Lead Management – “Working a Lead”
As someone that has spent a lot of time on the prospect side of the table, I am often amazed at the “great” follow-up on the part of salespeople to whom and I have spoken and to whom I expressed some interest. While there are some products and services that are quick hits, “impulse items” if you will, like gum or cheesy celebrity magazines at the checkout aisle, often the purchase is part of some larger process going on at the company and constant calling simply can’t affect that.
Our own sales efforts with the AMG Alerts notification system and to a lesser extent, the SalesInSync sales lead management system are typical. The larger the company – and the carrot – the less likely that constant hounding would have any effect. People are positive and give us all the GO signals and then disappear for however long it takes for them to move forward. That can be months, and harassing them in the meantime, while probably not a deal-killer, is at least going to leave a bit of a sour taste in their mouths. What we experience as customers is intense contact followed by a disappearing act. That’s not the way to do it.
Sales resources (and really just about all business resources) are in short supply for most companies. You have to be smart, have a sales process that involves staying visible without invading personal space, and have at least a simple, collaborative CRM System that assists in this. Too many people have a hot list on paper and work those, and as they get new leads to “work”, the old ones disappear to the bottom of the pile and then off the desk completely. I recommend our other blog post about the Marketing Shell Game, which is another commentary on sales process management.
Lead Management System Deployment to Channel Partners?
Many manufacturers use independent distributors as a primary sales channel. Even if the manufacturer has a great market presence and may appear to have their choice of distributor, a good distributor is still to be coveted in the same way a seller has to covet a customer.
This means that support of the distribution network is key, with elements that include training, good communication, and sales tools.
Good local distributors usually develop their own sales leads and have their own sales operations – and this in fact is a primary selection criterion for a manufacturer. The distrinutor needs to add value in some way, and this is a primary way to do so.
However, some manufacturers like to augment their distributors’ lead generation efforts by supplying leads of their own. Often, these leads are derived through expensive sources. These well-intended efforts, at least as a program, tend to be short-lived for the same reason why many other lead generation efforts are “events” rather than processes – the person paying the bill can’t measure the result due to lack of visibility.
A manufacturer will say “I spend $5,000 per month on my construction leads and I send them out and never know if anything came of it. I stopped doing that. I don’t even know if these things are followed up.” When we mention the possibility of putting in SalesInSync for this purpose, we hear “I can’t force them to use any particular system.”
But that response isn’t completely true. The problem is that the lead program had been rolled out to the distributors without all the tools in place. The program should have been rolled out so that basic disposition reporting was a requirement. Provide at least one SalesInSync user license free of charge, for distribution of the lead. Maybe the program will spread within the distributorship. Maybe it won’t. But the distributor will have to log into the system to retrieve the information and will have to provide some information on the resulting activity in order to keep receiving them. It’s not much to ask in exchange for valuable incremental business, and those (many) sales operations without an effective lead management system may get on board completely, which will make their own lead handling more effective and provide a high ROI for the manufacturer.
Unlimited Messaging and Other Wrong Pricing Models
As entrepreneurs, it pays to establish sustainable pricing models. Give away the store in the heat of competition and you might find it boarded up in two years, with all of your potential gone. Yes, it’s tempting to try to “hook” people, feeling that you can make adjustments down the road, but that rarely works, for a couple of reasons. First, it’s really difficult to go back to your original customers, who believed in you and helped MAKE your company, and stick them with a new structure. Second (wouldn’t you know it?), more often than not, downward price pressure in popular markets will not allow you to bump anything up significantly.
In our AMG Alerts notification system sales efforts, we have encountered many customers who want a one-price “unlimited messaging” plan. And some of the companies in our business actually try to accommodate this. But how can they, when the cost of telephony and SMS and even email messaging is variable?
It’s easy. If you are in the employee notification system or emergency alert system business, you have a clear choice to make. If somebody is to lose, it can’t be you. So it would need to be the customer. Charge enough so that in any realistic scenario, you’re covered. If the customer might realistically send 50,000 messages per year, make sure they pay for 500,000 just in case.
