Market Effect Compressingthe Lifecycle


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Market Effect Compressingthe Lifecycle

  1. 1. Compressing theProspect-to-Customer Lifecycle Business-to-Business Selling 7020 High Grove Blvd. Burr Ridge, IL 60527 p. 630-654-0170 f. 630-654-0302
  2. 2. INTRODUCTION It’s a simple fact. Qualified sales leads are the lifeblood of any sales organization. So why are so many leads ignored or underutilized? In this paper we will make the case for three possible changes in your thinking: 80% • Sales and marketing organizations are better served by spending marginally less on lead generation and more on the process of lead management. • All sales leads are not created equal — identifying “sales-ready” leads is a critical of all sales leads step in the lead generation and management process. are never followed • Leads that are not sales-ready today can be nurtured and cultivated to be sales- ready in the future. up 1 There are two general stages in the prospect-to-customer lifecycle: lead generation and lead management. Most organizations spend significant time and money on the first stage, but don’t devote enough to the lead follow-up process, which is often overshadowed by the ~ yet ~ perceived need to generate a higher volume of leads. 45% As a result, the lack of information and feedback about the steps involved for quickly moving a lead to a closed deal, and the support materials required, leave many open questions as to what works in the process and where to find opportunities for improvement. A well-defined process for the qualification, fulfillment and management of each step in the lifecycle will shorten sales cycles, provide higher close ratios, and actively engage your of all sales leads sales and channel partners. It will also help build an information-rich marketing database and greater marketing ROI.will buy someone’s product 2 Prospect-to-customer lifecycle overview There are a wide variety of terms used to describe various aspects of lead generation and lead follow-up activities. For the purposes of this paper, we will use the following terms and definitions:1. BtoB Magazine, CMO Council Survey 1. Prospects — Large categories of industries and functional contacts that may be able to2. Sales Lead Management Association buy your services. 2. Targets — The prospect base narrowed to a precise and finite group of companies and individuals that meet more stringent qualification criteria. 3. Leads (inquiries, responses, etc.) — Prospects that have “raised their hands” and shown interest, either as a result of outbound initiatives or inbound engagement (websites, thought leadership, etc.). 4. Sales-ready leads — A subset of those that have raised their hands, qualified to have current need, application, money, timing and decision authority to buy. 5. Opportunity management — The process of actively managing sales-ready leads through the buying cycle to a close (customer). —2—
  3. 3. 6. Customer retention and expansion — The process of actively engaging existing customers to grow share of wallet.This paper will focus on steps 3 to 6 of the above cycle, the process of managing sales leads. Forinformation on other aspects of the prospect-to-customer lifecycle, see our white papers on: • Developing an information-rich marketing database • Lead nurturing — moving a lead from casual interest to sales-ready • Customer retention — from initial purchase to raving fanCOMPRESSING THE CYCLEKey steps we will explore to compress the lifecycle include: 1. Understanding the mindset of your sales force 2. Mapping the sales cycle of your best customers 3. Capturing lead data consistently and promptly 4. Fulfilling leads appropriately 5. Identifying sales-ready leads 6. Distributing sales-ready leads to your sales force or channel partners 7. Getting your sales force to update the status of leads 8. Managing the sales pipeline through reports and metrics 9. Nurturing non-sales-ready leads for future benefit 10. Ensuring continuous improvement so the process does not “rot” over time —3—
  4. 4. Understanding the mindset of your sales force Frustration with the sales force, whether about lead follow-up, order processing, communication of activities, or organization and attention to detail, seems to be universal. It’s not uncommon to hear statements about salespeople being overpaid, not hard workers, unfocused, “prima donnas,” etc. It is also very common to hear “edicts” on prospecting and lead follow-up, as if making such proclamations actually means they will happen. The fact is, most sales people are hard-working, well-intentioned folks simply doing the best with the situations, processes and tools they’re given. It’s also a fact that most sales people will focus on what they believe will net them the most money, even if that means servicing existing customers or spending significant time developing opportunities deep into the pipeline, at the expense of following up new leads. The challenge for your organization is to recognize the “blockers” that keep the sales team from promptly and effectively following up sales leads, and to develop processes and support materials that break those blockers down. Mapping the sales cycle of your best customersIntegrating Sales & Before you can compress your prospect-to-customer lifecycle, you should document how this process