Ken Krogue

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.

It hasn’t been released to the public yet, but Inside sales metrics gurus The Bridge Group, Inc. just finished their “2010 Inside Sales for SaaS Companies” report, and they kindly sent me an advance copy.

I’m not going to reveal too much about it, but like their previous sales metrics reports, my reaction can be summed up in a single word:

Awesome.

There’s way too much good stuff in terms of specific metrics, data analysis, and key insights to post here, so go pick up a copy when it becomes available, but there were two key ideas I gleaned from the report:

Idea #1—In very clear terms, the study demonstrates that SaaS vendors have better sales performance than their license software counterparts—and the analysis indicates that it’s probably because they know how to push and leverage their own product solutions to get the highest benefit.

The demonstrated benefits are real and significant. The study shows that on average, compared to licensed software vendors, SaaS vendors:

• Have 20% more reps hitting quota (70% vs. 50%).
• Have more scalable sales processes, with measurable, repeatable, metrics.
• Have a nearly a 25% shorter sales cycle.
• Have higher lead-to-prospect conversion rates.

Some of it may be the nature of the SaaS space, but if the SaaS vendors themselves are getting these kinds of benefits, it seems pretty clear that the people they’re selling to should see some of the same.

Idea #2—It still comes down to Leads.

As the study itself states, “The #1 challenge for inside sales in this model [SaaS] is leads . . . This is a machine that needs to be fed.”

But it’s not much of a stretch to say that the #1 challenge for ANY sales organization is leads. Companies have to optimize and leverage their lead generation strategies to the max, especially when industry statistics show that organizations consistently have their reps make 5 or less contact attempts on new leads, let new leads grow cold by waiting 24-48 to attempt to make contact, and only contact 50% of their valid leads because they’re simply not giving enough effort or engaging in the right processes.

If you’ve followed my blog or my company for any length of time, it’s likely you’ve heard me say that immediate response to sales leads is one of the crucial factors for creating new sales prospects (and that a good sales automation tool is about the only way to do it consistently and effectively).

But a few months ago, sales productivity guru Paul Castain had some interesting advice in a blog post entitled, “For Those About to Rock, Show Up First!”

If you haven’t read the article, you might think that the title follows along with what I’m espousing—that we need to “show up first,” be the first person on the scene, be faster than the competition, etc.

In reality the point of Paul’s article wasn’t about being the first person to show up—the point was to show up at all.

Too often we barricade ourselves into a place where we know we can be comfortable.

Comfortable and barely productive.

We tell ourselves stories about how “These prospects aren’t really going anywhere,” “That cold call approach will never work,” or “They’ve never heard of us, why would they listen to me?”

We come up with every reason not to put forth the effort to get ourselves out there. Because it’s risky. There’s a chance we’ll be rejected. A chance that there’s going to be an emotional backlash because some prospect is having a bad day and doesn’t want to talk to us.

As much as I believe in the power of immediate response, a lot of the time in sales, the choice isn’t how quickly we show up, the choice is to show up at all.

Now let’s be clear—given the opportunity with a prospect, the best choice is to “show up first” and be the first one there. Research from MIT shows that immediate response to Web leads within minutes, combined with consistent, proactive follow-up increases contact and qualifying rates over 21x over waiting even a day.

Furthermore, most sales industry studies show that the first respondent to a new inquiry gets the sale between 30 and 40 percent of the time, because they typically create a sense of “loyalty” with the prospect. If there’s one change you could make today that would have immediate impact on your business, it would be to get in front of the prospect first, do it within minutes, and do it over the phone. You’ll have a serious competitive edge in your market.

But before you can “show up first” you have to “first show up”—and if you can’t manage that, all the sales advice and business strategy in the world isn’t going to help.

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.

The message of this post is pretty simple: Managers and reps should never schedule vacations during the last business week of the month.

I’m sure some of you—most likely front-line sales reps—growled a little bit at hearing that.

On the surface it sounds harsh, right? Companies don’t control our lives; we should have the freedom to go on vacation when we wish, shouldn’t we? This is the United States of America, free country, and all that, right?

In principle yes.

In the real world of professional sales?

Not on your life.

The last two to three business days of the month are crucial for sales teams. Not because it’s necessarily “crucial” for the people doing the selling, but because in many cases, it’s crucial for potential buyers.

Whether it’s real or simply imagination, the end of a month pulls on buyers’ psychological strings.

Many budgets run on end-of-month or end-of-quarter schedules. Department productivity goals are clearly in focus, and decision-makers want to, well, make decisions.

When the calendar turns, we don’t want to leave old problems unfinished. Old problems are stale, dull, rehashed.

We want to “gear up” for the next month, tackle new problems and fresh ideas.