And of course, the customer is hoping that you will charge them enough to cover 50,000 messages per year, and if they happen to use 500,000, they won’t have to pay extra. The “vendor” will just take the loss. I literally had one of the nation’s largest propane gas suppliers approach us to do customer messaging. It would start at perhaps 10,000 messages in various modes per month. But after a certain number – for which they were willing to pay – they wanted the messaging to be free, even if they sent 10 million per month. Yes, FREE. They eventually did not sign up with us, saying “we don’t like your pricing model.” But alas, the world has tied our hands until many magical things happen. For now, it would be like their buying gas for their trucks from petroleum company XYZ and asking that after the first 100,000 gallons, the gas should be free.
It’s an open economy and everyone is free to do their dance and roll the dice. But we make the point to our sales prospects that our going out of business is not an option. As a supplier of their alert system, they don’t want us to. And even they are willing to take the risk with us, thinking that they will just find another supplier, we owe it to our OTHER customers to stay in business.
So what do we do? We just won’t do “unlimited” pricing. Since we know we would need to offer a price where we would be the guaranteed winners, the customer would usually need to pay anywhere from 5 to 100x more. That just doesn’t make much sense as a LONG RUN pricing strategy.
At the end of the day, it is best to educate your customers on the economics of the business and be fair and establish pricing and policies that reflect the cost of the service. Honesty will cost you business every once in a while, but you will win with increased loyalty on the part of your customers. This is especially true if you are providing a critical service. They may be trained in their consumer lives to look for what appears to be a “deal”, but in a partnership scenario, it gets a little more complicated.
Pitfalls for Entrepreneurs Part II
“What on earth is he DOING?” is no longer my question, (from the first article) because I have had the opportunity, through one or two subsequent meetings, to figure it out: My friend (were still calling him Kevin) doesnt have a clue about selling.
Now I am not here to make fun of him for that. At the end of the day, it is a skill that is lacking to some degree – sometimes totally – by almost everyone who runs a business. And I’ll raise my hand here too. So whatKevin does is continually expand his product offerings.
I guess I’d liken it to the old days where the soldiers would storm the castle in an attempt to penetrate and overcome the enemy. Imagine 100 troops rushing the castle wall and putting their shoulders into it trying to knock down the wall. A good commander would call them back and say “Boys, that isnt going to work. Bring up the cannons.” Then they would proceed to blow holes into the wall and rush in. Kevin is the kind of commander that says “Boys, keep at it. Im sending another hundred guys to help you push.”
Ever hear the expression If all you have is a hammer, every problem is a nail? Well allKevin has is another hundred guys, and maybe another hundred after them. He doesn’t have a cannon, so he solves his problems using the tool he has. In this case the tool is his big brain and willingness to do hard work. It is easy for him to come up with other ideas and set them out there for people. But he doesnt know how to blow any holes in walls. In fact, he took me through a lengthy presentation he was going to make to what could be a significant new customer – if he could do some selling. He goes on and on about not only the product he is trying to sell, but all ancillary offerings that his company has, almost straining to somehow get that in. In the meantime, I am the customer, saying. “Why do I care about this. Why SHOULD I care? Where are we going with this?”
The presentation should have been heavily customer focused, shortened, and broken up into bitesized chunks that allowed for better focus. (kind of like this blog article) There probably should have been an outline in the front. And before that, some reference to the problem or challenge that the customer has expressed that he has and a direct statement about what he was offering to address that challenge. But let’s stop there because we are getting into sales training and that is a whole other topic.
The bottom line here is that if you are an entrepreneur that has an offering that you KNOW can and should be more successful in the market, think twice before looking to increase sales revenue with another offering and then another. Yes, there are some legitimate reasons for that sometimes, but we all must question whether we should be spending our resources getting ahold of a cannon and breaching the wall in the way that a good commander would.
Quantum Mechanics in Sales Forecasting
I am not sure that this doesnt simply qualify as a Rant. I mean, I feel like I am ranting, but that is a common feeling for me as I am pounding at my keyboard.
Often when working with a sales or marketing manager in setting up their SalesinSync Lead Management System system I will suggest setting up their Probability (of close) percentages in increments of 10, i.e. 0%, 10%, 20%, 30%, etc. Every once in while someone will say, “oh, come on, nobody can guess that close. Gimme 0%, 10%, 25%, 50%, 75% and 100%.” Sometimes the choices are even more limited, like 0, 35, 50, 80.
