Making the Case for Teleprospecting

At SiriusDecisions Summit 2012, we revealed our updated demand waterfall, and in the process clarified the important role the teleprospecting function plays in demand creation. Many organizations, however, are just beginning to make the case for incorporating a teleprospecting team (internal or outsourced) into their demand creation efforts.

Here are a few strategies for making that case, both qualitative and quantitative:

  • Identify lead coverage gaps. Research shows that it takes 8 to 12 attempts to reach a decisionmaker by phone, even when they’re interested in your products or solutions. Do your sales reps have the discipline to devote that much effort to anything other than a current-month or current-quarter close? Not likely, nor should they be. People are busy, not waiting by the phone for your call. You could wait for them to call you, but at what risk? How many will engage with a competitor while you await their call? Let reps close business, and look to teleprospecting to qualify leads. A time study on the prospecting activity of your quota-bearing reps will likely reveal that the activity level does not provide sufficient coverage for the leads generated, and that rep activity skews toward target-account and referral-based prospecting (vs. calling on marketing program responses and inbound inquiries). Sales reps are often not able to invest the cycles required to effectively convert marketing-generated leads into real opportunities. That’s a function better served by teleprospecting.
  •  Reverse the waterfall to quantify coverage gap impact. A lot of companies divide their marketing contribution objective by average deal size to determine the number of wins needed to hit the goal, and then apply stage conversion rates to reverse the waterfall to determine how many sales qualified leads, sales accepted leads, marketing qualified leads (MQLs) and inquiries will be needed to make the model work. However, what gets lost in this analysis is the number of human touches, via phone and email, required to qualify those inquiries to MQLs. Most organizations report a 10 to 15 percent connection rate on their calls and emails, meaning 85 percent or more of dials and emails go unanswered, lost in email and voicemail boxes. The average organization converts 4.4 percent of inquiries to MQLs. But how many dials and rep emails does that typically entail? Are these the leads that convert after one or two touches? If the ratio of activities to inquiries is less than 8:1, you are likely missing out on viable opportunities. Will more leads convert if a more robust coverage model were in place? By looking at the gap between average number of touches per inquiry and call/email connection rate, you can apply stage conversion rates to model a “what if” scenario tied to a better coverage model (staffed by teleprospectors).
  • Model the opportunity cost by looking at leakage from the demand waterfall. As part of that conversation, identify process holes that exist today. For example, what happens when opportunities stall out, perhaps because the prospect loses funding for a project? Is there a structured process to recycle those opportunities to reactivate demand? With a teleprospecting team, there could be. What about deals that were lost to “no decision,” which is often one of the most common reasons why opportunities are closed. Research shows that many of those prospective buyers select a solution within 24 months. What percentage of closed deals were eventually reactivated into new opportunities that were then won? Like many companies, if you are unable to answer these questions, make an assumption on how much demand you could reactivate through teleprospecting-supported nurture and recycle programs. Apply standard conversion rates to then determine impact on pipeline.

These are not the only ways to justify a teleprospecting investment. However, if you do your homework and model against your organization’s adaptation of the SiriusDecisions demand waterfall, you’re much more likely to succeed than with a purely qualitative business case. Here’s a final tip: Look at your competitors’ recently announced wins, and use that information to audit your leads and pipeline for missed opportunities. Chances are you will find evidence of at least three to four leads that were missed, or opportunities that could have been recycled, and were not. That type of intelligence adds a lot of weight to the quantitative part of your business justification.

About the Author

Jason Hekl is Service Director, Demand Creation Strategies, at SiriusDecisions. With an emphasis on developing and executing demand generation strategies to accelerate growth, Jason has sourced, developed and closed millions of dollars in new business throughout his 19-year career. Follow Jason on Twitter @the_hekler


8 Comments

  • Bill Freedman, 15th June 2012 at 12:01 pm

    Reply

    You wrote: “Research shows that it takes 8 to 12 attempts to reach a decisionmaker by phone, even when they’re interested in your products or solutions.”

    Can you point me to the research study? I believe that multiple touches are needed to connect and close deals, the big questions, especially with deployment of teleprospecting, revolves around what teleprospecting is trying to accomplish and which tactics are used. Should those 8 to 12 attempts be phone calls to the same person or multiple offers to multiple people across the organization? Should calls be highly concentrated over 1-2 weeks? How important is the “offer” by the teleprospecter vs “persistance?”
    I doubt that one size fits all. I also believe that in the Internet era, the wise sales organization understands that creating urgency and credibility has gotten a bit harder. Having more: more individual prospects, more content, more patience need to be part of an evolving sales strategy.

