04 September 2019
Build a well-oiled, mean, lean, lead-generating and order-taking machine. A pragmatic real world approach to digital lead generation.
The bewildering choice and complexity of online marketing systems can leave you feeling like everyone has brilliant digital lead generation systems - except you.
Don't despair, very few companies have perfected digital lead generation. Here's how to get something workable up and running fast, suitable for business to business products and services.
The problem defined
A surprising number of businesses have poor lead capturing and tracking systems; despite the huge amount of information available, and the number of vendors pushing CRM and marketing automation solutions.
Many SME's can't accurately produce basic data that answers these important questions...
1. Where do your sales leads come from?
2. What is your sales conversion rate?
3. What return on investment are you achieving on your promotional spend?
Most executives will provide an answer to these questions but when you dig further, you find their answers are based on 'gut feel' and anecdotal feedback from the sales team. The simple truth is - they don't know.
The broken sales funnel
We discover this when we are employed as a digital marketing agency to "make the phone ring" and find the leads are going somewhere but the organisation can't provide a list, can't say for sure they were generated by the digital marketing campaign, and finally can't answer the question...
"...are we getting more enquiry than normal?"
In short, they aren't ready for the catch.
Many leads aren't followed-up
Another common finding is that many leads don't get followed-up.
We make the phone ring, someone takes their details down but there is no system that ensures the sales lead is managed through to the end.
Many readers will find this unbelievable, but it's logical. When questioned about lead handling, most executives or business owners will report they have it under control (and it's assumed they know this because they have a robust system in place) mostly, they assume their people wouldn't be so negligent to not follow-up every lead.
However, Unless they have...
- A well managed CRM
- Dedicated customer service/inside sales people
- A person monitoring and supervising the process
- Can produce lead tracking statistics
...then they have no evidence to support this belief and its almost guaranteed leads are slipping through the cracks.
Why do we say "this is logical?"; because, it's human nature.
High wage rates guarantee businesses do not have spare capacity. When faced with the choice between performing a task that will be noticed if it isn't completed and one that won't - the employee's choice is simple.
It's just too easy for that post-it note to disappear (after being found months later, stuck to the back of desk-trash).
For sure, when you ask the employees, how well are they attending to leads? - they'll paint a glowing picture. Logical.
Just for completeness, we also work with organisations who are really good at this; and they are growing.
Where digital lead generation meets inside sales
In B2b selling, the sales funnel doesn't stop after it leaves the digital world - it extends deep inside the organisation to where the real sales work is done.
A quick trawl of the internet will reveal a lot of information about how to measure the ROI on lead gen campaigns and provide the tools to help you to achieve this. There is only one problem. They are all built on the assumption that at the end of the sales funnel is an e-commerce process (a shopping cart) that can instantly capture a sales event (a dollar amount) which can be fed back into the lead generation platform or analytics tool.
These systems work brilliantly, but particularly in B2B sales, except for online transaction sales (ordering parts, components, and equipment)...
generating the lead is only the beginning; a lot of work is required to kick the sale over the line and may not happen for days, weeks, or months.
A quick note about quality of leads.
It's a fact of life, when you start promotional activity to generate leads, along with the worthwhile leads you will also receive a fair number of nutters.
Customer service people tend to exaggerate the number of whacker enquiries received. Lead tracking systems that accurately record data and produce reliable statistics will put this into perspective.
Sometimes you need to sift through a lot of dirt to find the gold.
The importance of the CRM
The tool for linking the online world with the real world is the CRM. The CRM is the point where sales lead information is captured and input in to a database for later information retrieval and action. But first, you need a CRM.
There are many vague and rather unhelpful definitions of what a CRM is...
"Customer relationship management (CRM) is an approach to manage a company's interaction with current and potential customers. It uses data analysis about customers' history with a company to improve business relationships with customers, specifically focusing on customer retention and ultimately driving sales growth."
That's a rather impressive way of describing a management discipline, when most of us think a CRM is a database for recording sales lead and customer contact information (which might be simplifying and underselling the utility of a CRM - but it's a good starting point). See what is a CRM?
Thing is, CRM's often come with many bells and whistles, and the global leader in CRM systems is Salesforce.com which began as an online lead tracking database system and has grown into a fully configurable development platform with many options and add-ons and a whole consulting and integration eco-system.
Because the CRM is built on a database, means a lot of information can be stored along with the basic contact details which will provide both the means to stay in contact with the sales contacts stored in it and ultimately perform some analysis (even if very basic) that can provide insights into where leads are being generated from.
The CRM therefore is the central piece of an integrated lead tracking system.
What information should be stored?
The simplest of CRM's should record identification and contact data - who are they? Where do they work? Where are they located? Phone numbers and email addresses.
