up email with a link to the archived webinar, and include the no-show in follow up lead segmentation and lead qualification activity.
2. Segment and qualify attendees and registrants
Because some of the attendees are great prospects and some are not, it’s critical to build a segmentation and qualification model that identifies segments most likely to be qualified sales leads.
While a list of 1,000 target companies may generate a 5% lead rate, an analysis of results typically identifies segments with higher and lower lead rates. For example, let’s say there are five discrete segments of 200 companies each, and these segments have lead rates of 9%, 7%, 5%, 3% and 1% that—in total—average an overall 5% lead rate.
Following a webinar, we recommend enhancing attendee and registrant lists with data points like SIC code, revenue, employee size and growth rate. This added data helps segment the entire list into segments that range from “most likely” to “least likely” to buy. Test sample qualification calls validate the segments that have higher and lower lead rates.
Once segmented lead rates have been established through testing, a full court press should be deployed against the segments with the highest lead rates—thereby improving results and maximizing marketing dollars. Less expensive media are used to market to segments with lower lead rates, and periodic calls can be made into low priority samples to monitor buying trends.
3. Nurture, nurture, nurture
Mac noted during the webinar that about 25% of prospects bought solutions from his client companies within six months of engaging in the buying process. About 50% bought in seven to eighteen months, and about 25% bought more than 18 months out.
Lead nurturing and developing prospects have never been as important as they are now. As prospect leads move through the buying process, nurturing reinforces your working relationship, positions you as a trusted advisor, differentiates your offerings and builds a preference for your solutions.
Implementing a comprehensive lead nurturing methodology not only improves results—it assures highly compensated field resources are used efficiently and in a cost effective manner.
4. Think in multiples: multi-touch, multi-media, and multi-cycle contact
Results multiply when contact strategies are multiplied.
Multi-touch: Instead of three touches, think twelve or more contacts with a prospect. The optimal touchpoint frequency is higher than you think.
Multi-media: Successful follow up uses a smart mix of multiple media. Instead of just using the phone, integrate a number of outbound calls with voice mail messages, personalized email and direct mail.
Multi-cycle: With the largest portion of prospects buying at more than six months out, expand your planned contact from over a few days to over several weeks and several months.
5. Tailor your messaging to the reasons companies and people buy
Companies buy based on three conditions of need:
- Perceived risk of deterioration
- Opportunity to improve
- Fear of loss in their current situation
Individuals have different conditions of need:
- Recognition
- Financial gain
- Security
- Self actualization
Messaging to webinar prospect leads should vary based on what conditions of need they’re in. For example, a company perceives a risk of deteriorating conditions, and a decision maker there is acting out of a position of self actualization. This makes for a good selling opportunity as the decision maker wants to do the right thing to help the company and is willing to take a personal risk.
Vary messaging based on where prospects are with their company and personal conditions of need.
6. Match your sales effort to the prospect’s stage
There are five steps that must be sequentially addressed with prospects during the buying process:
- Find the pain
- Get agreement there is pain
- Agree to do something about the pain
- Agree to a generic solution
- Agree to a customized solution
Sales too frequently defaults to step five. Successful webinar follow up is based on confirming agreement on each step.
I’d like to invite you to share your best practices on following up on webinar prospects.
Note: The full webinar is archived and available for listening on the Target Marketing Magazine website via the hyperlinked title above.
There is a counter-intuitive relationship between lead volume and sales performance.
First, a context: today's economy is not being kind to sales professionals. Buyers are taking the initiative to educate themselves, holding onto cash and making purchasing decisions more slowly. Indeed, OneSource's 2010 B2B Sales Pulse Survey notes that 59% of sales professionals report current sales cycles are either significantly longer or somewhat longer than last year.
Conventional wisdom: more leads = more sales
With sales organizations facing lower numbers, it seems logical to turn to volume lead generation to fill their pipelines with more and more sales leads in hopes that some will turn into sales. After all, shouldn't more leads deliver more opportunities?
In reality, just the opposite often turns out to be true. Standard lead generation's focus on quantity—rather than quality—results in the following:
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The pipeline is flooded with a high volume of low-value leads.
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Qualifying criteria are rarely met due to lack of marketing resources.
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Sales reps' calendars are cluttered with unqualified meetings.
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Money is wasted on sales lead generation programs that don't work.
Downsides of a high-volume approach are widespread. A 2009 CSO Insights survey reported that senior sales executives rate just 35 percent of leads as "good" or "excellent," and 65 percent as "average" or "poor". And only 26 percent of sales executives surveyed were satisfied with the quality of leads received.
The sales lead paradox: fewer leads = more sales
The answer? Sales reps don't need more marketing leads. They need fewer sales leads—or more accurately, fewer raw, unfiltered, unqualified marketing leads. Conversely, they need leads that have been carefully qualified, properly and consistently nurtured and appropriately developed, increasing the likelihood of a completed sale.