works now in your organization. We recommend interviewing some of the moreMarketing Strategy productive members of your sales team — including direct sales and channel partners — to determine best practice follow-up methods. Draw out a simple flowchart to illustrate the process.into Your Process Consider asking your sales team the following questions:While understanding 1. Who are the key decision makers and influencers in the sales process?how your sales team 2. What are the key criteria you use to determine if a lead is worthy of follow-up?sells is important, it only 3. How do you define a sales-ready lead?represents a portion of 4. What is the decision process by which a lead determines who to buy from?the process. Overlaying 5. What support materials do you use at each step of the sales process?information from your 6. What questions or objections arise at each step that would help move the contact alongoverall strategy, such as the cycle, or take them out of the cycle?growth markets, margins 7. What is the typical length of time between each step?on products, competitive 8. For longer-term prospects, what is a typical time frame for future follow-up, and how do you keep in touch with them in the interim?threats and the like, mustalso be looked at as you 9. What are the biggest “blockers” to aggressively following up sales leads?lock down your processes. This mapping exercise will help you determine your process options and discover what works best for your organization. It will also help you uncover the largest gaps. Common processDon’t just sell more, sell disruptions include overlooking leads due to perceived quality, slow follow-up timing and lack of time for ongoing contact.more of what you wantto sell. Capturing lead data consistently and promptly Amazingly, the most fundamental and simple part of the lead management process is often the most overlooked. The old saying of “garbage in, garbage out” definitely applies to the capture and follow-up of sales leads. The mapping process will have identified key criteria needed to understand the quality and timeliness of an inquiry (type of company, —4—
  5. 5. size of company, scope of opportunity, urgency of interest, functional responsibility, specific requirements, etc.) and these criteria should be engineered into every possible touch point of prospect interaction. This would include:Studies show that making 1. Website “contact” forms 2. Trade show lead forms 3. Direct mail response cards 4. Landing pages for all marketing initiatives a lead sales-ready 5. Call-in inquiry capture guides will dramatically In addition to having prospects “self-qualify” with important criteria, there are many other commonly used tools to overlay basic information on industry, size and contact data, such as increase your phone numbers and e-mail addresses. In short, the more complete the data is on every new lead, the stronger the foundation for quickly identifying the appropriate follow-up. overall close ratefrom the same flow Fulfilling leads appropriately of leads. Fulfillment refers to the methodology and process of providing what the contact has requested as part of the lead generation process. Over the years, this process has evolved from “one- size-fits-all” postal fulfillment (of, say, a catalog or capabilities brochure) to today’s far more personalized and customized postal and e-fulfillment based on area and level of interest, media ~ so ~ source, quality scoring and the like. In the end, the purpose of your fulfillment should be to: 1. Quickly acknowledge the prospect’s response. 2. Take the prospect deeper into the interest / buying cycle, providing more detailed information on products or services of interest.What makes a lead a. Product information and data sheets sales-ready? b. Links to interactive sales or product demos 3. Establish credibility for your organization through higher-level brand positioning. • Need 4. Provide another opportunity for the prospect to self-qualify as sales-ready. • Application 5. Identify the specific individual or organization responsible for sales follow-up. • Money While the world continues to move toward everything online, we believe that there is real value • Timing to both e-fulfillment and delivering hard copy materials to your most qualified prospects. This is for a variety of reasons; first, because it serves as a more tangible and constant reminder; • Decision authority second, because many of your competitors have probably discontinued the process, which can then serve as a differentiator; and third, because it protects against spam filters and / or simple e-mail fatigue. Identifying sales-ready leads Typically, the biggest disconnect between the marketing and sales groups is over the generation and follow-up of “qualified leads.” Marketing thinks “We spend lots of money and intellectual effort to generate these great leads…” and Sales states, often emphatically, “These sales leads @#%*.” The truth is, both are right. Studies show that making a lead sales-ready will dramatically increase your overall close rate from the same flow of leads, and dramatically enhance the level of engagement and responsiveness from your sales force or channel partners. —5—
