How many touches should it take to assign a lead?

March 17, 2010 at 1:23 pm | Posted in Key Performance Metrics, Lead Management | Leave a comment
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Of the two options given below, which is the better method for delivering leads to sales representatives?

  • Option A: Set up 3 territories for the whole US with 3 territory owners. Have them manually review each lead and reassign them to a more local sales manager. Then have the sales manager review each lead and reassign the lead again to the sales representative that is best suited to contact the lead.  Number of touches = 3.  Time elapsed = hours? days? weeks?
  • Option B:  Set up territories for every sales representative in the company so when a lead comes in it gets immediately and automatically routed to the best suited sales resource. Number of touches = 0.  Time elapsed = 1 minute, tops!

I continue to be surprised by the number of sales executives that want to go with option A.  Sales people typically do not want to spend their time on paperwork or process, nor can you count on them to quickly reassign a lead to someone else.  The lead sits in their territory until Friday afternoon when they are done making sales calls… then it finally moves down the hierarchy to the appropriate rep.  In the meantime, the lead has grown cold.  This month’s issue of the US Post Office’s “Deliver Magazine” has a great article that cites a 30 minute contact rule for all web-based leads in order to maximize conversion.  That’s not even possible with 2 touches, much less 3!  

A good lead management system must be flexible to automate lead distribution rules based on almost any variable -

  • Geography:  zip code, state, MSA, county, country, etc.
  • Product line
  • Vertical focus:  legal, healthcare, hospitality, etc
  • Budget size
  • Channel preference:  branch, dealer, VAR, distributor, etc.
  • Named accounts:  (Big, national accounts get special service and sales support)
  • Keyword filters
  • Lead source
  • And more

There will always be exceptions in a complex selling solution where a lead cannot and should not go below the VP level.  But this is the exception, not the rule! 

Disagree?  Let me know.

What is your Cost Per Lead?

February 10, 2010 at 3:10 pm | Posted in Key Performance Metrics, Lead Management | Leave a comment
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This is just a brief rant today about what marketing people are willing to pay for a lead.  I am dazed and confused by the advertising dollars I see spent on low-quality leads.  Even more befuddling is when someone is willing to spend hundreds of dollars per lead, but hesitates on spending any money to ensure that it actually reaches and is followed up on by a sales person.  

Here’s an examle of how to think about cost per lead:

  • The trade show cost you $50,000 including the booth space, personnel, collateral, travel, etc.
  • You generated 85 leads 
  • The leads cost you $59 each 
  • Your cost to traffic the lead to a sales rep should be around $6.50 each (10-15% of the lead cost)
  • Knowing your lead went to a rep, it was looked at and acted upon, and getting ROI on the lead source = PRICELESS  (sorry – couldn’t resist)

How do you know if you’re paying the right amount for a lead?  Research shows that the average cost of a B2B sale can typically be computed as 2.5% of your average sale.  It makes sense to base the cost of your leads on your average sales amount as leads that result in $100,000 sales are certainly worth more than those that result in a $1,000 sale.  But don’t stop there.  You must also assume there is a cost to deliver that lead to the correct sales rep.  It’s a good idea to take 10-15% of the cost of the lead and set it aside for solid lead management processes or systems.  Marketers that plan on costs for lead management are the ones that later can focus on their real jobs versus jockeying spreadsheets of leads between various sales entities, trying to prove that the latest campaign was successful. 

If a tree falls in the forest and no one hears it, does it make a sound? If a lead is generated and no one receives it or follows up on, should you have bothered spending your time and money on it in the first place?

What happened to that lead?

January 20, 2010 at 10:26 pm | Posted in Lead Management | 1 Comment
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For those of you that sell direct, the answer is probably obvious.  You can look at the lead in your CRM system and see what your sales rep did or didn’t do to follow up on your hard-earned lead.  Since leads generated by many manufacturers are distributed to independent businesses (dealers, VARs, Wholesalers, etc.) there is no CRM.  There is only a gigantic, gaping black hole. 