And like it or not, sales reps need to be around to take advantage of it.

Whether it sounds disingenuous, whether it feels like a “mercenary” tactic, there’s a reason that sales reps need to be in the office on the last day of the month, because C-Level decision-makers want to make decisions, and mid-level managers want to impress the C-levels.

The bottom line? The last week of the month, money is floating through the air, and deals are begging to be closed.

-

Top 20 Articles on www.KenKrogue.com (with total views)

1. What is Inside Sales? Our Definition of Inside Sales | Ken Krogue – 16,115 Views
2. Inside Sales Best Practices - 1,623 Views
3. Inside Sales Tips by Ken Krogue - 1.026 Views
4. KPI – Key Performance Indicators – 867 Views
5. Inside Sales versus Outside Sales – 542 Views
6. Is Leaving a Voicemail Worthwhile? – 456 Views
7. 6 Reasons Salesforce Users Need Hosted Dialer Technology - 382 Views
8. Behind the Cloud – Ken’s Notes – 310 Views
9. Inside Sales Tips – No Vacations Last Week of the Month – 298 Views
10. Funny Inside Sales Videos – 290 Views
11. Inside Sales Tips – Skip to the Beep – 273 Views
12. Demand Generation Tactics and Strategy – 258 Views
13. Inside Sales Tips – Interest is The Counterfeit of Need – 252 Views
14. Inside Sales is Top Method of Lead Generation – 231 Views
15. Inside Sales Training – 214 Views
16. Inside Sales Tips – How LinkedIn Gives you 3 Free SEO Backlinks - 206 Views
17. Inside Sales Tips – Specialize – 174 Views
18. Marketing B2B 4 Quick Email Tips – 168 Views
19. Leadscon East Vendors Need to Drink their Own Medicine - 137 Views
20. What is Lead Response Management – 137 Views

I bumped into this post on The New Sales Economy, and thought it was a worthwhile read on inside sales best practices (thanks to Trish Bertuzzi for the link).

Using The Bridge Group’s data, author Chad Levitt asks nine highly relevant, incisive questions about the current state of professional inside sales.

I was particularly interested in one of the questions—”Is there a disconnect between sales management and front line sales reps?”—because in my experience, even the best organizations occasionally have holes, or disconnects in their sales process.

For example, when we did our 2008 Lead Response Management Study, we were shocked to discover that 45 percent of the top 500 companies in terms of Web marketing budgets didn’t even respond a single time to a Web-generated lead.

So why do disconnects like this happen?

Most of the time the root causes are very simple:

• Organizations simply don’t understand the value of the action they’re not taking (e.g., immediate response to Web inquiries = dramatic increase in qualified leads).
• There’s no incentive for someone in the organization to monitor the activity (i.e., because no one understands the value, there’s no expectation of accountability).
• The process they have in place is too inefficient to get the expected benefit (lack of automation, inability to get information to the parties fast enough).
• Changing the process seems like it “takes away” from “more important” activities (i.e., “We need our sales reps and managers selling, not managing leads”).

The bottom line becomes massive disconnect, sales reps not hitting quota, and managers griping about sales performance.

Stumbled across this blog entry recently on Glance Networks, and having done exactly what Tom Scontras is talking about for three or four years now, I related completely.

He nails #4 on the head—it’s a constant game in both sales and marketing to not outsmart ourselves. Don’t toss away something that works pretty well in hope of chasing the “home run” without really, really researching it out first.

We’ve wasted a lot of dollars over the years because we forgot to split test everything. When it comes to your lead generation efforts, don’t make decisions based on your gut. I’ve discovered that there’s almost always a way to measure results, and then improve. It takes time and effort, but aligning your ad words, ad impressions, click-through, conversions, and sales process creates power and synergy.

The other thing Tom hits out of the park is the idea that the marketing to sales transition needs to be seamless, from first “touch point,” to conversion, to feedback. I’m still shocked, frankly, how many companies still haven’t figured out that they’re wasting money on marketing when they don’t have any real way to measure what’s working and what’s not. If online CRM seems to be more hype than substance lately, it’s only because there’s a lot of people who are willing to sell the software, but don’t have a clue how to really make it productive for the people who use it. The fact of the matter is, the only way to do what Tom’s talking about—making the marketing-to-sales handoff seamless—is to leverage current technologies for all that they’re worth.

“Seamless” means the prospect never knows there’s a transition. It means the sales rep knows exactly how the prospect got there, which lead source generated them, and what the prospect sees as being most important. Seamless means that ad words and sales collateral translate across team lines. Seamless means shared mind set. It means that sales and marketing—two organizations that have historically gotten along as well as a pit bull and a Siamese—are working in parallel, and not just meeting each other occasionally as they zig-zag across the company sales “goal line.”