Okay now I KNOW that this is a rant because it doesn’t happen often. But when it does it is irritating. The point of ALLOWING SALESPEOPLE TO GIVE THEIR BEST GUESSES is that, collectively, the data will be more accurate and precise. This is a simple statistical exercise. This will always be the case unless some extremely weird mechanism is in place due to bad management elsewhere. The sum of all these supposedly problematic uncertainties makes for a the BEST guess, most of the time!
So why not have a dropdown that allows 1 percentagepoint increments? Simply because then it becomes a bit of a farce and salespeople will not like using the interface. Our suggestion is to provide to the sales force the highest level of granularity that is reasonable. Maybe it is in 5 point increments. Who knows? There is simply no reason to force someone to select a number that does not reflect what they feel. Frankly, it can be frustrating and cause the user to question the process, as well as the value of the information. Once that starts happening, the game is lost because salespeople want to be making money and not punching numbers into a system they don’t believe in
Pitfalls for Energetic Entrepreneurs
“Focus, Focus, Focus.” This is a mantra common in the world of entrepreneurship and small business startup. I have a friend (let’s say “Kevin”) who runs a multimedia production business. He is a brilliant, personable guy, who is very technical. His business focused initially on development of training programs. He is no salesman nor a sales process guru, and where his new business in the area of multimedia training came from was really a mystery. Like a lot of us, he probably just had some faithful connections. He branched off into some web development because a lot of the talent and tools that he had on hand for multimedia lent themselves to that area. So Kevin threw paint on another wall, and the incremental revenue from web allowed him to keep the doors open. I mean, throw some paint here and there, and a passerby will see it and something might happen.
Fast forward about eight or so years, and Kevin and I get together to see what each other has been up to. He shows me a new CRM product that he has developed – a competitor to SalesInSync – for tracking the sales process (not sure if he used it himself!), and then a complementary offering that does lead generation. Mind you, nothing has changed in his business, fundamentally. He still has the same business size. He still does multimedia training, and a web site or two. But more paint on the walls means he doesn’t need to sell as much multimedia training to maintain his revenue. On top of that, Kevin showed me customer support offering that he also had developed. I am not sure that he has sold any of that as of yet, but that was a major streak of paint on another wall. The we go back into a production area where an employee is working on – you guessed it – a multimedia training program, and he shows me a 3D rendering of a modern office building, with cutaways and wiring diagrams and equipment layouts that just knocked my socks off. I said, “you know Kevin, I’ll bet architectural firms would drool over that.” He got excited and said “Yes! That is something we should go after!” I thought to myself as I left, “Man, what on earth is he DOING!?”
When I got home I noticed a pilots supplies catalog on my coffee table which really only had been used for putting my feet on if I had shoes on and my wife was around, and I took a stack of those mini PostIt notes and marked every page where there was some multimedia training program being sold. The catalog was absolutely thick with them, and I thought that if Kevin could just sell to ONE of those companies, he could increase his business tenfold. So I have lunch planned with him and I am bringing my dogeared catalog.
So what is focus? It isn’t necessarily sticking to one area. I mean, if you have the talent and tools, why not branch out, as long as you can maintain an identity that is not confusing. Paint those walls, but don’t throw it all over the place! Finish one room before going on to the other. Have a plan for success here before moving there. Or at leastbe willing to abandon here and go there with renewed energy. Just about anyone can look at their business and determine quite readily if they have the processes and resources to be successful on many fronts. Most smaller companies cannot. So therein lies the Focus mantra.
What’s With These High Sales Targets?
I have heard salespeople lately express their concern over what they consider to be high sales targets in view of our current economic situation. “Whats my boss thinking? Nobody is spending any money right now!” “This is just a terrible time to (start a business/keep the business/stay in business/sell anything)”
While I would concede that unrealisitic sales targets are sometimes improperly used by sales managers in a clumsy attempt to motivate their people, I am not ready to admit that this is a terrible time to attempt to do business. And even though at the time of this writing, the numbers have not gotten much better, for a salesperson, now might be a pretty good time and it will only get better. Let’s start with this unscientific, and possibly annoying truism: Somebody is going to sell something. So it might as well be you.
