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The trouble in the financial markets is finally making its way to the “rest of us”. A recent article from Business Week highlights what we in sales and marketing have been bracing for; the inevitable cutbacks. Since marketing is often considered “non essential” for operations by many executives, these budgets are almost always trimmed first. We have heard from clients and prospects alike that have had to scale back their budgeting plans for next year as a result. There are some effective defensive measures for diligent marketers.
Quantify the Data
Knowing that your budget will be analyzed with the efficiency of Israeli airport security, being able to quickly produce data supporting your most productive marketing programs will be critical as decisions to cut can often be made quickly.
Be Noticed
The natural instinct in tough times might be to not “rock the boat”. This will certainly lead to disaster. Being sure that the executive team is aware of recent success is extremely critical as cutting decisions often occur behind closed doors. Having data to plead your case may not help if the decision has been made and a consensus already reached by the executive team.
Have Alternatives Ready
Be ready to counter cuts with alternatives. When asked to cut a position, see if you can outsource for a portion of the cost to get similar benefits. The important thing is to show reasonable chances for success and increased revenue at reduced costs to get buy in. If you are not ready with alternatives, again it may be too late to counter after the fact.
Hopefully, with a little preparedness you can defend your budget and salvage as much as possible.
Originally I was not going to mention my open heart surgery on this blog. I have changed my mind due to the shear amount of people there are to update. I have had so much support from employees, clients, and friends, and have decided to use the blog as the venue to keep everyone updated. This will also help to limit the amount of time talking about my experience on conference calls, for which I will have more limited time to spend over the next few weeks. (Doctor’s orders are to give up 60+ hour work weeks for a while).
As many know, I was born with a congenital defect in my aortic valve that was surgically repaired when I was 6 years old. Since then I have had no problems. That being said, we always knew at some point a replacement was likely. Last march I ended up with a heart valve infection called endocarditis as a result of the abnormal valve I was born with. This is a very dangerous condition that can result in stroke and death. I was treated for several months but we were unable to stop brain lesions from continuing to reform. The decision was finally made to replace the aortic valve and a piece of the aortic root that had turned into a 5cm aneurysm. This is really an amazing surgery because beyond having to use a bypass machine, aortic root replacement requires complete circulatory arrest (0 Blood Flowing) which can be maintained for up to 30 minutes with your body at hypothermia temp.
On December 26th I went in at 7:30 in the morning for an as expected 7 hour surgery. While in surgery the doctors found a difficult to spot tiny hole between the inner chambers of my heart. This was easily stitched up preventing what would have certainly been a stroke at some point. I was off the ventilator shortly after and was wide awake that night. Suffice it to say, the first 2 days were the worst. The night following surgery, I ended up with excessive air in my abdomen which made breathing even more difficult when you stack on the now broken sternum.
On January 01, 2008 I was released home. Happy New Year by the way! It was great to be at home, although this introduced new challenges. For instance, I have never considered hospital beds to be comfortable, but figuring out the most comfortable way to sleep in my own FLAT bed was certainly a challenge the first night home. I am restricted from carrying anything over 10 pounds (it hurts) so basically I don’t do anything but eat, sleep, breath, and bathroom over the next several days. The pain is manageable, (thanks to magic pills) as long as I don’t need to cough or God Forbid, sneeze.
As of today, January, 4th I feel amazingly well considering what I have been put through. I plan on returning to work at a mostly full time level next week. I wanted to say thank you to everyone who supported and prayed for me and my family through this difficult time. I am looking forward to a great and prosperous 2008 and I am wishing the same for all of you!
Every now and then I will actually read one of the junk facsimiles I receive on a weekly basis. First off, it is important to note that I am inherently skeptical of their offers due to the way in which they bombard my machine. Second, most of the offers are too good to be true, thus are likely to contain a catch of some kind.
This week I received what appeared to be an article with a hand written note. The article was about a “revolutionary†weight loss product. The hand written note went like this:
Sue,
Here is the product I used last month to lose all of the weight and inches. Dr. Palmer down the hall told us about it. Everyone is losing weight on this stuff. Give it a try.