By focusing sales resources on a smaller number of better quality leads, they can focus their time more effectively on the most likely buyers. Such a practice makes sense in any economic climate, but in our current market downturn it can be a way to actually improve efficiency and do more with fewer resources. This also renews the value of lead generation programs, since reps start receiving leads they can actually use.
Best-of-class prospect development—and its focus on fewer, higher qualified sales leads—fills forecasts with sales-ready buyers and helps marketing and sales resources operate more efficiently. In the end, it means great return on program investments and higher company revenue.
If you'd like to learn more about how fewer, yet better qualified, leads can empower sales, download the white paper, Why Your Sales Force Needs Fewer Marketing Leads.
I continue to marvel at the high number of companies that only use cost per lead as a basis for lead generation buying decisions.
I mean, I get the buzz around inbound marketing and marketing automation driving down the cost per lead. HubSpot's The State of Inbound Marketing 2010 survey found the average inbound cost per lead of $134 was 60% lower than the average outbound cost per lead of $332. (A side note—it's my sense that these dollar figures are skewed toward smaller company marketing spends as similar metrics for complex solution selling are significantly higher.)
With widespread distribution of stats like this, it wouldn't surprise me if I heard someone ask, "Why pay more than twice inbound's cost per lead for outbound leads?"
This logic—that something called a "lead" can and should be had at consistently lower price points where it will still deliver value—is at the root of a host of sales and marketing problems and deserves a closer look.
Putting three areas under the microscope illuminates apples-vs.-oranges factors and drives a corrective path around the "cost per lead" quagmire.
Lead definition is critical
As I mentioned in Part 1 of this blog series, Lead Generation 2.0: A Lead By Any Other Name, it's important for sales and marketing to agree on what a lead is.
Apples—Where a "lead" is a low level inquiry
The value of a lower cost per lead approach has merit early in the funnel where inbound marketing and marketing automation can be helpful in moving large numbers of prospects to raise their hands and express interest.
Oranges—Where a "lead" is a sales-ready buyer
But striving for a lower cost per lead when defining, developing and delivering a lead as a sales-ready buyer is a recipe for disaster. The high-volume initiatives marketing uses to generate big numbers simply can't be used because they don't include the personal communication and multi-touch engagement needed to validate qualifying criteria. Embracing a higher cost per lead in developing sales-ready buyers is as much a given as gravity.
The nature of the solution and selling process impact the cost per lead
In an earlier blog, I differentiated between two types of solutions and selling processes, and acceptable cost per lead will vary significantly based on the type.
Apples: Straightforward/Short/Low Solution Selling
Lower cost leads can be expected and are even necessary when the selling process is straightforward, the sales cycle is short and the investment is low. For example, it would be possible to generate a lead for a $10,000 piece of hardware for $350. Technical specifications are to the point, and the buying process may involve working directly with a single contact in a purchasing group.
Oranges: Complex/Long/High Solution Selling
Higher lead costs are expected when the selling process is complex, the sales cycle is long and the investment is high. Again, an example—a $250,000 software solution may require connecting with a CEO, a chief line of business officer and others. A business case may need to be built over time to drive a budget. The reality is generating a lead for a $250K software solution is going to be substantially more than generating a lead for a $10K hardware solution.
A reset on the best way to measure marketing performance
Using cost per lead to measure success incorrectly incents volume over quality.
Apples: Cost per lead as a metric
By its very nature, a cost per lead approach incents high volumes of leads—and ultimately adds costs when sales discovers many don't meet qualifying criteria.
Oranges: Cost per opportunity and cost per deal as metrics
While cost per lead may be a valid metric for high-volume, low-level prospect acquisition, cost per opportunity and cost per deal are better indexes when measuring initiatives for developing sales-ready buyers. These performance metrics are grounded—not in volume—but in opportunity quality, conversion ability and revenue generated on investment.
The reality is that leads cost what they cost—particularly in engaging and developing high-value opportunities in Complex/Long/High selling situations.
The next blog in the series builds on the importance of lead definition and getting beyond cost per lead blinders to see that fewer sales-ready leads that each cost more are a far better value than many poor-quality leads costing less.
When Gertrude Stein penned, "A rose is a rose is a rose," she was commenting on how essence is expressed in naming and how that naming calls up associated meanings.
Let's see how it works for B2B lead generation: a sales lead is a sales lead is a sales lead.
Surely all of us in sales and marketing are on the same page when it comes to the meaning of a "sales lead." If it were only so.
On good days, marketing forwards a lead to sales, and the sales representative finds a well-qualified prospect who meets established criteria and warrants immediate attention.
But, oh, those days of disconnects. Marketing's cover email to sales notes one of its initiatives has delivered a qualified lead. Yet when the sales representative contacts the prospect, he finds qualifying criteria overstated or reported by someone who can't actually make a decision and drive a budget.
Too often, marketing's take on a sales lead reads like this:
A sales lead is a contact is an inquiry is an interested self-educator.
