Smashmouth B2B Blog: Sales & Marketing Demand Gen

Sales Ready Leads: Quality vs. Quantity

Posted by Mike Damphousse

apples oranges

The topic of Quality vs. Quantity in demand gen has been a constant debate. Whether it's inbound marketing or outbound marketing there are costs associated with a lead, there are costs associated with the time and effort needed to convert that lead to an opportunity, and there are costs tied to the quality of those leads and how that impacts conversion rates.

As David Greenberg, Sr. Director of Marketing at Jive Software shares with us, "With the focus we all have right now on building pipeline that will convert to revenue, quality leads are called for. We just don't have the time to waste managing anything but."

In this example, with b2b appointment setting and pay-for-performance vendors, it is a very straight forward study as the costs per appointment are fairly standard and as SiriusDecisions and IDC have discussed, the rates of production and conversion are uniform over time.

Executive Summary: Lead gen programs that manage to Quality metrics provide sales ready leads that result in an overall higher ROI. Whether an internal team or a third party vendor, if the reps are incentivized to produce Quality appointments, the cost per pipeline opportunity can be as high as 14% more effective. In an appointment setting program, this is due primarily to cancel rates, rejection rates, and the overall quality of the meeting. Other costs to consider are the costs to manage the vendor relationship, and the cost to the sales team for attending low quality meetings.

The Numbers: In order to remain somewhat statistic-neutral, we have asked our clients to provide stats based on their experience with other appointment setting vendors and ourselves (ok, so a bit self-promoting, but stick with it). The percentages used were calculated by evaluating 5 clients' stats comprised of 1100 meetings set by Green Leads and over 2000 set by 3 other appointment setting firms. The numbers showed a significant difference in cancel/reject rates as well as pipeline conversion. The percentages used for calculation were:

  Quantity
Vendor
Quality
Vendor
Cancel/Reject Rate 20% 12%
Conversion to Pipeline Rate 31% 36%

Typical Appointment Setting Program Stats:

  Quantity
Vendor
Quality
Vendor
Meetings Set 100 80
Canceled/Rejected 20 10
Completed/Billable 80 70
Convert to Pipeline

25 25
Cost ($750 per Completed Meeting) $60,000 $52,500
Cost per Opportunity $2,400 $2,100

The Quality Vendor resulted in a 13% better investment per opportunity.

Your Checklist: Your vendor choice is obviously the most important factor in determining how your program is going to play out, so below are some things you can do to screen your vendors and aid in making a good decision. It's not a litmus test, so look for trends and patterns:

  • If they keep talking about LOTS of meetings and production - beware
  • If they won't let you interview their reps - beware
  • If they pay their reps to SET meetings as opposed to COMPLETE meetings - beware
  • If they are squeamish about discussing detailed stats, or if they don't track detailed stats - beware
  • If during a reference check you ask the client about stats and they don't match what the vendor told you, or the client doesn't know - beware
  • If they over-promote their call counts, talk time, or other non-results oriented stats - beware
  • If when you ask them what their confirmation and scheduling procedures are they don't have convincing answers - beware
  • If their rejection policy is too loose or has gray area you don't like, ask for and document specific examples. If they won't do that and you're still not understanding the policy - beware
  • If they have a short period of time by which you have to notify them of a rejection, cancel or reschedule (or the meeting is automatically billed) - beware

Also look at reputation. When asked formerly for a reference, they will probably send you to their friends. So listen when they mention client names off the cuff during conversations. Then you check them out with your network. It's a small world--find out who you or your colleagues know at those companies (use LinkedIn). Then make some of your own inquiries.

Trish Bertuzzi of The Bridge Group shared, "Mike, what a great checklist for vendor selection. There are literally dozens of vendors in this space both domestically as well as off shore. People need to understand that picking a vendor is picking a PARTNER. We wrote a blog post Third Party Vendors for Lead Qualification on this very topic. Here are some questions your readers may want to add to their list:

  • How many years have you been in business?
  • What is your attrition rate?
  • Who are your 4 largest clients? What is their size? and How many employees do you have dedicated to their project?
  • Do you provide web based reporting?

This is just a sample but you get where I am going...you have to ask the vendor as many questions about their business as they should ask you about yours."

Tags: marketing, sales, b2b, b2b sales, demand gen, outbound marketing, siriusdecisions, inside sales, social media marketing, lead gen, appointment setting, Quality vs Quantity, SMM, b2b math, idc

The ROI of Conference Calls vs. Face to Face Meetings

Posted by Michael Damphousse

b2b appointment settingEver wonder if your enterprise sales team should be on the road heading to an introductory first meeting with a prospect?  I was recently in the UK for business and saw sales reps investing a half day or more traveling for 30-60 minute meetings.  Do the results differ if they were to have taken those introductory meetings by phone?  Many would say yes, but the data begs to differ.

Green Leads measures the sales outcome of our client's b2b appointment setting programs.  We do this to gain an immediate measure of the program as opposed to waiting out long sales cycles to show true ROI.  By measuring this immediate outcome, it brings short term metrics to the program.

We measure sales outcome of the meetings in three ways:

A) Immediate Sales Activity: the meeting results in immediate sales activity (proposal, trial, second meeting, addition of other decision makers to the process, etc.)

B) Nurturable Activity: the meeting was with a prospect that had the right decision maker profile, and it has potential, but needs nurturing over time.  A portion of these will convert to sales activity over time.

C) Not a Fit: the meeting was with a prospect that had the right decision maker profile, but one or both parties decided there was not a fit, the lead is closed out.

With 5 years of data, the overall distribution of meetings is roughly a third, a third and a third:  

Phone Meetings vs Face to Face ABC

It's marginal, but the resulting outcome between phone meetings and face to face shows that phone actually has a higher percentage of immediate sales activity. 

Don't get me wrong, the value of face time is huge, but isn't the value of having an active sales process more important?  Things to consider:

  • Sales reps can conduct more meetings if using phone, and more meetings converting at an similar rate to face to face means more efficiency.
  • Reduced travel costs impacts the budget with phone meetings.  
  • With the advent of technology, web meeting capabilities, and trends in time management, more prospects are inclined to take introductory meetings by phone (poll results).  This may result in sales reps being able to have more conversations with prospects they might otherwise not have been able to.

One drawback to phone meetings, they are more likely to blow you off.  It's easy to miss a phone call, it's harder to say no to someone sitting in your lobby.  Our data shows that phone meetings reschedule/cancel 20% more than face to face. 

Me?  I would much rather have a sales rep prove to me in a 20 minute phone call why he should come visit and use my face time.  You?

Tags: marketing, sales, demand gen, b2b marketing, appointment setting, sales2.0, b2b polls, introductory meetings, b2b math