Some manufacturers email leads, one-by-one, out to the channel rep.  Some put leads into excel spreadsheets (one spreadsheet per dealer) and then have to resend the spreadsheet over and over again, asking the dealer for a status update.  I’ve even heard of a team dedicated to following up with distributors to ensure the distributor is following up with the lead.  A follow-up to your follow-up?  Is this really efficient?

On the other end of the spectrum, some manufacturers are enforcing the entry of a ”lead id” when a dealer places an order.  The total amount of the order can then be attributed to the lead id which hopefully can be attributed to a specific source.  Unfortunately, most dealers/distributors don’t order from a manufacturer for just one client.  They group their orders and sometimes include items for inventory.

Not only do many companies not know if a lead converted to a sale or not, they also do not know if the end user was treated well by the channel rep.  Let’s face it… they don’t even know if the rep called them and if they did, did they pitch their product or a competitive one.  It’s hard to think about your leads(the ones you sweated to get and qualify) not getting attention.  Now imagine they are being sold a competitive product!!  I can’t stand it either.

I’m suggesting a very simple solution that any company can implement quickly and inexpensively to find out WHAT HAPPENED TO THAT LEAD.  Consider this – simply ask the lead.  Approximately 30 days(or longer based on your sales cycle) after you’ve assigned the lead to a rep, follow-up with that lead with an online survey request.  Most survey tools are inexpensive if not free and you can gain invaluable info:

  • Did the sales channel rep contact them?
  • How fast and in what way?
  • Did they purchase your product?
  • Did they purchase a competitive product?
  • What was the price range of the purchase?
  • Would they refer <company name> to a friend?
  • Would they refer the local dealership/sales rep to a friend?
  • And more

Survey responses can be tied back to the lead record and after awhile you’ll have enough data to make statistically significant calculations about lead sources and your sales representatives.  If you really want to boost survey responses, send a reminder 7 days after your initial invite and/or add a $1 – $5 incentive for completion.  Amazon gift codes work well!

Why B2B Sales Lead Management Needs Another Blog

January 5, 2010 at 4:09 pm | Posted in Lead Management | 1 Comment
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In my line of work I’ve been exposed to a lot of research, visited numerous sites and blogs, and attended conferences left and right.  Between that and problem solving for our existing clients, I’ve come to know a lot about B2B sales lead management. Credit is due to the “masters” I’ve met and heard speak over the years; Brian Carroll, Howard Sewell, Steven Woods, many of the people at Marketing Sherpa and others.  Yet I believe a large part of the B2B lead management space has been neglected.  It’s possible that I’m the only person who thinks this is a big deal.  I’m talking about manufacturing companies that sell through a complex channel:

  • Dealers
  • Branches
  • Value added resellers
  • Distributors
  • Wholesalers
  • And any combination of the above, indirect mixed with direct

It’s probably due to the complexity of handing off leads to possibly hundreds of individually owned and operated companies (while still needing to prove ROI).  Almost all marketing departments are tasked with filling the pipeline with leads.  Now imagine you’re responsible for filling the pipeline by channel, based on each channels’ revenue goal for the year.  The dealers get 42%, internal employees get 42% and VARs get 16%…  Unless the lead is within a specific geography, or for a specific product line that only one channel carries, or for a specific promotion that is channel-specific regardless of ratios or territories.  This takes sales lead management to the next level. 

I’m not just talking about qualifying, scoring, nurturing and loading leads into your CRM solution.  This can’t be done when you’re selling through channels.  Imagine trying to talk 450 independent dealerships into paying for a license to salesforce.com so they could view and follow-up on leads (especially if they are multi-line). They aren’t going to do it and the costs don’t scale anyway.   Furthermore, how can you hand them a lead and then nurture it if you don’t know what activities they’re performing against the lead?   And maybe the biggest hurdle; how do you get them to report sales back to you so you can tell which lead sources are closing and therefore successful?  

How do you ensure there is “no lead left behind”?

B2B sales lead management for the channel is a different animal. I’ve been working in this space for almost 10 years now and want to share what I’ve learned while soliciting feedback from others that are in the same boat.  I’m looking forward to your comments, questions, suggestions and replies to my rants and raves.

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