With the seemingly relentless demands on Sales Managers to reduce costs while simultaneously increasing sales does outsourcing Lead Generation make sense?
- Why not simply get our team to generate their own leads?
- We’re paying salespeople anyway right?
- Why add the expense of an inside lead generation team or the costs of hiring an lead service?
Can’t marketing – who actually are tasked and paid to generate leads for the sales force – supply the leads your team needs? Better answer those questions or your team simply won’t have enough prospects to sell into.
Sales Funnels are Very Thin Right Now
The combination of a down economy, reduced demand and hyper-competition have reduced the amount of leads for everyone. The complaint I hear from the boardroom to the coffee counter is “I know we could sell more if we could just get into the opportunities.” Yet just knowing that leads are the very life blood of sales isn’t enough. Relying on marketing to produce sales ready leads or the other pat answers, like more cold calling simply don’t work. The evidence is clear. Look at your own sales pipelines and opportunity reports.
- Are your people chasing after any piece of business regardless of their margin or chance of success?
- Do your people have a realistic chance of meeting their quotas based on the leads they have and the opportunities they are working?
Few Sales Managers are happy with the answers to those questions. Lead and demand generation has become job one. Just getting into doors and people’s offices to sell has become our profession’s greatest challenge. We know the problem – it is the solution that has been much more difficult to discover. Brian Carroll, in his book says that the average B2B salesperson needs to generate at least $1,000 of revenue every working hour.
- Can they realistically be expected to accomplish that goal if they are cold calling?
- Is following up on weak trade-show leads and raffles any more successful?
No, lead generation and its outsourcing needs to be reexamined.
Salespeople are Not Good Prospectors
Dan Kennedy, a prolific author and an authority on sales wrote
“It’s been my observation that the weakest link in the selling chain for most salespeople is prospecting. Most people can do at least an adequate job of presenting their products or services, if there’s a reasonably interested prospect in front of them. But most of the salespeople I’ve encountered simply hate prospecting. Consequently, they avoid it, both consciously and unconsciously, and do it only when the dire necessity of imminent starvation pushes them to do it. And then they do it poorly.”
We expect salespeople to negotiate deals and be industry voices that executives want to work with. Salespeople are experts on their solutions, industry and the art of selling. Sales Managers expect their team members to walk the carpeted halls and sell to ‘C’ level business people. The skills salespeople need to do those things are very different, I would say even diametrically opposed to the skills of prospecting and lead generation. Making professionals that cost you 6 figures cold call, write marketing pieces and do other lead generation activities destroys their selling effectiveness. There are simply not enough hours in a day to do both lead generation and selling. Prospecting might get done but never consistently and without costing selling time and lost sales opportunities. So what is the answer?
Lead Generation is the Most Important Management Responsibility
Knowing that leads are the key to hitting your numbers and that salespeople are generally bad at creating them means that the responsibility for lead generation falls squarely to management. Now I know that is not a popular message. I get more pushback on that idea than any other as I work with business managers and owners. The idea that salespeople should be both excellent demand creators, deal finders and closers is so entrenched it simply won’t die. However the numbers are clear. According to CSO Insights, a top sales research firm, less than half of salespeople are hitting their numbers and making quota these days. We can continue to have unrealistic expectations on salespeople or provide them the leads they need to succeed.
That takes us to how should leads be created?
- Should the company rely on marketing or hire an outside firm to generate sales ready leads?
- Should an inside sales force be created? The tactics and methods you employ will be situationally specific.
- Do you have the budget to hire an outside firm or develop an inside team?
- Do you have a marketing department charged with lead generation, or more to the point – do they share the same view of what a real sales ready lead looks like with your and your salespeople?
The answers will be different but the overarching strategy will be the same.
What Sales Management Must Do
Regardless of how you get the job done fueling your sales team with leads the process is clear.
- First you must have a clear understanding of how many leads you need to make your numbers, both individually and for the team.
- Then you must clearly define and qualify what a lead is – what a likely buyer looks like and then create a lead ranking system for the leads generated. You do this by looking where your current customers come from and targeting the prospects that look the most like them. Only those leads that a salesperson can actively move through a buying process with should be given to the sales force. The rest remain in a marketing funnel where they are nurtured until they are ready to buy.
Right now feedback from the field indicates that less than 12% of all company generated leads result in business while 86% of those leads to eventually buy – just not from your salespeople. This disparity is caused by leads being dispersed to the field before they are ready – wasting both the buyers and the sellers time. That also explains why the majority of salespeople report that they don’t even bother with the leads their companies provide them. Creating and monitoring an internal lead nurturing process within your company solves increases lead generation effectiveness over 800%. Talk about an ROI or an improvement metric. Nothing beats lead nurturing done effectively.
Having defined the quantity and quality of leads needed for your sales force only two things remain. What activities will generate those leads and who performs those tasks? Your budget resources will determine both the activities and the manpower used for lead generation.
The rule is simple: use the lowest cost asset that produces the highest result. To do that you need to know your metrics, such as what does a lead cost you now, what is the immediate value of a lead (profit from the average first sale divided by the number of leads needed to get that win) and the life-time value of a customer. Generally it is less expensive to hire a telemarketer to uncover prospects than a 6 figure salesperson dialing for dollars.
Grease the Sled – Sales Ready Messaging
Budgets often prevent us as Sales Managers from using outside services or having an inside telemarketing staff. Often we must rely on the salespeople we have to do the work of lead generation. Who actually does the prospecting is less important than management actually preparing the process and doing the work for the prospectors. If you spend the time to research the best prospects, identify where they are and then create lead generation materials even the worst prospector can uncover a wealth of new business.
- Have you created effective lead generation letters for your team?
- Have you put together powerful voice mail and telephone scripts for your sales force to use?
- Do you role play with your team to perfect their elevator pitches and networking talks?
- Are they trained to effectively get referrals from not only existing customers but from thought leaders and industry experts that they are in contact with?
- Do your team calls and meetings prepare the team for prospecting or just deliver product training, or worse point out how bad everyone is at demand generation?
There are many things that you can do to coach and mentor your team that will produce sales ready leads and more opportunities for them to sell into. Don’t expect salespeople to create their own processes or messages. Not only does this result in different messages throughout your team and market it gives you fragmented and inconsistent results.
Find ways of developing leads for your team. Work hard and diligently at the messages, collateral material, skill development and resources they need in order to have opportunities to sell. This will give your salespeople more selling time to win business. They will be more motivated doing what they love to do – sell. Most importantly it will rocket your sales numbers up while making everyone happier, wealthier, and more successful.
Russ Emrick is a sales coach with almost 30 years of experience as a Salesperson and Sales Manager. Having sold over $120 million dollars worth of goods and services to other businesses Russ now concentrates on coaching other sales professionals on how to succeed in the new economy of 21st Century. More information about sales and lead generation can be found at www.breakoutselling.com.