B2B Sales & Marketing Blog

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.

In a post to from the Sales Lead management Association John Obermayer makes an interesting and timely point:

While most C-level managers realize that build-and-ship schedules are tied to sales performance, few understand that sales performance ultimately is tied to sales lead performance and the marketing budget.

Reduce your lead generating marketing funds and within 30 days inquiries will slow down in proportion to how much you have cut the budget.   The frightening subsequent sales failure happens within 60-90 days when sales plummet because the pipeline of prospects has slowed to a trickle.  Not to put too fine a point on it, but this is a prime example of cause and effect.

In difficult times many companies make cuts without thinking through the consequences of their actions.  I have seen this time and time again … sometimes with disastrous results.  In difficult times it’s precisely the investments you make in lead generation, lead nurturing and lead qualification efforts that will keep you in the game.

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.

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.�

We strongly believe that the relationship between our Business Developers (BDs) and the sales people who are our ultimate customers is essential to the success of a lead generation / lead qualification effort.  A vital element in this relationship is the need to foster bi-directional communication as a regular discipline.

Remember, the goal of your eti business development team is not to just set appointments and let you battle it out on your own.  We want to be in your corner because we share a collective responsibility to see every sales opportunity through to the close of the first sale and the acquisition of a new customer. 

We know full well that the sales opportunity pipeline (and the prospect pipeline) is a fluid, dynamic process.  That clarifies the essential difference between us and other lead generation companies.  In short, we prefer to be your partner, not your vendor.  Here then is one of the realities that makes eti so markedly different from our competitors.  We have little interest in a hands-off relationship.

Specifically, this is what we want you, as a client, to know:

• If you have a question or concern we want to hear it.  Please call us to discuss as often as you wish.
• If you need more information about any qualified prospect submitted to you, please let us know.  We’ll call the prospect again and probe that topic for you.
• If you feel you’d like a particular individual on the prospect’s side to be in on the appointment, tell us – we’ll do our best to arrange it for you.
• If you have made an initial call and feel it would be better to have eti hold onto the prospect and move them further along or nurture them until ready, that’s what we’ll gladly do for you.

And more.  Just whatever occurs to you – call us.

Edited transcript of a telephone conversation initiated by Michael Falkson, Pres. eti Sales Support Inc, with Mr. Ostrow 08/02/08.

The Aberdeen group recently undertook a study of the B2B Teleservices Industry - the first of its kind to my knowledge.  I recently had an opportunity to talk with Peter Ostrow, the author, about some of his findings.

Mike:  In your view Peter, what are the critical elements a best in class company should look for when seeking an outsourced business development partner?

Peter: They should look for a partner who offers flexibility around deliverables.

The overall deliverables should be carefully quantified and reevaluated on a regular basis.  They should look for flexibility in compensation methodology, which we’ve ratified through our research, and that too should be reevaluated on a regular basis.  They should look for a company which allows them to micromanage the process. 

Now that may sound counter productive to efficient program execution, but on a personal note when I look at my career, I have been least successful when I did not have the customer fairly closely involved in my day-to-day activity.  Going away with a script and a list and then simply coming back with the results is in my opinion least likely to satisfy the client.

There are some vendors in your space who don’t worry what their clients think of how they work, whose customers don’t get involved or want to know how you produce their results. They’re just concerned with the final outcome. And that there may even be an implication that “we use a special ingredient or a secret sauce.”

To be honest Mike, I think there are some proprietary best practices unique to various providers, though not patent worthy.  I think it’s interesting that some companies try to figure out how you get the job done and I’m ok with that. I also believe it’s wrong to keep the customer from accessing the callers, the messaging, and some of the processes. These are bad signals to clients.

Finally, I think clients should certainly look for domain expertise. That’s very important.

However, it’s not always feasible that the provider of teleservices can say, ” Yes! We have exactly the experience your company needs. We’ve worked for companies with the same demographics and which faced the same challenges. In fact we’ve scored a wonderful success story.”  That would be too tall an order.

