Tim Sandford's blog

Short term thinking - the lead generator's dream

In the last few months we have seen a growing number of companies in a variety of sectors from telecoms to technology looking for sales leads to solve their short term problem, namely a lack of leads. In every case these customers have worked in markets structured around contractual tie in. Put simply they work in sectors where the vast (95% +) majority of their target market are contracted to a supplier for 1, 2 or even 3 years. We also note that none of them have a database of any size or accuracy, so they have no knowledge of who is in contract, when it ends or who their suppliers are – all fundamental for this kind of market.

So here is a simple question, if less than ten percent of the market might be considering changing supplier, how do any of these companies know who they should be speaking to and when to stand any chance of making a sale? The truth is they don’t and unless they start to think more intelligently about the market they serve, they won’t.

This is how short term thinking works – “Feed me now. I need leads because my sales guys don’t have any.”

The short term thinker’s answer is mass telemarketing, e-mail blasting and other relatively untargeted activities designed to generate leads. It does generate leads, but we are constantly told that leads generated this way are poor, by the same people who come to us asking us to generate better leads than the ones they get from lead generation.

At the end of all this frenzied activity, a few leads have been generated for these companies, but they still don’t have a database with useful information that includes contract end dates or suppliers. As a result they never move forward and get beyond their short term problem, having to revisit it again and again and so on.

As cycles go this is a pretty pointless and self defeating one, which can very easily be avoided. You need just two things:

• A database full of accurate data about your target customers, when their contracts end, who their suppliers are and what they have. (You can buy them, but they are usually inaccurate, so you are better building them yourself)
• Even a fairly simple understanding of how to nurture your market and ensure that you get a chance to pitch your products and services when a target customer’s contract is up for renewal.

With these two things you can work smarter and focus your efforts only on those potential customers that might be in the market. Of course there is one last thing you need – desire to get off the short term thinking rollercoaster.

This is the last time I will talk about short termism and why it just doesn’t work as in sales and marketing. If you haven’t got it by now, then we can’t help you get the quantity of leads you actually need.

Why Short Term Lead Generation Activities Do Not Work

In the last couple of weeks we have been approached by a number of companies all of which have been struggling to generate the number of sales leads they need, let alone the ones they want. All of them have gone through several telemarketing agencies recently, in one case 4 in a 3 month period. In every case the result has been a resounding failure both in terms of quality of lead generation and secondly quality of lead generation.

We are always pretty surprised that companies continue to go down this road, even when in their heart of hearts they know it doesn't really work anymore. You see the simple truth is this, buyers are too sophisticated and too cynical to listen to the kind of over hyped sales messaging that goes on and secondly we know from our research and others that over 70 percent of buyers and decision makers will not take an unsolicited sales call.

 So why do people keep going down this road? Simple their sales pipelines get a little empty, so they think about a short term fix because well the long term will take care of itself, won't it? Well won't it?

Sorry to be the bearer of both bad news and the truth, but no. For most companies in most markets, there are no short term one hit, magic, silver bullet, cure all, solutions for lead generation.

 This isn't new, it's been around as a growing trend since the mid nineties when the Internet  enabled buyers to stop meeting sales people because they could evaluate and shortlist potential suppliers, quietly, stealthily and behind closed doors, just by visiting their websites. All that's happened is that the current economic hiatus has finally brought it home to roost because there are fewer opportunities and those organisations that are still relying on old marketing approaches and thinking are now really feeling the change in buyer behaviour.

There is however a way forward. Download Why Sales Must Change 2010 - Market Transformations.

This opens a pretty big A3 PDF that shows how we think the problem can be overcome. Happily we are not alone, spend some time looking on the web and you'll no doubt find a few, but the one thing you'll find about all of us is that we are unlikely to make big, fast, huge, tomorrow, guarantees. This kind of programme takes time to work properly, but once there it really does work. The short term will generate opportunities but not in huge volume, those are the low hanging fruit as they say.

 

Lead Generation and how to make it work

The great thing about a week in the sun is the time it allows me to digest what goes on in the day to day world of marketing and lead generation. So here’s the thing. Lead generation, would you like to know what really makes it work?

The first we need to do is build a little understanding about what lead generation actually is. In our world, the purpose of lead generation is to generate short term demand in a target market resulting in conversations between vendors and targeted buyers.

Okay, there are three things that lead generation needs to work and it doesn’t matter which channels you use to get in touch with the target;

1.     A tight, focused and very easy to understand proposition, which focuses on just one key business problem that your product fixes.

2.     Incredibly accurate target data that identifies the right individual in organisations that are the right profile for your product.

3.     A simple way of getting the message across  - at the very least a well written e-mail and a follow up call.

If you don’t have those three, then the chances of a lead generation programme working are at best slim. So rather than trying to cover them all in one blog entry, I’ll cover each one separately over the next couple of weeks and this week I’ll cover the proposition.

