Tuesday, January 20, 2009

Salespeople: One Question Matters Most

Back in December, the Sales Lead Management Association and LEADTRACK published a survey on lead management practices that I haven’t previously had time to write about. (The survey is still available on the SLMA Web site.) It contained 10 questions, which is about as many as I can easily grasp.

The two clearest answers came from questions about the information salespeople want and why they don’t follow up on inquiries. By far the most desired piece of information about a lead was purchasing time frame: this was cited by 41% of respondents, compared with budget (17%), application (15%), lead score (15%) and authority (12%). I guess it’s a safe bet that salespeople jump quickly on leads who are about to purchase and pretty much ignore the others, so this finding strongly reinforces the need for nurturing campaigns that allow marketers to keep in contact with leads who are not yet ready to buy.

Note that none of listed categories included behavioral information such as email clickthroughs or Web page visits, which demand generation vendors make so much of. I doubt they would have ranked highly had they been included. Although behavioral data provides some insights into a lead’s state of mind, it's useful to be reminded that wholly pragmatic facts about time frame are a salesperson's paramount concern.

The other clear message from the survey was that the main reason leads are not followed up is “not enough info”. This was cited by 55% of respondents, compared with 14% for “inquired before, never bought”, 12% for “no system to organize leads”, 10% for “no phone number”, 7% for "geo undesirable" and 2% because of "no quota on product". This is an unsurprising result, since (a) good information is often missing and (b) salespeople don’t like to waste time on unqualified leads. Based on the previous question, we can probably assume that the critical piece of necessary information is time frame. So this answer reinforces the importance of gathering that information and passing it on.

One set of answers that surprised me a bit were that 77% or 80% of salespeople were working with an automated lead management system, either “CRM/lead management” or “Software as a Service”. I’ve given two figures because the question was purposely asked two different ways to check for consistency. The categories don’t make much sense to me because they overlap: products like Salesforce.com are both CRM systems and SaaS. Still, this doesn't affect the main finding that nearly everyone has some type of automated system to “update lead status” and “manage your inquires” (the two different questions that were asked). This is higher market penetration than I expected, although I do recognize that those questions deal more with lead management (a traditional sales automation function) than lead generation (the province of demand generation systems). Still, to the extent that CRM systems can offer demand generation functions, there may be a more limited market for demand generation than the vendors expect.

One final interesting set of figures had to do with marketing measurement. The survey found that 23% of companies measure ROI for all lead generation tactics, 30% measure it for some tactics, and 47% don’t measure it at all. The authors of the survey report seem to find these numbers distressingly low, particularly in comparison with the 80% of companies that have a system in place and, at least in theory, are capturing the data needed for measurement. I suppose I come at this from a different perspective, having seen so many surveys over the years showing that most companies don’t do much measurement. To me, 23% measuring everything seems unbelievably high. (For example, Jim Lenskold's 2008 Marketing ROI and Measurements Study found 26% of respondents measured ROI on some or all campaigns; the combination of "some" and "all" in the SLMA study is 53%.) Either way, of course, there is plenty of room for improvement, and that's what really counts.


Steven Woods said...

I think you're seeing a bit of a "people wanting faster horses" situation, if I can steal a bit from Henry Ford. You're right that the key indicators to look for are those that govern purchase intent/timing. Everyone agrees with that. The real challenge is that it's hard to solve. Prospects are far too intelligent to fill out the "purchase timeframe" field with anything remotely accurate.

To succeed, you need to understand purchase intent, and the only realistic way to do that is through behaviour. You are absolutely right that sales generally doesn't care about the nuts & bolts like raw opens and clickthroughs. All the activity metrics need to be boiled down into the best approximation for purchase intent and timeframe.

That's where we're seeing high performing sales & marketing teams really stand out from the pack.

Thanks for bringing up a great topic.

David Raab said...

Thanks Steve. I suppose it's true that prospects often won't provide accurate timeframe information, presumably for fear of being pestered by salespeople. This is a sad commentary on what a poor job many salespeople do in helping their prospects, but that's a topic for another day.

The utility of behavioral data is a many-layered issue. High activity levels could indicate strong near-term purchase intent, but they might also have other causes. So you need a pretty sophisticated scoring model to isolate the people you really want. Then, you have to convince salespeople that you've done this correctly--which probably will happen only when they find out for themselves how those leads perform. Finally, you need a feedback mechanism based on actual results to improve the accuracy of your scoring technique over time.

It's also worth pointing out that the few prospects who openly admit they are going to buy soon are almost certainly the best of the best. So, from a salesperson's perspective, answers to that question are indeed the most useful measure of a good prospect. What the salespeople don't see are the prospects who are going to buy soon but don't say so. Behavioral analysis should help to identify these, but it takes some convincing to get the salespeople to accept the behavioral-based scores as valid. I suppose, as you write, that having accepted this is what makes high performing teams stand out from the rest.