  6. 6. Processes for sales readiness screening might include: 1. Automated or visual screening — Based on established criteria and the information provided by the prospect in the lead gen response mechanism. 2. Telephone screening — To validate information already provided, or to provide context and detail as an enhancement to that data.A Word About 3. E-mail or direct mail screening and secondary qualification — PerformedTechnology... through additional response mechanisms provided in fulfillment. The frequent complaint is that this is “doing the sales person’s job” or “isn’t this what weThere are myriad technology pay them for?” We will not argue the merits of that thinking here, other than to state, unequivocally, that you will more than recoup your investment in making leads sales-readysolutions designed to help vs. simply generating more leads that go uncontacted.organize and manageprospect and customer dataand relationships. Distributing sales-ready leads to your sales force or channel partners Lead comes in, forward to the field, end of story, right? But what is the correct territory orWhether you use a contact sales rep? What additional information have you given them to provide context? How will itmanagement program like be updated? And what level of transparency do you have in order to know the effectiveness of follow-up?ACT!, a more robust solutionlike, or an Even those organizations with fairly homogeneous direct sales organizations and robusteven more complex and fully CRM systems seem to have trouble when it comes to the totality of this function. Overlay the use of independent reps and / or distributors and you can imagine the complexities.integrated set of tools fromyour business management Regardless of technology platform, distribution rules and processes should include the following:system, technology alone willnot compress your cycle. 1. Rep assignment based on geography, industry sector, account or other documented business rules.Determining the right 2. Information about the lead, including:combination of technology, a. All contact information, such as phone, e-mail address and websiteprocess, logistical support b. What marketing initiative they responded toand management oversight c. What fulfillment they have received and whenis key to executing at a high d. What qualifying information they providedlevel. In addition, not all e. Other qualitative notes available from phone qualificationprospects, targets or even sales f. If there was a previous response, how that response was resolvedleads necessarily belong in 3. A method of communication that allows for portability, easy access and updating.your CRM system. 4. An ability to quickly reassign the lead, if necessary. 5. Parameters for turnaround (we recommend real time, but no more than two days).For more information on ways The key to all of this is speed, useful information and the absence of “blockers.” Speed isto view this specific issue, see important to the prospect, as they will gravitate to those that can solve their problem today.our white paper on the topic. Accurate and useful information allows the sales person to spend less time researching or going down unproductive paths, and more time addressing customer needs. —6—
  7. 7. Getting your sales force to update the status of leads This is, of course, the holy grail of successful lead management. Compressing the cycle is a function of many things, but closing the feedback loop and allowing for aggressive management of the sales function with reliable metrics is key. Many will not want to hear this, but given a well-thought-out process and basic technologyManaging the tools for distribution and update, the single largest issue we see is a lack of real commitment on the part of management to establish and reinforce good habits. Sales people will naturallyPipeline resist any attempt to formalize a disciplined feedback loop. Some of this is for the obvious reasons: it takes too much time, or they don’t want to use the technology or system required. But much of it comes from a salesperson’s innate desire to be independent, to follow “their” system, and to let their performance speak for itself. This becomes particularly difficult whenThe more things change, the salespeople showing the most resistance are your top producers.the more they stay the But management that allows this behavior to continue can be short-sighted. What are thesame. Understanding these opportunity costs of poor follow-up? What example does it set for others on the team? Andratios in your organization what level of transparency and reliability really exists in the function, especially when thewill help to compress your economy turns down and you’re scrambling for every piece of revenue you can get? We all know that some become top producers as a function of their territory, or a particular customer,selling cycle. and not because of great salesmanship, so why let them dictate your posture on this? All of this said, possible ways to ensure timely and successful lead updates include:• Prospects to leads• Leads to sales-ready 1. Clear communication of the short- and long-term benefits to the salesperson• Sales-ready to quote 2. Committed management that reinforces good behaviors regularly• Quote to close 3. Regular reviews of relevant reports with each member of your sales team• “Lost-to” whom 4. Update options that are fast, easily accessed and limited in scope 5. Linking of estimating and quoting tools to actual lead information 