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

Lead Generation Tips - Take 3 Hour Lunches

Posted by Mike Damphousse

There were days in my lead gen life where I could have easily left for lunch and not come back for four hours. MIT data shows that that might have been a good idea!

Gerhard Gschwandtner of Selling Power just highlighted last year's MIT / InsideSales.com study of outbound prospecting lead conversion. The report details such information as the right time of day to call, the best day of the week, how the response time to a lead impacts conversion, etc.

It got me thinking. For many reps, unless territory comes into play, lead gen exists in a three-time-zone map. For years we've been able to sort our lists by time zone, but what if we could tune it even further and optimize the effectiveness our day using the MIT stats?

                    

Layer the times together and stagger them for time zone. Due to the East coast and West coast being predominant in our targeting, we tend to call 40% ET, 40% PT, and 20% CT/MT, so to simplify the discussion, I've just shown ET and PT. The timeline at the bottom is on Eastern time.

The chart shows that to maximize their production, East Coach-based reps targeting both coasts during the prime times for each time zone and assuming an 8-hour day, should be working from:

  • Target East Coast 8 am - 10 am
  • Target West Coast 11 am - 1 pm
  • Target East Coast 4 pm - 6 pm
  • Target West Coast 6 pm - 8 pm

For strategic planning purposes, this justifies bi-coastal teams. It also suggests a shift in activity during the day. Make the prime times the power-dial sessions, and make the lulls the time where research and other non-dialing activity is completed.

So the next time you run late returning from lunch, show this report to your boss and keep dialing.

More Lead Generation Tips.                    

Tags: marketing, sales, b2b, b2b sales, demand gen, outbound marketing, inside sales, cold calling, b2b marketing, lead gen, appointment setting, sales2.0, demand gen data, tips