And sales reps waste time on those "leads" when what they need reads like this:
A sales lead is a qualified sales opportunity is a sales-qualified lead is a sales-ready buyer.
Missing is a consensus on what a sales lead is. More specifically, the two groups need to identify and agree on ideal criteria for highly qualified sales opportunities that warrant attention from sales representatives.
An internal or external prospect development resource will address each and every one of the following criteria when delivering qualified prospects to the field:
- Vertical (SIC or NAICS code)
- Firmographics (revenue, # of employees or # of locations)
- Decision makers/influencers and respective roles in the decision-making process
- Environment (related to each solution—such as "technical environment")
- Decision maker level of engagement (engaged or referral but in the loop)
- Business issues/pains uncovered and validated
- Decision making process documented
- Budget allocated or process for establishing a budget documented
- Competitive landscape documented
- Sense of urgency or compelling event
Note that while it's important to address each of these criteria in the qualifying and nurturing process, not every one may be fully realized at handoff. For example, recent research is showing that many prospect firms become fully engaged in reviewing solutions without a budget in place. Business case strength will drive funding, and the lead is qualified based on engagement with the correct, empowered decision maker and compelling need.
So whether we use qualified sales opportunity, sales-qualified lead or sales-ready buyer, the important thing is that sales and marketing share a clear and concise definition of the criteria that qualify opportunities ready for handoff.
In subsequent installments of this series, these criteria are used to challenge assumptions around the perceived advantages of lower costs-per-lead (Part 2) and higher volumes of leads (Part 3).
And by the way, I would be remiss if I didn't allow Shakespeare to also weigh in on naming and associated meanings:
What's in a name?
That which we call a sales-ready buyer by any other name would smell as sweet.
Legacy lead generation and its once-sacred truisms like ...
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All sales leads from marketing should be followed up.
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Its critical to get to the lowest possible cost per lead.
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More leads are better because more leads mean more sales.
... are past their prime but continue to negatively impact the success and productivity of sales and marketing initiatives.
With this post, I'm introducing a series of blogs that look at three legacy concepts from a Lead Generation 2.0 perspective.
Part 1: A Lead By Any Other Name ...
The first blog looks at challenges that arise when sales and marketing don't agree on the definition of what a lead is. Ideal lead qualifying criteria are set forth to bridge this gap and clearly identify sales-ready buyers, the highly qualified sales opportunity that warrants attention from sales representatives.
Part 2: Comparing Cost-Per-Lead Apples & Oranges
The second challenges the logic that something called a "lead" can and should be had at consistently lower price points where it will still deliver value. In reality, the cost per lead is going to be driven by how a lead is defined, the nature of the solution and selling process and the type of metrics used to measure marketing performance.
Part 3: The Sales Lead Paradox: Less Is More
Given these tough economic times, one might think the best way to lift sales numbers is to turn to high-volume lead generation to fill pipelines with more and more leads. Not necessarily so. The third blog looks at the counter-intuitive relationship between lead volume and sales performance. Sales reps actually need fewer leads.
Companies don't fail because individuals in the company want to fail. Companies fail because employees don't know what the rules are. Companies that are guided by strong boundaries thrive by developing prospects and driving revenue. Companies loosely run, fail. Here are the ten things you need to do to ensure your company is successful:
1. Provide strong direction in sales lead management regarding market definition, offer dynamics and media mix, then reinforce that direction with strong sponsorship of appropriate activities and campaigns. As basic as it sounds, we work with companies every day that do not actually follow-through on this.
2. Get strategically involved in the marketing and sales planning process. You will be surprised at how much impact you can have.
3. Make sure that each and every prospect or customer "touch" meets strict standards that support the direction you have provided.
4. Stick to your guns. Once you've made a plan, don't change it based on a subtle market change or limited market research.
5. Hold marketing accountable for quality and value; make the sales force accountable for quality feedback and results.
6. Insist on regular, weekly reports. In most B2B companies the senior management team could and should review the status of every opportunity (their environment, what they're doing, their pain, who they're talking to). It would take just a couple of hours each week.
7. The sales force is driven by the "three C's": control, credit and compensation. Ironically, great prospect development programs are initially viewed as a threat by sales because of the "three C's". That is why you hear the following feedback on leads:
"No telemarketer can talk to the decision-makers I have to reach."
"I was already in that account and already talked to that decision-maker."
"The leads are really not worth what you are paying for them, just get me some names and I will engage the prospects."
These are not destructive, conscious objections. They are a natural reaction to the historical state of affairs and, as such, need to be addressed transparently and aggressively. Eventually, great sales people become great consumers of quality prospect development.
8. Insist on training. Start with the basics. Insist on self-education and participation in local and national events. This is a high payoff activity.
9. Set realistic expectations regarding timeframes and deliverables. Everything takes longer than you think. Quick solutions may make you happy for the moment, but you will eventually pay a price. Don't shoot the messenger who is trying to do the right thing and not the expedient thing.
10. Check your ego at the door. If something clearly isn't working, cut your losses, make the changes and move on.