The Sales Insider » Lead Management

Inc. Magazine Highlights MIT / InsideSales.com Study “How to Best Harness Inbound Marketing Leads”

Ken Krogue — Thu, 14 Jul 2011 21:15:44 +0000

Inc. Magazine has just become another major publication to note the importance of our research on responding immediately and persistently to inbound leads.

Eric Markowitz is a well known writer for Inc., Vanity Fair, and the Washington Square News and summarizes the research of Dr. James B Oldroyd, a former professor at the Sloan School of Management at the Massachusetts Institute of Technology, and our own CEO, Dave Elkington. His Inc. article on July 6th, 2011, is entitled “How to Best Harness Inbound Marketing Leads.”

Inc. Magazine links to the original downloadable MIT study here. It was originally titled “How Much Time Do You Have Before Web-Generated Leads Go Cold?” and has been quoted now by hundreds of blogs, speakers, and publications around the world.

Original MIT Study by Dr. James Oldroyd & Dave Elkington

Every now and again you discover something that changes the world. This did for us.

At last count we have had nearly 70,000 companies access and / or download this landmark study. A more complete summary of all the research started originally by Dr. James Oldroyd and InsideSales.com is readily available at www.LeadResponseManagement.org.

I travel to several different trade shows, summits, and conferences a year and it is still fun to have someone quote our study back to us.

Has it changed anything? Only for those who are taking advantage of the windfall of immediate and persistent response. We have “secret shopped” nearly 5000 companies over the last four years to find how fast they response and how many times they persist before they give up.

The bar is still very low.

The average company still takes 46 hours to attempt their first callback, and the average sales rep only makes 1.2 call back attempts before they give up and move on. Our continued research shows that only 27% of leads ever get called.

With our technology and the awareness of these principles of immediacy and persistency, we have been able to keep our contacted rate between 85 and 92% for over three years. Our customers who follow our lead also receive this immediate bonus of a 2.5x increase in results based on the most common sense principle, “just call them back, and do it quickly.”

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The (Increasingly) Not-so-Secret Reasons You Need a Better Lead Generation Team

Ken Krogue — Mon, 20 Jun 2011 18:40:04 +0000

The message of Monday’s blog this week is short and sweet:

If you’re a B2B sales organization, it’s more important than ever to have a dedicated lead generation and qualification team.

The Bridge Group’s Matt Bertuzzi showed recently that 43% of organizations surveyed by CSO Insights were increasing their sales team size by at least 10%, and 24.7% were increasing there sales force by 20% or more.

Our own research in 2009 showed that inside sales hiring in B2B was going to go up 7.5% a year through 2015.

In the same vein:

The Funnelholic recently provided a list of 54 things to do when building a lead qualification team.

Marketo’s Jon Miller provides Seven Ways that Sales Development Reps Drive Revenue.

Green Leads’ Michael Damphousse demonstrates that the “actionable” activity rate of phone vs. face-to-face prospecting is much closer than any of us think.

The point of all this is simple: inside sales and lead qualification teams drive revenue, period. As much as I respect and admire the work of marketing automation technologies, inbound marketing companies, search engine marketing, and the like, it’s becoming ever more clear that direct outbound prospecting, and fast, immediate response by a qualification team to inbound inquiries are a critical strategic advantage to get leverage in the B2B Sales 2.0 era.

Lead Nurturing and Lead Scoring – A Critical Link

Steve Watts — Tue, 04 Jan 2011 19:01:55 +0000

On a recent guest post at the Bridge Group’s blog, author Henry Bruce brings up some research by Marketing Sherpa that states that 75% of all sales leads generated are going to buy at some point in the next 18-24 months.

Think about that for a minute.

A. Only 1 in 4 leads is ever totally non-productive. They may not convert now, or in the time frame the rep wants, but contrary to popular belief, it’s relatively rare for a sales lead to be total garbage. 75% of the active leads in our CRM systems RIGHT NOW are going to buy a product or service in our sector from somebody, somewhere in the next two years. So why not from you/me/us, if we’re the right fit?

B. It also seems to indicate that the need to intelligently score leads is now more critical than ever to prevent waste. 18-24 months is a long time, and no sales rep in their right mind is going to try and keep a prospect “on the hook” for a year-and-a-half. If they’re not buying now, stop wasting effort, the thought process goes, and use a long-term lead nurturing strategy.

But if they can’t make contact quickly, sales reps are far too willing to consign leads to the “nurturing” bucket (which all too often is perceived as a garbage can, rather than an opportunity generator).

You can’t qualify someone you can’t contact, obviously, but one of the big reasons reps aren’t “making contact” is because they aren’t responding fast enough, and they’re not persistent enough.