Now come on. Am I supposed to think they actually meant to send this to “Sue� Do they expect me to be so overwhelmed with the need to lose weight that I will ignore the bogus intro? Seriously, I wanted to track down the author of this “campaign†and ask them what they were thinking. However, it probably works, thus they do it.
I am sure you can think of dozens of similar examples in industries ranging from diet supplements, to car dealers. Now I know, in B2C, marketing lies seem to be common place, and car dealers, well they have been shady for years. But, every year I see more and more gimmick based advertising trickling into B2B. The internet has empowered an entire wave of marketing tricksters, who use legitimate techniques and knowledge to fudge the truth to improve conversions and make a buck. We have all seen this in the “MLM†or what I call Multi Liar Marketing, segment. I wonder, have wee all been so desensitized to bogus marketing to where we now expect it? This is why legitimate marketers must be extra careful in B2E.
Please feel free to share your experiences with gimmick advertising in the comments section. I am particularly interested in ones dealing with B2B.
First it was the Do Not Call List, and although it had a major influence on b2c telemarketing, their was little to no affect on b2b telesales or telemarketing as this rule did not apply there. Now, consumer groups are pushing for more disclosure on web tracking used by marketers for better targeted online advertisements. While there is no formal rule yet, this is how these things get started. It begs the following question. What if any affect will this have on the sophisticated tracking technologies and analytics used by today’s b2b marketers?
Difference between DNC and DNT
Now, there are several difference between the “do not track†movement from the “do not call listâ€. While privacy is certainly part of both issues, the DNC initiative relieved a day to day annoyance experienced by many consumers. While no one likes the idea of being “spied†on when web surfing, I don’t believe the “pain†felt by such fears is nearly as high compared to receiving 5-10 solicitation calls a day. With that being said, will there be enough outcries to bring about any new FTC rules? Only time will tell.
Blurred Line Between B2B and B2C Web Analytics
If new rules are created, the clear divide that exists for the DNC between b2b and b2c will not exist in the same way for web tracking. For one, it is easy to differentiate calling at home from calling at work for business purposes. How would you differentiate tracking b2b activities from b2c? Also, the physical difference that exists for b2b and b2c telemarketing does not exist for web analytics. After all, many people read work related emails at home, or on the road. How would these rules apply and be enforced?
I Know What You Clicked Last Summer
When it comes to lead generation, most savvy b2b marketers use some form of tracking from simple email analytics, to more sophisticated page by page tracking technologies such as Genius, Eloqua, and Vtrenz. If a director of IT receives a solicitation email from a web startup hocking the next great thing in technology, will there have to be a disclaimer in the email that clicking any links will be tracked and used to better “pitch†to him/her?
Weary Prospects
While annoying to some, the realities of telesales in the b2b world are obvious and accepted as such. I am not sure b2b prospects feel the same, or are even aware of the level of sophisticated tracking being done on such a common basis today. New rules or not, I wonder if greater awareness about such things would make prospects more cautious about what they click, or will prospects accept such things as “business as usual”?
I got a call this past week from a marketing manager that worked for a previous client of ours. It was odd to hear from her, as I had been thinking about their program the week before. I was wondering “what every happened to all those leads?†You see, we ran a very short, 3-4 months, lead qualification program for them. They had been successful at lead generation and were pulling in over 200-300 leads a week through multiple channels such as webinars, white papers, trial downloads. The problem of lead generation was not quantity, but quality. We proceeded to pre-qualify the highest scoring leads from their system. Leads that met qualification guidelines for sales were then passed along. Although, the quality of leads making it to sales from our program was good, few deals were closing right away. This was not unusual for us, as this was an enterprise focused program with a minimum sales cycle of 3-6 months. In any event, the company pulled the plug on several marketing lead generation efforts including our program. At the time, I knew this was premature.