Now that that is out of the way, lets dig deeper and look at why you shouldnt just chuck it in and go looking for a new career:
- Not all industries are experiencing a slump. Have a handle on the dynamics of YOUR marketplace and don’t get distracted by all the attention that our recession is getting. If you have to stop watching the news or reading the newspaper, go for it.
- Your sales prospects are more likely to be looking for new suppliers NOW than in more comfortable economic environments, often owning to their desire to reduce costs. Doors that were previously locked are going to start to swing open. This means a whole new world of opportunity. Your focus should be on exploiting that.
- Are all of your competitors still in business? Good. That should be a signal that there is still opportunity. Are some of your competitors out of business? GREAT! Now you are there to fulfill some unmet market needs. A market shakeup can provide great opportunities for everyone from dominant powerhouses to pipsqueaks that previously had no chance.
- Making even the slightest inroads now, on sales volumes that never excited you in the past, may pay big dividends down the road when your customers start consuming more and now YOU are the supplier. That is exciting, and should be quite motivating. That’s the reason to push harder!
I am not willing to give most sales managers credit for well thoughtout targets. Many are just reacting to their bosses, who are often too removed from the word on the street and are just trying to make some numbers work. But certainly it can be an exciting time to be in sales when it is NOT business as usual, for some of the reasons above.
Lead Management System Setup
Companies are implementing sales information applications, or sales lead management systems,or web- based CRM systems (or whatever you want to call them) by the thousands, every business day. What is amazing is the little thought that actually goes into the setup. This lack of planning is a theme within some previous article and undoubtedly will be for many other articles.
As we have deployed SalesInSync within hundreds of companies, there is one simple mistake that can absolutely bring down the house: field redundancy. This is when you force users to put basically the same information into the database in two or more different spots. The most common example is having both sales Cycle Stage – where they are in the broad spectrum as they move through the funnel – and another field that classifies the record by whether they are just a suspect, or a prospect that has not yet had a proposal, or one that has had a proposal, or is now a customer. Sound identical? Well, yeah! So why do so many companies have databases that are set up like that?
An extreme example that I encountered the other day was a setup where the company had one field for the ABBREVIATION of the Lead Source, and another for the FULL NAME of the Lead Source! This type of thing destroys the database, and then ultimately takes the entire sales information infrastructure with it.
You see, as salespeople fill out information on the form, whether it is web or locally-based, they will not reliably take the time to make sure these redundant fields are filled out or are in agreement. In fact, even presenting a salesperson with a form such as this will make the smart ones question the value of the program as a whole, and they will ultimately use the database only in the way that it benefits THEM because their confidence in the intelligence or abilities of the rest of the organization is shaken, no matter how subtly and/or subconsciously. Once that data is not reliably entered, its value as a tool for analysis by sales management and marketing is greatly reduced. And then the ugly part happens – the database itself is deemed “ineffective”, and that is blamed on the salespeople, and the database, and everyone else that has come within a half a mile of it. The solution is to chuck out the old database and start over. The cost of doing this enormous, and it happens every day.
A sales activity database needs to have fields that are mutually exclusive, and that reflects the philosophy of sales management with respect to the sales process. Ideally, Marketing will have a role in its design, to the extent that their efforts feed those processes.
The High Cost of In-Sourcing
Let’s not consider, for now, of the normal outsourcing argument, that often it is possible to save significant money by using outside assistance from people who are set up to do whatever it is that needs doing. To do that kind of outsourcing is often (but not always!) a no-brainer.
Let’s talk about other cases, though. I recently worked with a company whose overarching philosophy was to do everything in-house, presumably with the simple view that “We already have these people, and they have talent, so why should we spend additional money by outsourcing?” Or, in the case of technology, “We can figure out this problem on our own. There are lots of good resources out there.”
This latter point really does resonate with me. It is almost always true. In fact, for the sake of this article, let’s dwell on that.The vast majority of people in the U.S. that are involved in IT have zero formal training in it. And we are not talking about your brother-inlaw that somehow cobbled together a web site for his company. This group also includes real, highpowered techies and tech business visionaries. Got a problem? Google it. And then maybe you’ll end up joining one of the hundreds of great technology forums that address every popular area of IT, inhabited by lots of people that are willing to share their knowledge.