6. Incentive rewards for meeting interim sales goals, including lead updates 7. Tying compensation and expense reimbursements to fully updated lead data 8. Termination for non-compliance Managing the sales pipeline through reports and metrics There are many variations or flavors of sales follow-up reporting, and the recommendations here will by no means be exhaustive. There are two key reporting functions that provide the basis for many other drill-downs and direct conversations with your team. 1. Initial follow-up — A summary of how quickly leads are being contacted and the percentage that go into the quote pipeline. This is typically by sales rep and then rolled up into regional managers. The active management of this activity will help identify territories that are under- or overstaffed, and will quickly identify where leads are slipping through the cracks. 2. Opportunity management — Both summary and details of the active quote pipeline, allowing for meaningful, forward-looking projections, comparative stats on close rates, escalation opportunities to help close and an understanding of “why lost” if that happens. Active management of this function will increase close rates and identify opportunities for training, process refinement or other remedial activity. —7—
  8. 8. Nurturing non-sales-ready leads for future benefitAll too frequently, a lead that has been deemed “unqualified,” or not sales-ready, getsrelegated to the bowels of your database, never to be contacted again. This is a mistake —remember the statistic that 45% of all sales leads will buy from someone — and it has been ourexperience that this number is much higher if measured over an extended period of time (years,as opposed to your standard selling cycle).Part of the qualification and capture process must be to build an information-rich database ofpeople who have contacted your company, know your product line, have expressed interestin buying and can be engaged in an extended dialogue and nurturing process to ultimatelybecome a sales-ready prospect. This engagement can come in many forms, including e-mail,direct mail, telemarketing, social media and direct personal contact on the part of the salesreps. Communications themselves can be driven by: 1. Time-specific continuums — Typically consisting of a series of momentum-building messages to make the case for your company and products. 2. Event-driven follow-ups — Geared around data such as a specific budgeting cycle, fiscal years, defined replacement cycles, trade show attendance, etc. 3. General brand awareness — Typically highlighting customer case studies, new products and services, thought leadership and financial credibility. 4. Promotional outreach — Frequently promoting specific products or services that are relevant to their past interest and are packaged and / or priced attractively.When put together in the aggregate, this consistent and ongoing communication ensures thatyour company is there and positioned appropriately when the prospect moves into a seriousbuy mode. It should be noted that all of these types of prospect engagement initiatives arerelatively inexpensive vis-à-vis generating new prospects and leads.Ensuring continuous improvement so the process doesn’t rot over timeIn the end, it’s all about execution. Technology by itself, no matter how robust, will meannothing if there are not back-end processes and reviews in place to make sure it’s all working.Each step outlined here is as important as the next, and we’re sure you’ll identify others that arespecific to your organization.We recommend, at minimum, a review of the entire process every six months. Initially, we believethat quarterly is appropriate. Invariably, you will encounter obstacles that are unanticipated ordifficult to resolve — do not let this discourage you, as the first sign of process degradation willsignal to your entire team that this is not important, or that you are not committed to it. The flip isalso true — if your team sees that you are always working to refine and improve the system, theywill climb on board and become highly participative in the process. —8—
  9. 9. About MarketEffect MarketEffect provides industry-leading business-to-business sales and marketing services that empower our clients to reach new levels of profitability and market share. Services include Data Management, Prospecting and Nurturing, Telemarketing and Telesales, Channel Management and Response Management. With more than 20 years of experience, MarketEffect has developed insight into what works, and has built the processes, procedures and team to put those programs into action. Based in suburban Chicago, the agency’s client list includes small and large business marketers from a wide array of industries. MarketEffect is part of The Mx Group. Data Management Channel Management Data Optimization Targeting DATABASE List Research / Rental CHANNEL End User Development MANAGEMENT MANAGEMENT Database Building Tool Kits Prospecting / Nurturing Response Management Database Engagement Lead Processing / ManagementPROSPECTING / Marketing Automation RESPONSE Lead Qualification NURTURING MANAGEMENT Lead Fulfillment Sales / Media Reporting Telemarketing / Telesales Bulk Fulfillment Lead GenerationTELEMARKETING /Data Gathering TELESALES Virtual Selling For more information, contact MarketEffect at 800-827-0170