Fast forward 9 months to now, I get a call and what do you know, it’s the marketing manager from this very company. She had taken a new position and wanted to run a similar program. Turns out, that after the program ended she continued to track the results. At month 5, just a month after the plug was pulled the deals started to fall. At 10 months our program, which cost the company less than $11,000 returned over $250,000 in revenues. For those who are counting (you know who you are), that’s over a 2100% return.
I believe for the most part, that people know lead generation today affects revenues next quarter in the enterprise space. This is why it can be hard for some companies to commit. They want to know immediately what affects if any their investment is having. The good news is there are a few key things that indicate early on that a program will be successful. I will cover these in the near future.
For now just remember that “patience is a virtueâ€, and one that few companies can afford to overlook.
Often I am asked about the ideal ratio of lead generation to outside sales reps. There is no short answer. The most important concept to grasp here is that inside sales/teleprospecting should be a supplement to the pipelines of outside sales. This is no different than any other aspect of marketing. I always say, the best sales reps will never justify their missing quota due to insufficient leads from marketing, and I think this is a given. However, many outside reps, while being efficient closers, are inefficient prospectors. Where top reps will exceed 100% of quota from efforts all their own, middle performing reps may only make quota with help from lead generation.
A common ratio I have observed in enterprise sales focused organizations with a decent investment in dedicated lead generation is 1:3, which is 1 inside to 3 outside reps. In this model the lead generation group generates on average 30-40% of each outside reps pipeline. I have seen ratios varying from 1:1 to as much as 1:10. Obviously the ratio has a huge effect on the benefits to outside sales and consequently, the group’s perceived success of the lead generation efforts. As such, expectations should be clearly defined in order to view lead generation success through the proper lens.
I had a discussion earlier in the week with a prospect who was concerned marketing was “over qualifying†certain leads. Turns out, sales missed an opportunity that marketing had in “nurture†or incubate status. I have heard this sentiment before, almost always from concerned sales reps. After all, complex sales involves a long term process that benefits from building deeper relationships with prospects.
If you have read Influential Selling, by Ken Karnes, then you know a successful and profitable deal starts long before a proposal is written. Where one company’s sales force may only wish to engage leads who have issued an RFP, others will want to speak to anyone willing to have a conversation. When selling to large enterprise accounts, I find the latter scenario more in line with the desire of sales. This is probably because most companies selling to enterprise sized accounts have a smaller suspect universe due to the size and nature of their deals. As such, sales wants to start any relationship with potential buyers as soon as possible, even if a sale is 14 months down the road. There is no right or wrong method and each company should set its own rules based on their solution and market landscape.
In any event, here are 2 tips to reduce over qualification of leads:
1) Regularly evaluate what the definition of a “qualified lead†is.
Even after sales and marketing have, by mutual understanding, defined a qualified lead, it is important to realize this definition is not written in stone. The definition should be based on the needs of sales, and as these needs change, so might the metrics that define a qualified lead.
2) Make use of tribal account knowledge.
Sharing information between sales and marketing is critical, especially in enterprise selling environments. Many times, a sales rep will be well informed on prospects and suspects in his/her territory or vertical. This information must be captured and shared in order to gain a clear picture of targeted suspects/prospects. We see this process work well in our lead generation programs.
Remember, clear communication and an infrastructure that allows collaboration between sales and marketing goes beyond technology to include practical process.
Messaging is a key component in any lead generation program. Poor messaging will doom a teleprospecting campaign before it even starts. Tony Jaros, an executive for SiriusDecisions, said in a recent exchange with BtoB magazine that poor messaging, along with improper targeting, is one of the most significant barriers to effective calling campaigns. I couldn’t agree more. Now that we are at a consensus, it begs the questions, how do we improve messaging?