The challenge for most businesses lies in developing a very clear, tight and easy to understand proposition. In many ways this goes against just about every sales or marketing instinct or experience in a business, where the general belief is usually that putting more into the proposition will make it more attractive to more people and increase the chance of making a sale.

This may or may not be the case for the general market positioning, but in lead generation, the bigger, broader and more complex the proposition, the less effective the campaign is. This is an absolutely cardinal rule and I just cannot stress this enough.

The reason why this is important is that buyers are just not interested in being on the receiving end of lengthy, complex and often confusing pitches usually made by vendors. We know from our own research that more than 70 percent of decision makers just won’t respond to campaigns unless the message is extremely relevant, easy to understand and focused on a specific problem faced by the buyer’s organisation.

So assuming the buyers we talk to aren’t making it up that means the big, all encompassing message about the brilliance of your product, is actually in the way of a successful short term lead generation programme, because you are trying to get too much across in too little time.

There is another reason why simple, clear propositions work better. The chances are that the people you are getting to make the follow up calls are not experts in your product or target, so why would you expect them to be able to articulate a complex business proposition with either credibility or a full understanding of what it is they are talking about?

So at the heart of it, in order to generate those conversations that could turn into business you need a simple way of saying, “Hi, How are you, we do this, is it something you need?” That’s all there is to it, nothing else.

Next week I’ll cover targeting and why it is as important as the message, but in the meantime I hope this super high level view helps.

Targeting is more important than ever

One of the key issues that effects the success of all campaigns is the accuracy of the targeting. We’ve noticed recently that a lot our customers’ markets are becoming quite busy with new competitors many of which do not have a real fit for the markets. On examination it looks very much like companies that are trying to find new markets and new opportunities because their own markets have tightened up and there are fewer opportunities to pursue.

In our experience and I am sure many other marketers, while this appears to be a sensible strategy it is one that carries significant risk as a tactical response. You are unlikely to have as much credibility in the market as vendors that are already operating successfully and have built up a reputation, which means sales are likely to take longer to come in, will probably have to be won on price and so the list of risks goes on. (The only effective way to do this is by genuinely committing to the market, but that isn’t the purpose of this article.)

The market may well be tough, but we have yet to find a market that has completely stopped, but what is happening is over marketing and selling by vendors to getting through and getting your message is much harder.

The approach we’ve been taking in campaigns to help our customers get through and get noticed has a number of facets, but two absolutely vital ones are;

1.    The targeting of the right market

2.    The development of tightly focused and relevant campaign messages.

Now this might all sound obvious, but here’s the thing. We see a lot of companies sort of doing the basics, but still using big broad brush messages and in effect mass broadcasting.

To give you an example, out of all the campaigns we have been running in the last few months two stand out as good examples of two slightly different approaches to the targeting problem.

The first is our own lead generation campaign. One of our target markets is B2B companies of a particular profile of which there are about 4000 in the UK. If I followed the average company approach we’d mass market that group with a message set designed to ‘appeal’ to them all. The level of success, even if the campaign was really brilliant, we would still only get a return of about one or two percent. We would also alienate a fair chunk of the market with messages they didn’t feel were relevant or we frankly just ignored them. Instead our approach has been to break the market down into chunks of about 200 to 300 companies that are very similar and then we build very specific messages for that sub sector of the market. The result is a list to lead generation ratio of 8 percent for the first contact with the market and that includes targeted customers calling us before we have the chance to follow up.

The second example is a campaign we run for a customer that focuses on extremely small groups of customers. The last iteration of this campaign had a total target database of 65 companies. We built a very simple, extremely relevant, direct message set which when pushed out to the market resulted in two very good leads with another 4 that we are working on at the moment and we are pretty confident will come in. Again this is a first contact campaign.

So what’s the point of this article? Well put simply the better your targeting, the better the results you’ll have with your campaign even in the extremely difficult market conditions we are in at the moment. For us this means tightening down on the size of markets to deliver exceptionally relevant focused messages to exactly the right person in an organisation, all of which is exactly the opposite of what so many people out in the market at the moment are doing just now.

Good marketing is like Punk!

So what the dot, star, bleep, skull and cross bones does Punk rock have to do with modern B2B marketing? Well you’re going to have to go with me on this one, but think of it this way -

At the time punk arrived on the scene the dominant genres of music were disco and rock with a bit folk at the sides. If you turned on the radio you either got an ear full of disco beat or a wailing guitar solo. By the mid to late seventies it was all getting a bit samey and a lot of the music started to sound the same, the lyrics started to even sound very samey and if you listened to US soft rock you couldn’t tell one band from another if you tried. That’s what a lot of modern marketing is like and here are just a few examples;

·      Utility product or service providers (telecoms, IT support, electricity, etc) are all on the ‘we can do it cheaper bandwagon’ at the moment and it’s virtually impossible to tell one from the other.

