November 1999

Human Resource Development Building Prospect Relationships For Business-To-Business Sales

BY CHRISTOPHER RYAN, SALIGENT SOFTWARE, INC.

Despite the masses of publicity about the Internet, the telephone is still the best way to build long-lasting relationships with large numbers of prospects and customers. This is especially true for marketers of business-to-business products who face a plethora of challenges. These challenges start with products that often require high levels of sales involvement. Combine this with the involvement of multiple decision makers whose needs must be addressed to close the sale. Stir in the unprecedented acceleration in product and technology introductions. The end result is a constant remix of marketing and sales strategies to retain contact with prospects through the entire sales process— the first inquiry to closing.

Our jobs were easier when it was clear where marketing ended and sales began. Marketing created demand in the form of inquiries, and sales followed up to generate revenue. It isn't as cut and dried now. Field salespeople are increasingly specialized and often hold technical degrees. They are also highly compensated. Companies are questioning the wisdom of applying this expensive resource to the task of qualifying raw leads, much less cold-calling for new prospects. Smart organizations now ask their marketing departments to interact with prospects in early sales cycle stages and cultivate prospects until they are qualified and ready to engage with field sales personnel.

Lead Incubation: Using The Telephone To Develop Prospects
All sales leads, regardless of origin — ads, public relations, trade shows, direct marketing and the Internet — should be prequalified and screened before they are sent to the sales force. Some of this prescreening can be accomplished through online methods, such as allowing prospects to self-qualify on Web response forms. The bulk of screening and prequalification, however, should still be done by telephone.

This proactive model differs from other response management models. Prospects receive product information only after qualification and only in response to their stated needs and interest levels. Only “hot leads” (as defined by the sales force) are distributed. “Warm leads” are cultivated from the inside through systematic communications. This allows marketing to cultivate longer-term opportunities without diverting field sales from its revenue goals. Then, inside telemarketing or telesales personnel are in a position to contribute more value to the entire sales process. By applying trained telephone staff and database marketing strategies, you can double or triple the number of highly qualified leads sent to the field at a fraction of the cost of generating more new inquiries. Marketing then shares credit with field sales for increased revenue and productivity.

A key component of the prospect development strategy is training your telephone personnel to target their dialog appropriately. Just as there is a natural evolution in human relationships, there is a natural evolution of prospects through the sales cycle. Most companies fail to recognize this and take liberties with the prospect before he or she is ready. Your results will improve if you apply the right conversation at the right time. Of course, you must have a good database system to accomplish this, since several people at your organization may talk to the prospect before a sale is completed, and all of them must know everything occurring previously. A good automated marketing system remembers all interactions and even suggests how to converse with each prospect based on past history.

It is misleading to think of this as a simple process of grouping people into segments such as inquirers, suspects, prospects and customers. In the business-to-business world, a particular organization may be a customer, but you may be contacting unfamiliar prospects at that company. Treating those people as customers would be presumptuous and counterproductive.

The Three Cycles Of Telephone Lead Incubation
The following example shows one model of the telephone prospect development process. It is particularly effective with companies selling business-to-business or “big-ticket” products and services.

Cycle 1. All sales leads generated from marketing and sales programs funnel through a first-level qualification process. At this level, you collect pertinent prospect data including contact information (name, title, company, address, phone, fax and e-mail), pros-pect demographics (industry, company size, number of sites and annual revenue) and gross qualification information (application, budget, position in the product development cycle, purchasing time frame and desire to meet with a company representative). Immediately forward sales-ready leads to the appropriate salesperson. Retain prospects who have shown some level of interest but are not sales-ready for incubation through Cycles 2 and 3. Then disqualify the balance of sales leads with no current value (up to 50 percent, on average).

Cycle 2. After a discrete time interval (determined by the prospect’s product and time requirements captured in Cycle 1), prospects are ready for another contact. You can then re-market to them by direct mail, telemarketing, e-mail or fax, appropriate to their needs. The goal of Cycle 2 marketing efforts is to extend the one-to-one relationship with your prospects. Typically, you would take a customer service approach by verifying information captured in Cycle 1 and gathering additional qualification data as appropriate. The data collected in Cycle 2 should include additional product requirements and opportunities, as well as names of other key decision makers. Again, sales-ready prospects are passed on to field sales and those prospects with continuing interest are retained for incubation through Cycle 3.

Cycle 3. During this stage, the key objective is to advance the sales opportunity. In addition to updating and gathering information on the prospect, you may want your agents to gently persuade viable prospects to take the next step: accepting a call from your field sales rep. If this isn’t appropriate or acceptable, you then decide whether this prospect should receive another cycle of incubation. For every company, there is a point of diminishing return at which further contact with prospects will cost more than it is worth in increased sales.

Note that one of the most important things telephone account reps can accomplish during calls at all three cycles is site mapping. Site mapping is the process of collecting information about the prospect’s enterprise that will help in later stages of incubation and in the field sales process. Well-trained reps can discover data such as key players in the prospect company, final decision makers, budgets, internal buying processes, crucial buying requirements, status of incumbent suppliers, etc. These incremental prospect data captured in the incubation process are a unique source of marketing and sales intelligence to support key business decisions throughout your company: product development, strategic and corporate marketing, customer service and sales. Proper use of these data by field sales can cause closing percentages to go up by 50 percent or more.

A different type of individual is needed to effectively handle telephone prospect development. Part salesperson and part detective, these people are highly trained, highly motivated and compensated above and beyond industry norms. They are worth every penny because adding them to the process makes the more expensive field sales resource much more productive. Your sales force will be able to focus its energies and talents on closing sales, which means motivation and productivity will increase. By actively engaging your prospects in an ongoing dialog, they become more knowledgeable about your products and services and enhance your “mindshare” at sales decision time.

How Your Systems Should Support These Practices
If marketers need a service that focuses on customer retention, loyalty and lifetime value, how do they go about capturing information and understanding their customers and prospects? The first step in creating a prospect development model is a relational database linked to other information resources that allow marketing and sales to increase revenue while decreasing the cost of sales. With this database, you can employ the cycles of incubation and relationship marketing to understand prospects and customers and respond to their individual needs and requirements.

As stated earlier, the telephone is one of the best sources to communicate one-to-one with customers and prospects and cultivate these personalized relationships. But the telephone is only one medium with which to communicate and interact with customers. As these relationships develop, you need to employ your customized database to initiate and track different types of interaction (telemarketing, direct mail, e-mail, fax, etc.) and offer individualized response. You also need the ability to segment your key customers and provide them with the special handling they deserve.

To accomplish all this, it takes much more than a traditional database marketing system. A new class of software called marketing automation supports your high-touch prospect development and customer relationship marketing. From any location accessible to a Web browser, you can launch and manage marketing campaigns, model and estimate projects, view real-time results, communicate with fellow employees and vendors and monitor return on your investment. As prospect and customer bases grow ever larger, effective management of these becomes crucial to the ongoing business of each organization. Using the right tools to automate customer interactions while continuing to keep them personal makes both the marketing and sales departments more efficient, manageable and measurable.

Christopher Ryan is president of Saligent Software, Inc.  a marketing automation solutions provider based in Colorado Springs, Colorado. His career includes 20 years of experience in technology and marketing. Chris has authored three books on marketing and is a frequent speaker at industry conferences.