Tuesday, August 7, 2007

Lead Qualification & Management

This has been a key topic for any company and sales person, to achieve the targets. This phase is where the sales cycle can be optimised and sales personnel can get closer to his targets in shorter time with good efforts & better time management. This article is something which sums these elements very well. I got this valuable article on web, published by Mr. Greg Wease and thought of sharing this for the use of fellowmates in sales.

Greg Wease is the VP, Business Development at emark Solutions, a tactical marketing support firm in Portland, Oregon. Wease's background includes several high-technology companies conducting sales training and market research programs


Is this your problem?

Your marketing department has launched an all-out assault to stimulate interest for its product from key market sectors, deploying the “usual suspects”----trade shows, print ads, direct mail programs, even webcasts. The campaign has spawned hundreds of inquiries, making it a hit.
Now, of course, the inquiries must be processed, and quickly, since your company’s competitors have stimulated these very same respondents. However, as fate would have it, the marketing people struggle to shoehorn the processing of these inquiries into their already chaotic schedule. Before you know it, three weeks pass since the inquiries came in—and they haven’t been touched.

Finally, dealing with the inquiries rises to the top of the priority list. By the time the most potent inquiries are extracted and handed off to the sales department, only a few of them pan out from the hundreds of inquiries initially generated. Meanwhile, the remaining inquiries now sit in limbo. But what if some of these dormant inquiries eventually could be converted to potential sales? Tragically, no one will ever know.

Inquiry processing may be every marketing department’s nemesis, but that doesn’t mean that all the inquiries generated by various stimuli still cannot be qualified completely and expediently so that the conversion rate to potential sales spikes higher.

Nevertheless, qualifying each inquiry takes time, patience and perseverance all in a short timeframe. So, a good question to ask yourself is whether this whole process is something you maintain in-house or outsource. There are arguments in favor of both options. Just which one is best for your organization depends on many factors.

Leads vs. Prospects

Before delving into the pros and cons of processing inquiries in-house or outsourcing this function, however, it’s probably best to clarify some key terminology. It’s so easy, but also dangerous, to use terms like leads, inquiries, prospects, and suspects interchangeably, as so many companies do. For this discussion, here’s the basic terminology at issue:

An inquiry is a person who shows casual interest in your product. He may want some information sent or e-mailed to him for further consideration, but he’s in no hurry. This person has not yet been contacted or qualified for sales.

A lead is a person who has been contacted and qualified, and shows more serious interest in the product. This person may even have some urgency in learning more about the product, and want both information and personal contact with the company.

A prospect is someone who has definite interest in buying a particular product within your company’s, “product category.” He has a clear need for the product, a timetable, and a budget. Yet, to convert this prospect into a customer will require diligent qualifying on the part of your company’s sales department.

When qualifying, it’s best to follow the A-B-C Prospect Rule:

The “A” Prospect—A prospect who is preparing to purchase a product, yet considering competitive bids. The chances for your product being chosen are very high.

The “B” Prospect—A prospect who is still searching for a solution. Your product has been considered, but the prospect is not quite ready to buy, or there may be budgetary constraints that push the purchase out a bit.

The “C” Prospect—This prospect is not ready to ready to buy, and, although your product has been considered, it is not high on the priority list. It may take months before a decision is made.

Tracking Leads

The process of qualifying legitimate prospects so that they can be converted to actual customers is typically a long one, particularly if the price of the product ranges from a few thousand dollars to tens of thousands.

To effectively qualify these prospects requires establishing an easily accessible and maintainable database. The idea here is to keep all inquiries in the database, yet to continually qualify them so that eventually each inquiry either becomes a hot prospect or is eliminated entirely.

Most marketing departments have limited standards for tracking inquiries, qualifying them, and generating data. One marketing department may use a different method for inquiry qualification compared with a marketing organization at another company.

The biggest problem, however, is that, in many instances, these departments fail at successful inquiry qualification because they don’t act fast enough on inquiries that they receive. They also view lead generation programs as single, discrete events, which means after all inquiries have been documented the vast majority of leads are discarded.

The marketing and sales groups have cherry-picked the best leads. Beyond this action, they simply don’t see inquiry qualification as an ongoing function that could yield additional sales opportunities down the road. This pattern must be reversed. Additional marketing support through lead follow-up programs such as telemarketing, e-mail and direct mail will keep leads warm.

In-house Processing

Since it is uncertain just which inquiries will convert to warm (“B” ) or hot (“A”) prospects, it becomes essential to process and qualify every inquiry received—immediately.
The most promising inquiries need to go over to the sales department, and once this happens it is their responsibility to make contacts with “hot prospects” who emerge from these inquiries while nurturing the remaining inquiries. This means that the remaining inquiries will require some kind of direct marketing outbound contact, such as e-mail, for example, which is inexpensive, and enables a company to efficiently maintain contact with every inquiry on the list.
It comes down to taking the investment that you have and getting some return out of it. Internal marketing professionals often do not view lead processing as their job. But truly it is. They need to look at all of the leads they receive as potential revenue for the company. Marketing organizations need to exercise “Just-In-Time” marketing—the practice of acting on inquiries as soon as they are delivered to the marketing department.