  • Jason Hekl, 15th June 2012 at 2:21 pm

    Reply

    Thanks for your comment, Bill. Sirius’s own research (published in the brief Setting The Performance Bar for Teleprospecting) shows that roughly 12% of prospecting calls reach someone willing to engage. I’ve seen other studies peg the number as low as 4% (presumably for cold-calling executives), so there is certainly a lot of variability. The key point, though, is that it will likely take many touch attempts to engage a targeted prospect in an initial conversation. Establish that baseline conversation rate, and then work toward improving it by tighter targeting on who to call, mixing up your touch strategy, developing more compelling offers, coaching the reps on phone selling techniques, etc. You are completely right in that no one size will fit every situation, and that sales organizations must evolve their calling strategy beyond ‘pounding the phones.’

  • Michael A Brown, 15th June 2012 at 6:10 pm

    Reply

    Hi Jason! You make a solid case for the wise, integrated use of the phone in the customer acquisition sequence. Indeed, for cosnidered decisions in BtoB, phone remains vital! Sooner or later, we still have to talk person-to-person to influence, advance, and sell. Conversations trump tweets every time.

    Precisely because phone remains integral and important, I urge you and Sirius to dispense with the demeaning term “teleprospecting.” What you describe in your commentary, and what I endorse, is way beyond such. It is demand generation, or business development, or opportunity idetification and qualification. Indeed, I was with Atlanta clients last week who are about to change their callers’ title to Sales Development Representative.

    Bill Shakespeare may have wondered about “What’s in a name?” But I assure you that the name of the function directly affects its standing with prospects and within their own organization. When companies upgrade “teleprospecting” to a more professional and meaningful moniker, they will like what happens.

    Cheers!

  • Jason Hekl, 15th June 2012 at 6:50 pm

    Reply

    Thanks for your comment, Michael! Like you, SiriusDecisions holds the teleprospecting / demand generation function in very high regard. The rearchitected demand waterfall introduced at the SiriusDecisions Summit this year reinforces the critical role that lead development reps play in the demand creation process. To your point, though, we recently published a SiriusDecisions B-to-B Role Profile with a job description and competency profile for professionals in that role, and use the term Lead Development Representative (though we also recognize that Business Development Representative is another common title for the role).

  • Larry Fleischman, 16th June 2012 at 12:04 am

    Reply

    Insightful post and comments. Between the blog, conversations at the Summit about the value of the teleprospecting function (ahem, the “lead development function”), and the emphasis in the new waterfall on the role and value of teleprospecting in the demand creation process, Sirius has enriched a dialogue – much-needed and overdue. Using the teleprospecting function to close lead coverage gaps, minimize leakage, re-focus sales reps’ valuable time on closing, and staying in contact with recycled leads are logical strategic practices, as is reversing the waterfall to establish baselines for activity volume, not to mention contact data volume requirements. These are disciplines we recommend to clients and adhere to in our own programs with successful results. I’ll add to this conversation the need for organizations to better understand how and when to engineer the tele function into their marketing automation-powered programs. As we all should know by now, automation can assist and enable an ongoing customer and prospect touch process, but is sub-optimized without embedding well-timed human touch into the flow to fully qualify and validate leads, and when necessary to correct how these leads are being handled. Automation while valuable can only take a lead so far; human touch fills the gaps and takes it the rest of the way home. Sirius did a nice job of positioning the teleprospecting role in the new waterfall as part of the Automation Qualified Lead process, where the function is used to accept and qualify these leads. It is good to see that the value of human touch in demand creation is now being quantified and acknowledged.

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  • Chris Beall, 18th June 2012 at 3:04 pm

    Reply

    Our numbers, gathered over some millions of call attempts per year, are more like 22:1 attempts:connects for director-level decision makers, moving to above 40:1 for C-level. We don’t notice the ratios changing depending on whether someone has been spoken with before or not, nor on whether it is a cold call or an inquiry response. This seems to indicate that, as you write “People are busy, They aren’t waiting for your call.” – and little else – is the root cause.

    We do find, however, that positive outcomes are correlated with whether there have been any previous conversations, however brief or long ago, with the prospect. Putting these numbers together leads me to think that we don’t really have coverage at, say, the 50% level until there have been a couple of conversations, each of which takes an average of 22 attempts – effectively a 44:1 call attempt:inquiry ratio. Which seems kind of daunting, but unavoidable, given that, as Larry Fleischman notes, well-timed human touch is needed for validation, qualification and quality feedback.


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