But there are a few reasons why straightup outsourcing of your technical issue is a better choice, despite the availability of these awesome resources:
- Faster time to market implementation. Often, all of the flailing around trying to cobble together a solution has measurable opportunity cost. And when I say “often”, I really mean “anytime you are doing this as part of some business objective, rather than a) for your health, or b) to make the world a better place”. Why not just go and get the thing done and move on to meet your objective, within your company’s’ core competencies?
- To answer questions that you do not know enough to ask, or at least had not thought of asking. I have used technical forums many times, and my question was answered and then I successfully moved from Challenge 97 to Challenge 98, moving across the raging river on those slippery stones hoping to make it to the other side. I have also, by necessity, given whole projects to outside firms. I was happy I did because as I subsequently looked at what they did, and I learned techniques that I would have never used or even thought about. That knowledge was integrated into dozens of other existing processes, greatly benefiting my organization.
- To develop a relationship and a backstop for times of need. Business relationships, especially tactical ones that center around complex solutions, take some time to develop. When things go bad, VERY bad, you cannot just start dialing numbers from the Yellow Pages and yelling “HELP”. The value of someone that knows you, and has not only a vested relationship with you and your company, but also some knowledge of how you are doing things, cannot be overstated. So starting with your next challenge, consider picking someone else’s brain. Maybe you’ll take on the next dozen on your own, which is great. But when you find the right outside resources, you will quickly see how you can benefit.
Sales Lead Management 101 (or, The Marketing Shell Game)
DISCLAIMER: I am not a marine biologist.
You are at a beach, and for about as far as you can see, there are shells scattered around. They are mollusks. Some of these mollusks are oysters. Some of them even contain pearls! (By the way, in case I forgot to mention, that is why you are there.) You aren’t there to get a suntan or to see bathing suits. And you brought 10 people with you in a search for pearls. You turn around and say to your team, “Alright people, lets get em. Go!” And your people start running all over the place on the beach, looking at each shell, determining if the mollusk is an oyster and whether it has a pearl that is big enough to harvest. Once the determination is made, the team member throws down the shell and runs to another one that they are sure they have not yet examined. You see people gathering pearls! Things seem to be going pretty well. At the end of the day, your team comes back and puts the pearls in your little red plastic pail. There sure are a bunch in there. Looks like your team did a number on this beach! Time to go home. We’ll come back tomorrow.
Okay, lets get into land mode. The beach is a market. Maybe it is your only market. The shells are suspects (someone that fits the broad profile), an oyster is a prospect (someone that actually uses what you are trying to sell), and the harvested pearls are sales. The pearls that are not harvested because of their size are sales that will occur when the timing is right. Theyre still growing. Does the above description of the pearl hunt in any way resemble your approach to sales lead management? If it does, don’t feel bad because the great majority of companies do the same thing turn people loose to dig up pearls. These are companies that have afinite and identifiable set of suspects, and could be doing things differently, whether using a lead management system or sales management system such as SalesInSync or some other web-based CRM system. So what’s wrong with the “just go wild” approach I described?
Wouldn’t it have been more effective to gather every single shell on the beach (“own” the market by owning the informatoin, another Groundroll article), bring them to a central location, divvy them up among the team, and methodically examine each one? The shells that are not oysters get put in a special bin. They are not randomly tossed back. The oysters that do not contain pearls of any size get put in a similar special bin, and the ones that contain smaller, nonharvestable pearls are in another bin. The ones wherein you picked a pearl are put into the fourth bin. The bin we are talking about in this case is simply your sales database, from Excel sheets to a Lead Management System such as SalesInSync. We even have seen customers with shoeboxes of 3×5 cards as their lead management system. At least they kept the information! This article will stop here for now, in case the analogy is getting tedious or making people seasick. But the concepts will certainly form the basis of much of what is on this site, so look for more pearls of wisdom or annoying grains of sand.
-
Archives
- September 2012 (1)
- July 2012 (1)
- June 2012 (1)
- May 2012 (7)
- March 2012 (6)
-
Categories
-
RSS
Entries RSS
Comments RSS
groundroll.com 