As Sales 2.0 Network’s Donal Daly states, there’s only 2 reasons you ever lose a sale—because you weren’t supposed to be there in the first place (meaning your solution was never the right “fit” to begin with), or you got outsold. You got outworked, out-thought, out-presented, out-collateraled, outsmarted.

Immediate lead response technologies and techniques can be a key component in avoiding both. If you respond immediately to leads (as in minutes, not hours or days), you’re massively more likely to make contact with the inquiry. Your ability to set an appointment and start a viable needs analysis increases, and happens in a shorter time frame. Bottom line, immediate and persistent response means you’re much more likely to know right off the bat whether you’re supposed to be there at all.

Furthermore, for qualified “hot” leads, particularly leads coming off the Web, the faster you make contact the stronger your chance to make a good, valid first impression—an impression that is much more likely to carry over into the 18-24 month nurturing cycle if they’re not buying now. CSO Insights states that 40-50% of all sales go to the vendor who makes first contact. Don’t just get there, get there first, and get there by phone, not just email. MIT research shows a phone call should be the FIRST contact attempt, not the second, third, or fourth.

If you lose a sale because you simply weren’t supposed to be there, it’s always better to do it early rather than late. And if you lose a sale because you’ve been outsold, why let it be because you didn’t seize the opportunity when you had it? Even if a prospect isn’t buying until potentially two years down the road, the opportunity to make a first impression only happens once.

Lead Management Tip: Brand Awareness Doesn’t = Buying

Ken Krogue — Tue, 21 Dec 2010 18:35:29 +0000

Saw a link to a Harvard Business Review article this morning on Twitter (thanks @abneedles) that had something interesting to say about the “sales funnel.”

“A global consumer electronics company embarked on a CDJ [Consumer Decision Journey] analysis after research revealed that although consumers were highly familiar with the brand, they tended to drop it from their consideration set as they got closer to purchase.”

A fairly critical warning note to those of us in marketing, wouldn’t you say?

A brand with high awareness, but low conversion.

In other words, awareness /= buying, and getting farther down the funnel before a prospect drops out isn’t a net benefit. It’s no different whether they drop out at the top (before they even begin their initial information search) or if you’re the last to get “cut” from the final decision.

I’ve heard in several places now that research by SiriusDecisions shows that today’s typical customer is 70% through their buying cycle before they’re ready to meet with a sales person. Sure, it’s good to be at the top of the funnel and to be considered at all, but “awareness” is only the first step to being considered in the decision-maker’s criteria.

After that, it’s not just about awareness, but consistent response, lead management, marketing automation, quality sales skills to maintain awareness once contacted, and providing useful information and content–all with the goal of educating the prospect to find a solution that is right for them.

Dreamforce Day 2 – A Keynote Recap

Ken Krogue — Tue, 07 Dec 2010 23:32:04 +0000

My biggest takehome from yesterday’s Dreamforce Keynote by Mark Benioff wasn’t the power of the Cloud, Mark’s personality, or the evolution of the salesforce.com platform (though it’s interesting to follow the continued expansion away from purely sales-oriented “stuff” to a broader host of applications).

It was the realization that the move to cloud computing as a mainstream service highlights a very real concern for such systems: the need to carefully control and streamline the data itself.

In the old days, computers were largely personal in nature—we used them at home, with our own software all the time, we rarely moved data from one computer to another (where have you gone, oh great floppy diskettes?).

As a result, our own schemes for managing and organizing data were mostly of our own personal preferences.

And now computers are no longer our own.

They’re our companies’ systems. Our spouse’s. Our neighbors’ in cyberspace. Our data is now part of a corporate network, a critical application database, a Web forum, our social media sites.

Sales intelligence and predictive analysis systems only work if the data they’re using have a basis in accurate reality. We’re increasingly going to have to learn to break some bad data management habits, especially as the future of cloud computing goes forward.

Based on the announcement of the Database.com platform, it’s clear that we’re still suffering from the shock of waking up to discover that our computer systems are no longer personal and individual, but communal—and taking care of our data in a communal space is a whole lot different than doing it when it’s just us and a couple of 5 ¼” floppies.

“Sorry About the Rant” — Lead Generation and Lead Response

Steve Watts — Tue, 30 Nov 2010 19:42:48 +0000

If by some serendipitous circumstance you were allowed to hang out at the InsideSales.com offices for day, you’d discover pretty quickly that we are passionate about the power of immediate lead response.

We help businesses get better sales intelligence, and effectively manage their sales and lead generation processes in a lot of ways. But we focus a lot of our efforts on immediate lead response for one simple reason:

It’s the #1 way to increase Web-generated leads’ contact and qualifying rates–and thus lead to more productive sales pipelines.