Recording touch points
A contact database becomes a basic CRM when it has the facility to record a summary of the organisation's conversations and other interactions with the contact. Particularly when multiple sales people and customer service representatives are handling large numbers of contacts, being able to scroll back through past contact notes (a call history) can provide important information and improve the chances of customers feeling valued.
Some CRM's have the ability to add information after each call to indicate if the call was a positive, neutral or negative interaction. Statistical analysis of this information can reveal profound insights and reveal stunning findings when cross referenced with other data (e.g. customer service agent, postcode, product sales, age of customer, length of time on call, socioeconomic group, phase of the moon - the list is endless).
The ability to categorise
Being able to add Tags to each contact record enables sorting into useful categories. At the very least, you should be able to separate new enquiries from existing customers. Tagging allows assigning leads to a sales person for follow-up, categorising the lead according to source, product group, affiliations etc. A good CRM will have the ability to create unlimited categories and provide a tool to produce filtered lists and reports based on Tags.
Categorising enables the sales pipeline
The ability to tag contacts on the CRM is the key enabler to developing a sales pipeline. A sales pipline categorises each lead (or single sales opportunity) into consecutive categories each representing a milestone on the journey from lead to sale.
Every organisation categorises the milestones (or gates) differently, but here is a typical pipeline...
Enquiry --> Qualified Lead --> Identified Project --> Bid Requested --> Bid Submitted --> Outcome
Many CRM's have fully configurable pipeline systems (you can define how many stages and give each a custom label), and provide reports to tell you not only how many sales opportunities are sitting at each stage, but also Estimated-Value and a Go-Get rate. Aggregating this data arithmetically, provides a forward estimate of future revenue and is often used for resource planning (for example, manufacturing forecasts and even cash-flow).
Recording "where did this contact come from?"
At the heart of lead tracking is being able to analyse contacts by their source.
And finally, being able to analyse what is generating contacts then begs the question "what are they worth?"
It's not just their first order that needs to be measured but their future value.
Integration with financial systems
Sophisticated CRM's can integrate with finance software (ERP etc.) allowing sales people to view the sales order history of customers and their value. Some can even call-up product lists, add prices, generate quotes, and process sales orders.
A fully featured, capable CRM therefore is the foundation of online lead generation and acts as the interface between the digital sales funnel and the traditional in-house sales funnel
Collecting the tracking data
Given the CRM's ability to store data, the opportunity to collect source-of-lead information (tracking data) should not be squandered.
A powerful CRM system will enable you to generate reports that identify where leads are coming from, and in a fully integrated marketing system, will also tell you what it cost to generate each lead and how much profit/revenue each lead generated.
Don't feel anxious if your company is light years from having this capability...
Very few companies have this reporting capability, and the few that do are usually kidding themselves that it is accurate. Still, it's worth aspiring to.
There are several ways to obtain tracking data...
Somehow, the source-of-lead information is injected automatically into the CRM obviating the need for the customer service representative to do this. This is the most accurate source-of-lead system.
The customer service person is fed the lead-source data by some means, and they manually enter it into the system. This is less perfect, but at least the source of lead is definitive.
The ask-the-question method
The worst option is to train the customer service person to ask the question "how did you hear about us?" - customers will often provide a generic response "I found you on the internet" (which is the modern day equivalent of "I looked you up in the Yellow Pages") - the lack of reliability comes from both sides. The customer service person will often skip this step, feeling they've taken-up enough of the caller's time, or be anxious to answer the next call. Similarly, the caller will tend to provide the easiest credible answer for expediency.
However, it's better than nothing. And thus shouldn't be disregarded.
The ROI illusion
The weakness of all these approaches is that it fails to take into account the complex synergistic interaction of all sales and marketing activity and that most nebulous (but important) of marketing concepts - brand equity.
Even if the lead-tracking information is fully accurate, it will only report on the most recent promotional technique that generated the phone call. This is still important, and must be done, but it isn't the full picture and therefore can lead to poor decisions.
Sales tracking funnels that report on the lead generation journey and techniques such as lead attribution attempt to gain more insight in to the online journey - however, it's only capable of reporting online interactions and says nothing about offline techniques (trade shows, past sales visits, traditional advertising, signage, sponsorship, word of mouth, site signage etc. the list is endless). The danger is, brand building is totally disregarded by bean counters obsessed with ROI concepts and valuable promotional techniques are cut from the budget because the effect can't be measured.
In simple terms, it works like this. I search for a product online and a bunch of ads pop-up. Three brands I've never heard of and one that (I can't remember from where) but it sounds familiar - which one am I likely to click?
There is also the danger that online lead generation platforms collect and store huge amounts of statistics and generate lovely reports. But, just because they look impressive, doesn't mean they are providing a true picture. A deep understanding of the tools is required before meaningful conclusions can be drawn.
No officer, I wasn't speeding - I was only doing 2,800 RPM.
Also, just because it can't be measured doesn't mean it isn't working.
