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.