In our call guides, we have a series of value statements that a lead generation rep can use in their sales pitch. These value statements are critical in determining the outcome of a call. A good opening value statement should do three things:
1) Quickly grab the attention of your prospect
2) Clearly communicate your solution (without fluff)
3) Establish credibility (without fluff)
A Prospect wants to quickly know what it is you do and what makes you so special. Determining who writes the value statement can determine its effectiveness. In many organizations, marketing crafts these value statements all their own. You might think “what’s wrong with that? Isn’t messaging their job?†Keep in mind that sales messaging and a sales pitch are two very different things. Marketing tends to add all the “required fluff†to anything it gets its hands on. Reading fluff may be acceptable, but hearing it can be annoying. Marketing jargon can sound like “blah blah blah†in the ears of a busy executive. You must demonstrate to the prospect that you value their time and you can do so by getting straight to the point. Instead of:
“Widgets Inc is the leading provider of powerful, efficient, and technologically advanced widget solutions. We focus on 3 key areas of widgets; flexibility, performance, and durability. We enable companies like yours to strategically enhance their business through our highly specialized Widget approach.â€
Try:
“We just helped ABC Inc. reduce capital expenditures by 15%. Our facility at Widget Inc. is state of the art. This has allowed us to improve reliability without raising costs.â€
This sounds much better when spoken and gets straight to the point. It also establishes credibility to the prospect. It can be difficult to write a good pitch at first and will most likely take several runs. Here are 4 tips we follow when crafting an effective cold call pitch:
1) Try keeping sentences to 10 words or less. This is more in line with natural speech.
2) Avoid Buzzwords if at all possible. Buzzwords are good for ads and venture capital investors, but real prospects grow weary of hearing them 5 times a day from your competitor’s cold calls.
3) Ask a few sales people in your company, the ones that have had success in a cold call, what they think grabs a prospect’s attention.
4) Finally, read the pitch allowed to a few people outside of your company but still in the industry. Do they get it and does it sound natural to them?
Following these simple steps will help you/your team communicate more effectively with targeted prospects. Remember, if administrative assistants are professional phone screeners, then corporate executives are professional cold call critics. While they may not critique your approach formally, they certainly have a way of shutting down what they do not like.
Whatever you call it, more and more sales and marketing executives involved in a complex sale are realizing the value of resources dedicated to developing qualified prospects, whether in-house, or outsourced. There are few standards here, in terminology and method. I recently had a long conversation with a new competitor in our space who wanted to learn more about what we at iTelesource do. Without giving away all of our “secretsâ€, we had a productive conversation that highlighted the range of names and methods used in our niche market. Among the many differences, there are two main “boxes†if you will that complex sales B2B lead generation/teleprospecting companies fall into.
# 1: Call Center Based B2B Lead Generation/Teleprospecting
In this box you have companies that understand the inherent differences in B2B and B2C telesales. They also understand the differences required to be effective in the complex sell. They rely heavily on their technology, process, and techniques to counter the inexperience of their reps, who they often train from scratch. As such this method is more in line with the traditional in-house insides sales/lead generation role which is in fact a more Jr. Level sales/marketing position.
# 2: Teleprospecting with remote Senior Level Sales Professionals
Companies in this box are unusually small but nonetheless make up a rapidly growing sector of our business. These “boutique†shops rely on experienced B2B sales professionals who often work from remote home offices. These companies tend to be less organized in the way of process and technology; however they rely heavily on hiring experienced senior level sales professionals who, as a lifestyle change, no longer wish to pursue the hectic lives of today’s outside sales rep. In this role, the inside sales/lead generation position is a senior level position of great experience taken out of convenience/choice.
There are certainly other defining factors such as how the companies are compensated for that matter that could make up any number of subcategories.. In any case, most companies I am aware of fit in one of the aforementioned categories. If iTelesource had to be in only one box, we would fit better in the 2nd of the two. I would however like to think we have refined our process and technologies to the point of companies traditionally in Box #1 with a delivery model more in line with Box #2. Now I do not believe one “box†is better than the other, but that it all depends on your segment, target market, and goals. In a future post we will explore what types of companies are better served by Box #2 vs. #1.
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