And the other reason we’re so zealous about it is that 65-70% of the business world frankly, well, sucks at it. (see our research with Dr. James Oldroyd, SKKU, Dreamforce ’08, Omniture Summit, and AA-ISP for proof).

In summary:

The aggregate data between the Dreamforce ’08, Dreamforce ’10, Omniture Summit, and AA-ISP Boston research studies shows that approximately 40 percent of all companies NEVER RESPOND A SINGLE TIME to a Web generated lead of any kind. Not “Follows up slowly and ineffectively.” Simply doesn’t do it at all.

Average response time for a first contact attempt OF ANY KIND (phone or email) for a Web-generated lead: 43 hours (when the MIT research shows that for Web leads, contacting a lead by phone within 5 minutes gives a 300 times increase in the probability of making contact).

Only 7.5 – 10 percent of companies EVER MAKE AN ACTUAL PHONE CALL to a Web-generated lead (the rest only use email).

Only 3 percent of companies call first, then send email, which is proven to be more effective than sending email, then calling.

Average number of contact attempts before a rep gives up on a lead? 1.7. Yet Dr. Oldroyd’s research at SKKU shows that barely 45% of contacts happen on the first two calls, and that to ensure 95% lead contact effectiveness, 12 contact attempts is the minimum. In other words, the average sales organization is throwing away half their leads as “uncontactable” simply because enough “touches” aren’t being made.

So what does it all mean? The bottom line?

Bad lead response and lead management isn’t a “problem.” It’s a business disaster of apocalyptic proportions.

Business are killing, annihilating the effectiveness of their marketing and prospecting efforts–and the vast majority of them don’t even know they’re doing it.

Bad Performance Management “Inconvenient Truths”

Steve Watts — Mon, 01 Nov 2010 16:55:07 +0000

As the founder of top-level consultancy High-Yield Methods in Minneapolis, Dick Lee has worked as a sales and customer process guru for over three decades, doing VP- and C-level consulting with companies like Boeing, 3M, and Microsoft.

In an outstanding article entitled “Sales Lead Programs—Another Inconvenient Truth,” Dick tears apart bad lead management practices with a metaphorical sledgehammer, but in the process brings up a just-as-critical side effect: “We now have and have had innumerable clients dying to hire good, experienced salespeople, but the well has about run dry.”

Sales people get paid a lot of money, and perform “hard, essential work,” but in Dick’s mind are often treated as “Joy Riders. Parasites. Necessary Evils.” Sales is the “corporate whipping boy,” he states, because “anyone having that much fun deserves to be punished, eh?” If the well is running dry, it’s because professional sales reps are “treated so badly that most up-and-coming business professionals won’t put up with those levels of disrespect.”

And one of the worst forms of the sales “whipping boy” mentality is bad performance management—the “Conveniently Un-true” disconnect between what sales management says they want, and the way they implement the sales process.

Think about it: how many sales management teams chant the “more sales” mantra, but don’t bother with lead management, or measuring the end-to-end buying cycle to track lead source effectiveness—making it rare for reps to get truly qualified leads?

How many companies spend thousands of dollars a month on Web marketing, SEO, and pay-per-click—but then wait 2-3 days to hand off incoming inquiries, dramatically reducing an agent’s probability of making contact (all this assuming that they respond at all, since research consistently shows that 35-45 percent of companies don’t even make a single contact attempt to new Web-generated leads)?

How many sales VPs expect reps to compete in aggressive markets, but don’t give them the productivity tools to increase sales calls, manage follow-ups, nurture leads, and automate their processes?

Instead of doing weekly training and mentoring, how many organizations throw reps into a once-every-six-months training seminar, then wonder why presentation and closing skills are still sub-par?

How many times do CxOs set unrealistically high quotas—then wonder why the company is hemorrhaging clients because reps are forced to close every prospect they can, regardless of “fit” or actual lifetime customer value?

Sometimes sales aren’t happening because a company is simply in the wrong market, and as soon as the strategic direction gets fixed, performance increases. But never forget that reps’ levels of motivation play a huge part in sales success, and one of the fastest ways to “dam success,” demotivate the sales team, and kill deals is to claim you want a specific outcome, and then set up a “bass ackwards” process to achieve it.

Market Positioning and “18 Fishing Poles”

Ken Krogue — Tue, 26 Oct 2010 18:40:58 +0000

I recently bumped into a post by Escape Velocity’s Liz Strauss called “When Too Many Options Are None At All.”