Gerhard Gschwandtner - Founder of Selling Power Magazine

A friend of mine, Gerhard Gschwandtner, the founder and owner of Selling Power Magazine, just took some time and wrote a post on his blog about when is the best time to call back on leads. 

The post he wrote came from our landmark research study conducted with Dr. James Oldroyd of MIT that was originally presented in October of 2007 at the MarketingSherpa B2B Demand Summit 2007 in both Boston and San Francisco.  This study was the genesis for the new industry called Lead Response Management; a subset of Lead Management that focuses on responding immediately, continually, consistently, and optimally to increase contact and qualification rates of web-based leads.  The interesting information involves the incredible changes in your ability to reach people by calling on the best day of the week, time of the day and most importantly, calling back immediately; as in 5 minutes!

BEST DAY OF WEEK TO CALL

To quickly summarize Dr. Oldroyds research: Tuesday is the worst day to call, while Thursday is best.  In fact, if you call on Thursday you have a 49.7 percent higher chance of reaching a prospect than on Thursday.  Monday and Friday are almost as bad, but Wednesday is nearly as good as Thursday.

BEST TIME OF DAY TO CALL

The next stage of the research was focussing on the best time of day to call.  Early in the morning (8am to 10am) and late in the day (4pm to 6pm) are much more productive than calling between 10am and 4pm.  By calling at 8am your chances of making contact go up 164% versus calling at the worst time of the day, which is from 1pm to 2pm.

IMMEDIATE RESPONSE HAS THE BIGGEST IMPACT

Day of week and time of day make noticeable impact on contact rates, but calling back within 5 minutes versus even waiting 30 minutes increased the odds of making contact BY 100 TIMES.  And possibly more important, the ability to qualify or set an appointment also went up BY 21 TIMES.

In summary… Call back NOW!

This information has changed the lead response management strategies that companies have put in place.  It has become clear that in an internet age people want information now; they don’t want to wait.  Their attention spans are shortening, so you had better reach out to them immediately.  Don’t let a lead sit in an inbox for even half an hour; that is a big problem when most sales reps don’t even attempt a first phone call for 24 to 48 hours and only make 4-5 attempts to reach a lead.  If the average contact rate is 10% (which our research among 450 clients shows it to be) then that means only 45% of all leads ever get contacted!

When we learned this internally at InsideSales.com, we immediately designed our dialer and lead management CRM technology to capture the lead on a website, look up which rep should get the lead, dial the rep, get them on the phone, and start dialing the lead… all in 8-10 seconds on average.  We couldn’t get our own reps to be able to do it by hand fast enough by just asking them (or even mandating) to call the leads back fast enough.  The best they could seem to do was about 30 minutes, which missed the whole window of opportunity.  So our phone dialer software was the key ingredient that launched a new industry that is getting the likes of Gerhard and Selling Power Magazine, the premier media provider for solutions for sales management to recognize it as a key ingredient in the Sales 2.0 initiative.

Lead Response Management is the process of responding to leads at the optimal time to achieve the highest contact and qualification rates.

Recent research shows that quite often the ‘optimal’ time is immediately.  But many companies spend thousands of dollars monthly to generate clicks to their website.  These same companies invest tens of thousands in building a website to attract visitors.  They use analytical tools to analyze how to convert these visitors to leads.  Then they send the lead to the sales department.

The lead often sits 24 to 48 hours before it gets called back.

A recent survey done by Dr. James Oldroyd while at the Kellogg School of Management at Northwestern University shows that the majority of companies expect 4 to 5 attempts are made by their reps to contact a lead.

Why spend thousands of dollars on generating clicks, high conversion websites, and powerful analytics if you are going to let your leads sit for 2 days and only contact roughly half of your potential prospects?

The question is almost insulting, yet that is what most organizations do.

More research by Dr. Oldroyd shows that calling back a lead quickly has dramatic effects on actually making contact with and qualifying that lead.  His research says that if you can call back a lead within 5 minutes, you are 10 times more likely to contact a lead, and 6 times more likely to qualify a lead than by waiting even 30 minutes.

And if you wait more than 20 hours to contact a lead, you actually hurt your chances of contacting and qualifying your lead with each successive attempt to make contact.

Technology now exists that can trigger callback attempts within seconds.

Technology can also schedule callback attempts at different times of the day and different days of the week to boost contact rates above 85%.  Also, these solutions can automatically market to leads and continue to generate prospects every 3-4 weeks for 2 years or more.

We at InsideSales.com coined the phrase ‘Lead Response Management’.  To us it means wringing every last ounce of value out of leads by responding quickly and consistently.  Interestingly, sometimes responding at just the right time is more important that responding quickly.