·      Professional services firms are all claiming to have the best people and deliver the best service and as a result all look the same.

·      Product vendors are still pushing features as opposed to outcomes. For example why is a faster PC a better one if all most of us do is some word processing and web browsing?

So there are a lot of companies out there trying to get their ‘tunes’ noticed but they all sound the same and even if they dress themselves up in glitter and glam they still won’t really get noticed that much more because it’s just the same old same old dressed up pretty.

It’s time for a change if you’re really serious about getting noticed. It’s time for the marketing equivalent of punk.

Fundamentally the biggest problems faced by every vendor at the moment is a cautious market and too much competition  - take the public sector for example, we have seen numerous examples where literally hundreds of companies have competed for even quite small tenders whereas two years ago it would have been perhaps a couple of dozen. The private sector is just as bad with hundreds of vendors pushing their same old same old messages.

So just one question, if you look the same as everyone else and you say the same things as everyone else, how will you get noticed in your market and make sales in any volume?

Fun is more important than you think

Okay. If you've been looking at the new site for the marketing lab or reading any of the stuff we've been working on you'll know that words like 'play', 'fun' and 'exploration' have been increasingly important to the success of marketing and lead generation campaigns in the last few months. You won't be surprised that we aren't the only people thinking this way, though it has to be said that there are still too few of us. Have a look at the video below to see what I mean.

Fun in the workplace you cry. So here's a thought. When was the last time anyone tried to introduce you to a new idea in a way that you might enjoy? The chances are its never happened because in business to business, sales and marketing people are just too damn serious for their own good. This doesn't mean we needs lots of slapstick selling, (Interesting mental image though) but perhaps helping decision makers to step out of their day to day 'hard nosed business' person personas and see something with fresh eyes through fun, play or exploration might be a good idea.

Our results with campaigns of this nature are significantly better than more traditional campaigns and approaches and the stats are on show at www.marketinglaboratory.co.uk in the 'what works' section. We haven't finished developing the model and the processes yet so we expect better results yet as we hone it and as always we'll share the results and our experiences on the marketing lab site.

Engagement is Vital

Hi again

Shorter and focused this week on the importance of getting your audience to engage with you.

Engagement is Vital

http://www.markettransformations.com/what_we_do/engagement

Post web sales and marketing

Here is this week's blog. Doing a bit differently this week, so hope you enjoy it.

Pre-web sales and marketing

Pre-web sales and marketing

http://timsandford.vox.com/library/po...

Before the Internet was in common use, sales and marketing were predominantly push exercises with information being pushed out to the market using the traditional tools of; · Direct mail to send mail shots, brochures, offers and so forth. · Advertising and PR to generate awareness · Telemarketing...

Pre-web sales and marketing

Before the Internet was in common use, sales and marketing were predominantly push exercises with information being pushed out to the market using the traditional tools of;

• Direct mail to send mail shots, brochures, offers and so forth.

• Advertising and PR to generate awareness

• Telemarketing to create appointments and sales opportunities for sales people

Only very rarely were companies lucky enough to enjoy a good flow of inbound enquiries and leads that could keep their sales teams fully occupied. The rest of the time it was usually down to the sales people to go out there and build markets by knocking on doors.

This model was the accepted norm in most business to business sectors leading to the emergence of sales and marketing organisations and practices that were very much led by sales with marketing playing at best a supporting role.

Most of us who were in sales and marketing before the Internet remember the days of the Road Warrior, out there on his or her own roaming their sales territories and hunting down their next deal. For most organisations this was the only realistically cost effective model for sales, but it was still an expensive one. One national software vendor I worked with in the early nineties had a sales team of close to ten with a modern cost equivalent of better than half a million with a target of about £3 million revenue and £1.5 million gross margin. The sales team only ever achieved about 75 percent of target. Subtracting all the costs including marketing, overhead and so forth, the actual profit generated by sales each year was not much more than the modern equivalent of £150,000.

In defence of that particular company, sales and marketing worked that way in the days before the Internet the majority of cost was associated with the large sales teams, their company cars and so the list goes on, but it was the only way for most vendors to succeed.

For some companies this kind of model is still the most appropriate, but they tend to operate in a corporate marketplace selling very high value products and services to a very limited number of organisations. However for most companies, the market has changed and the post web model I’ll discuss next week is most appropriate.

My final point this week is that it wasn’t the web itself that changed the way sales and marketing works. It was the way the web enabled buyers to pull information anonymously before they even have to engage with a potential vendor, but more on that next week and the consequences for sales and marketing.