Having “18 fishing poles in the water,” she suggests, leads to a lot of “unfocused work for little return . . . We spend all of our time running up and down the bank checking to see if something worked or whether we need to rebait the system.”

Wise words.

I’ve said it before: In today’s marketing world, narrow but deep, not broad but shallow wins the day. For most small- to mid-sized businesses, better sales performance means conquering one vertical or market at a time, rather than trying to “dip” into a dozen different markets at once.

At the same time, sometimes a net is better than a pole. We’ve discovered over the years that there’s frequently a lot of overlap between markets/verticals in terms of process and need. The terminologies are different, the products they sell are different, but the underlying need to help them connect with their clients and prospects is the same.

Thus, sometimes it’s okay to use a net to cover more than one overlapping vertical, instead of trying to catch them one pole at a time.

But when in doubt, stick with one market, dominate it, find the next one, wash, rinse, repeat.

Inside Sales Best Practices – The Web Marketing “Mass Disconnect” Continues

Ken Krogue — Mon, 16 Aug 2010 18:17:30 +0000

Sales industry researchers CSOInsights stated recently that after a “flat” budget year in 2009, marketing budgets are increasing in 2010 and beyond, and that the top three items for additional budget allocations were:

Web site design/content (65% stated they were increasing budget allocation)
Email marketing (54%)
Web search optimization (51%)

Great news, right? Good to hear that the economy is picking up, and that smart companies are following current trends in effective Web lead generation.

So why did my “Massive Disconnect” alarm start going off almost immediately?

Here’s why: because indicators show that the majority of companies are terribly, horribly un-optimized to take advantage of the leads their Web marketing activities generate.

Even though the article states that 75% of sales organizations now use a CRM tool of some kind to track and monitor sales activities, MIT research shows that most of them still aren’t following good lead management practices to get the most from their increased marketing spend.

For example, how many of the companies surveyed are currently responding to their incoming, “hot” Web leads in 10 minutes or less? Because if they aren’t, MIT’s research shows they’re potentially losing 20 times the total effectiveness of the leads they generate. Even worse, the research shows that 45% of companies don’t even respond AT ALL to new Web-generated leads—let alone in 10 minutes or less as best practices suggest.

So let me get this straight: the top three increased marketing budget allocations for the next year are all based on Web marketing—yet nearly half of companies don’t respond AT ALL to incoming Web leads.

Hmmmm.

Furthermore, of the companies surveyed, how many call/contact attempts are they making to reach their new Web leads? MIT’s research shows that barely 7 percent of companies make at least 6 total contact attempts by phone and email to incoming Web leads.

Yet according to The Bridge Group, the average number of “touches” needed to convert a new inquiry into a prospect is somewhere between 6 and 7—and dead “touches” like no-answer phone calls don’t even count towards that number.

So tell me again—why are companies increasing Web marketing budgets when statistically only 7 percent of them are even meeting the absolute, barest of bare minimums to get the value they want from their leads?

My “Massive Disconnect” alarm just went into overdrive.

Is it any wonder that in spite of progress, Propelling Brands says that sales and marketing still have a long way to go to align their processes?

Sales 2.0 – The “Thin Line” Between Sales and Marketing Grows Even Thinner

Ken Krogue — Tue, 10 Aug 2010 19:23:00 +0000

An outstanding article by Propelling Brands’ Adam Needles discussed the fact that according to SirusDecisions, less than 10 percent of B2B businesses have successfully redefined the necessary role of high-impact lead generation and lead nurturing that will be required in 2010 and beyond.

I don’t want to steal his thunder, so go read the article, but the major point is that over the past 10 years, the roles of sales, marketing, lead generation, and lead nurturing have consistently become more holistic.

Sales managers are recognizing that they HAVE to have usable, critical intelligence data about how marketing is getting them their leads—and vice-versa, marketing managers are realizing that their efforts have to line up from Day 1 with what sales is trying to accomplish.

Every marketing and sales touch point is becoming increasingly attached and interactive with a half-dozen other touch points along the way—and for businesses to really get what they need out of their marketing spend, it has to be this way.

Trish Bertuzzi and The Bridge Group provided a set of data that added some weight to this assertion. Their survey of 115 companies indicated that dedicated lead generation/lead nurturing employees have nearly doubled in the last three years, and that there’s increasingly a split—almost exactly 50/50—of which department lead gen reports to, sales or marketing.

While there will never be a total overlap between sales and marketing, I don’t think the time is far distant that we may see the development of a new, hybrid department that works as an intermediary between the two. The “Market Oversight” department, or “Sales Analytics” department, will have the specific role of measuring, testing, and developing the ways in which sales and marketing will combine their efforts.