Lead Qualification Processes
If you’re planning on internally qualifying all of the inquiries that your marketing department generates, a specific protocol must be in place. Consider these components for an internal inquiry processing program:

A dedicated team of inquiry qualifiers. They will need a good knowledge of outbound marketing techniques such as telemarketing and e-mail and how to judge the value of information received for each contact they make. Once this tam is in place, they will review the “end of program” expectations—what the marketing or sales department expects when the inquiry qualification effort is complete.

Once this review has occurred, the inquiry qualifiers will need to set a timeline for the first round of inquiry qualification, which would also be applied to the ongoing inquiry qualification efforts. The first round might follow a trade show, conference or seminar, for example, involving 500 leads. Qualifying would place these inquiries into an appropriate inquiry “bin,” with Bin “A” being the most qualified and ready to purchase category, and Bin “E” representing a not interested status. One or two months after this round of qualification, a second round of qualifying would occur. This second round could include not only telemarketing, but may also use e-mail messaging to individuals to request further information from them.
The initial and main qualifying process tool will involve outbound telemarketing. This method can effectively allow the lead qualifier to obtain basic information from each contact (i.e., name, company, address, phone, e-mail), but also information based on weighted questions. Answers to these questions will give some insight regarding the quality of the inquiry. Telemarketing is also valuable for use with other marketing tools. For example, once an e-mail campaign to a batch of contacts in a database is completed, outbound telemarketing can be effective for further qualifying these contacts.

How many people would be needed to operate an in-house inquiry qualification program depends on the volume of leads that are generated. Whatever the volume is, these initial inquiries need to be prioritized and qualified in a relatively short period of time. Therefore, the staffing requirement will need to map back to the volume of leads.

Typically, a staff ranging between five and eight full-time telemarketing professionals per 1000 leads generated is a safe rule of thumb. Prospects gleaned through the inquiries need to be contacted and qualified within a two-week period upon the conclusion of any given marketing campaign.

The staffing, inquiry qualification rounds and timelines, and the marketing tools for nurturing inquiries received all are key elements for making a successful in-house program efficient and successful.

Outsourcing Lead Qualification

If you have just a few inquiries coming in each day, your marketing department probably can handle them just fine with the internal structure just discussed. But if you’re getting 1000 or more inquiries a month (some months more, others less), a full team of qualifiers will be essential.

At this point, an outside source probably could help process those inquiries. One benefit could be dramatically reduced cost by outsourcing the inquiry pre-qualification process as opposed to doing this in-house. The secondary benefit that comes out of this outsourced process is near-term sales opportunities that may not have been identified during the initial inquiry.
Through outsourcing, all leads can be thoroughly qualified, which will allow for identification of a need, timeframe for purchase, and budget, and possibly the prospect’s role in the decision-making process during the initial qualification phone call. Through outsourcing, leads can be acted upon immediately.

For example, when your marketing and sales people have just returned from a trade show, and have 1500 inquiries, the chances of calling any of them soon may be slim. With lead qualification, timing is everything. After all, inquiries that are more than three weeks old might as well be discarded. The prospects have forgotten about you and the product, and probably are in the process of looking at another competitor.

Coupled with an outsourced firm’s ability to swiftly contact new inquiries is the fact that inquiry qualification can be accomplished without ever adding to your staff or incurring excess overhead. Outsourced lead qualification can be turned on and off easily and quickly for short-lived marketing activities, yet provide the full attention each inquiry deserves.

Outsourcing inquiry qualification gives a marketing organization stronger accountability. Based on the bin process, a company’s management can see which inquiries represent the A prospects. Lead nurturing as handled in an outsourced environment can be part of a fairly simple program that may occur only on a quarterly basis. All of the data from the nurturing effort is sent back to the client, and then it is filtered down to sales representatives and managers.

On the other end of the spectrum, lead nurturing can be a complex program in which the outsourcing firm would have access to a client’s sales organization routing table. In this application, an inquiry would be given to specific individuals so that the sales management would have visibility of which sales people received certain inquiries. Once this is accomplished, it is up to the company’s management to follow up with the sales organization to ascertain the ongoing status of all inquiries received.

In-house or Outsource?

What criteria should you use to justify outsourcing inquiry qualification?

  • Does your marketing organization have the resources to meet all of the requirements for an inquiry qualification effort?
  • Will these requirements map back to the timeline in which the inquiries need to be qualified?
  • Are there qualified representatives in place to make outbound phone calls to your inquiries?
  • Does it make economic sense to use the resources of a high-end sales professional to make a lower-end, entry-level sales call?
  • You may want to consider outsourcing just a piece of the lead qualification effort. This might mean outsourcing the first round of telemarketing. Once this is completed, your internal marketing organization could continue the nurturing effort (i.e., moving contacts from Bin “B” to “A” or from Bin “C to “B”).
  • Conclusion

    The test of a good inquiry qualification program stems initially from how quickly inquiries are processed so that near-term sales opportunities can be identified. To make this happen, however, requires a commitment—of the best resources and people available, and to a strict protocol and timetable. Launching a finely tuned inquiry qualification program is manageable in-house, yet it depends on the volume of leads a marketing organization receives and its preparedness to deal with them in a timely fashion.

    Given the quick ramp-up required for the multitude of marketing activities most companies handle each year, outsourcing the lead qualifying effort—or a part of it-- might be a more practical, time-efficient and cost-effective alternative at various intervals.
    To know for sure, apply the criteria offered earlier in this discussion. It could mean the difference between potential sales captured or that were never visible in the beginning.

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