Lead Management encompasses many different areas: Lead Capture, Lead Routing, Lead Source Tracking, Lead Response Management, and Lead Qualification.

Lead Capture is the process of getting someone who clicks to your site to fill out a form. 

The look, feel, and length of the form are technically part of the web design; but what does the form do?  Does it put the data into a table, send an email, or populate directly into some form of database?  The form is the transition point between lead conversion and lead management.  Most companies still have to manually type in a lead from the website into tracking systems that range from simple spreadsheets to a customer relationship management (CRM) database.  Ideally a lead is able to be captured and redirected to the appropriate department for response in real time.

Lead Routing is the process of getting the lead into the hands of the most appropriate salesperson.

Speed is critical.  We are finding that most leads sit somewhere between forty-eight and seventy-two hours before the salesperson actually attempts the first live contact.  Much of the slowdown in routing leads is because there isn’t a pre-defined process to decide which salesperson get’s to work the lead.  Many sales managers still dole out leads by hand after considering who is best suited to work each of the leads. 

Most lead routing is still defined by geography.  In a day when the Internet is removing geographical boundaries and there are many effective tools to allow a full sales process to be done remotely, this is a practice that should be reconsidered.  If the sale is followed up through an inside sales or remote sales strategy, then geography should have very little bearing on the decision.  If outside sales or face-to-face sales strategies are required because of product constraints, then geography may have a strong bearing on lead routing.

If fairness is important to management, then routing by a ‘round-robin’ process that systematically and evenly distributes leads is also available.  This often creates a more desirable final result.

Better alternatives to geographical and round-robin routing are routing by performance, skills, or specific vertical market knowledge.  Both the company and the salesperson do better when leads are matched up to the best qualified salesperson.

Lead Source Tracking is an extension of the web analytics process.  The end-goal is the flow of source data from the original search engine, keyword or partner source all the way through the sales process.  This can only be done if all of the associated systems are at least partially integrated with each other or if one system is able to do it all. 

Ideally you’d be able to track closed and paid revenue back to the level of original lead sources.

Lead Response Management is a process to immediately and systematically push leads into the hands of qualified salespeople so they may contact and qualify the leads.

This is the portion of the solution that is most often neglected.  Our experience and studies show leads generally sit for an average of forty-eight hours and get called between four and five times with a ‘contacted’ ratio of only fifty-five percent.

This is the most common hand-off point between the marketers that drive the web leads and the salespeople who are in charge of responding to them.  The baton gets dropped. 

Who drives the process?  Who owns it? 

The marketers want data on how fast and how many times the salespeople respond until they make contact.  They often get frustrated because they lose control of the lead at this point. 

The sales department wants a lot of quality leads quickly.  There is a fine balance between quality and quantity.  They don’t want junk or ‘tire-kickers’ that waste their time, yet they want a continuous flow of qualify leads. 

The salespeople often don’t realize that it is their sales manager and the routing system that often slows down the process.  Sale departments get frustrated because there aren’t enough quality leads.

One elegant solution is to embed a web-form onto a website that captures the lead and pushes it real time into a database.  It then quickly routes the lead to the best suited sales rep, a telephony tool immediately gets the rep on the phone and automatically calls and connects the lead to the rep.

Why dial them immediately?

1-    Because this is the only time you know where they are.

2-    They are surfing the internet because they want help now.

While it does this, the system also moves all of the lead source data into the database for further analytics, tracks the number of calls, tracks the call time, and drives a lead response process to ensure quality control on each and every call.

Another solution is to have someone else do it for you.  LeadQual.com is the first company of it’s kind, an outbound call center that specializes in immediate lead response on behalf of it’s clients. 

Lead Qualification is the process of contacting a lead and turning it into a prospect based on the lead’s interest level.   A prospect enters the Sales Process and is further qualified for need, urgency, budget, and decision making capability.  The skill sets for this process are usually different than lead generation, in fact, they are often the reverse.  Qualifying for interest often casts a wide bucket, qualifying for need casts a small one.  Interest is often the counterfeit of need.

This process is usually done by the Sales Department, but two big problems make it difficult:

1-    Leads lose Interest very quickly.

2-    People are difficult to make contact with. 

Jacques Werth, from High Probability Selling, quotes the average Business to Business Contact Ratio is 14%.  That means you need to make 7 dials to get 1 contact. 

Our experience shows this varies dramatically by industry. Our average is closer to 10% when trying to make contact for the first time.

What is the solution to increasing your contact ratio? 

It goes back to Lead Response Management: Acquire a system that immediately and systematically pushes the leads to the best qualified salespeople, a system that also allows the salespeople to immediately and frequently respond to leads and turn them into prospects.  Again, this simple but overlooked approach can boost net results by 20 to 200%.