But for a small versus large company, for a less or more costly solution, for a situation where the brand was not well known -  or some less specific criteria, I would imagine it’s permissible and acceptable to tell a particular story which provides a little insider domain expertise to indicate we have been there before.

Mike:  How important is longevity, breadth and depth of an outsource partner’s experience in establishing desirability of the vendor?

Peter:  I would say moderately important.  People want to get in bed with someone that they know or heard good things about, but being in the business for 20 years or five years doesn’t really matter that much.

Mike:  What are the vital personnel qualities of a top notch outsource partner?

Peter:  I would say staff who are strong enough to do without the script and speak from the heart about the value proposition, will be preferred,   Callers with advanced degrees,  maybe multilingual, they’re usually very good. Still these qualities are not uniformly essential as you know. 

Probably the most important quality one needs are folks who are comfortable getting on a phone on a regular basis and interacting with the sales force.  That’s probably the #1 criterion that end-users look for. Turnaround is not that big an issue.  If people trust the outsourcing company and trust the process management then it does not matter that the folks who actually make the calls come and go. Clients won’t really fret about that . . . it’s pretty far down the list.

Mike:  How important is it that the outsource partner has access to powerful flexible technology to manage real time reporting and communication?

Peter:  There are two answers to that.  I see no difference between the best in class and other companies, so I can’t say that smarter companies will integrate with the customer’s CRM and other tools.

But I can also tell you that the majority of best in class companies either currently or in the near future definitely plan to deploy exactly that. 

Mike:  Would you say that most teleservices providers rated in that survey were essentially meeting the expectations of their client base?

Peter:  Actually, most were.  Respondents choose whether they are either very dissatisfied, somewhat dissatisfied, neutral, somewhat satisfied or very satisfied. Everyone came out somewhere between somewhat and very. The respondents were satisfied with the lead quality. They are generally less satisfied with lead quantity.

Quality . . . lead quality . . . lead quantity . . . all count. Clients are most satisfied with messaging accuracy; they are least satisfied with reporting metrics, business intelligence gathering and cost per lead.

Thanks a span, Peter, much appreciate your valuable input.

The tail that wags the dog.

Any military commander will tell you that intelligence is probably the most significantly important tool they have when developing a winning strategy. Good intelligence helps, bad intelligence doesn’t.

Interestingly enough when we look at Marketing and Sales groups it is seldom Sales (the foot soldiers) who understand the value of business intelligence and how it can contribute to successful selling.

As a group Marketing certainly does … but in my experience they rarely make effective use of the valuable information they have at their fingertips.

Too few companies are willing to make a specific, sizeable investment in gathering business intelligence as a strategic tool in their sales and marketing arsenals.

Contrary to that lackadaisical attitude we at eti take the business of intelligence gathering very seriously.  We have long learned that there is always an opportunity to garner something of value during every business conversation.

We have also learned that such business information (intelligence) can be a key element in our success in the initial task of targeting and qualifying sales leads as definite and worthy new customers for clients.

And how our clients’ sales force can use this information in their presentations aimed at converting prospects to new customers. 

Business intelligence is too wide a subject to be classified into a handful of columns/titles in the database.  On the contrary it is the cumulative knowledge of what we know about the prospect and his needs.  Some intelligence is gathered simply by engaging in an interactive discussion. Or through the electronic communication behavior of prospects (.e.g, what links they clicked, or which web pages they visited, and the white papers they requested etc.) 

It’s the ability of a business development solution provider like eti to deliver a 360 degree of data to empower your sales people to know how they should approach each prospect or customer. 

To see a demonstration of how we achieve this result please call Shelley Sachs, eti Global VP of Marketing, at 1.800-466.4384. Select option 1.

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 .

.

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

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 Sheldon Sachs 1.800.466.4384.

Michael Falkson

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:

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.

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 Shelly Sachs VP Global Business Development at1.800.466.4384 to start a purposeful conversation about how eti can increase your sales revenue while reducing your ad costs.

Michael Falkson

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