Applying ROI as a concept to marketing is also illusory because it's difficult (but not impossible) to truly identify both the full costs and the full financial outcomes of each marketing activity.
Some marketing activities require a lot of work to set-up and run, even if they don't cost much in terms of direct expense.
To measure the ROI on attending a trade show where the company hires booth space and has numerous company sales people and executives attending (often interstate or overseas) for several days must take into account not just display materials, booth space costs, freight, travel and accommodation but also the payroll expense of each person attending.
Then, how do you quantify the return?
Often the best that can be achieved is a measure of non-revenue results rather than using the accounting term ROI.
Sounds hard doesn't it? So what do you do?
You do what all businesses do and make pragmatic judgment calls.
- Aspire for perfection, but don't give-up just because it can't be achieved.
- Tolerate imperfection, while implementing continuous improvement
- Start with the basics, and as you learn how to drive it, add the bells and whistles later
- Focus on what will deliver the most result first
- Don't kid yourself the numbers (if you have numbers) are always correct
Here's where the practical real world advice kicks in.
Measuring lead volume
While the online world is mostly obsessed with measuring ROI, actually there is a much simpler and easier measurement - lead volume.
How many new leads are you capturing in any given time span?
Plot this information on a graph and apply some form of curve smoothing to take the distracting zig-zags out so you can more easily discern the trend.
If you see the lead volume increasing and it coincides with marketing activity, it's reasonable to assume it's doing something. Be careful though, some marketing activity is inherently slow to take effect. While not as pin-point accurate as digital campaign analytics, it will detect the effect of all your marketing activity - not just the digital campaigns.
Combine this with the blunt "how did you hear about us" instrument, and you have the beginnings of a lead measurement system that with a bit of common sense will guide you where you should be spending your promotional dollars.
While not as gee-whizz as the digital analytics of the full-stack digital marketing system, you can set it up in a day for little cost.
Business owners can feel the pulse of their business simply by listening to the phone ringing.
How many inbound calls you are receiving is a forward-indicator for sales over the next few months (depending on your average sales cycle). Inbound calls are either existing customers calling, new leads or a call centre in the Philippines trying to sell you printer cartridges.
However, less calls will mean less business activity.
With modern phone systems, the number of inbound calls you receive is reported on your phone bill. Capture this data and graph it. Overlay your monthly sales on the same graph and you will see a correlation. Interestingly, a peak in call volumes (say) three months before a peak in invoiced sales will give you a rough measure for your average sales cycle - sales lead to invoice.
Integrating digital sales funnels with in-house sales processes
The following diagram depicts the key components of the digital lead generation system and how it meshes with the in-house (traditional) sales funnel.
Key features about the above schematic...
- It's divided toward the bottom by a horizontal dotted line. Above the line are the components mainly relating to the online lead generation and 'run-rate' sales.
- Below the dotted line is devoted to 'high-touch' sales; sales that aren't closed in one or two calls but require dedicated attention by a sales person (or a sales team).
- There is a connection between top (run-rate) and bottom (high-touch) indicating the leads that are generated (mostly through digital marketing) that are passed through to the sales team by customer service (sometimes called 'inside sales') after being qualified as requiring more than just taking an order or providing a routine quote.
The schematic is also divided into three vertical sections...
- New customer acquisition and lead generation: as indicated by the orange boxes. These are the commonly used methods for generating leads using digital platforms. There are the usual digital methods (Search Engine Marketing, Paid Search, Electronic Direct Mail, Social Media) but the sales team are also included as traditionally sales people are responsible for finding new customers through various prospecting methods. Digital marketing promises so much that sometimes sales people forget their traditional role (or don't have time for it). This is another blog article topic, consider the possibility the customer you find may be a different type of customer than the one that finds you.
- Off-line contact acquisition: On the right hand side of the schematic (feeding into the green CRM box) is an arrow labelled 'Offline contact acquisition'. It's an acknowledgment that leads don't just come from digital lead generation. As I am writing this, I am thinking "that line really should feed into the website from the left," never mind , fix that later (pragmatic excellence).
A lot of leads come from sources other than digital marketing. If your sales team are half-good, they'll be networking and handing out business cards. A business card is a road map pointing to your website (you do have your website on your business card, don't you?), and referrals come from personal contacts, clients, suppliers, and other businesses in your network. And lets not forget the full list of off-line marketing and lead generation activity (trade shows etc.)
- Convert leads to sales enquiries: the purpose of the website and customer service team (indicated in blue) are to convert the generated leads to enquiries.
- Convert enquiry to sales and build the database: on the right is where the orders pop-out. Obviously, not everyone orders on first enquiry, however having gone to the trouble of generating the lead, it makes sense to keep the lead on file and keep in contact to encourage them to buy (lead nurturing and sales follow-up). Lead nurturing begins before they make contact. Digital marketing systems, can keep feeding advertisements and social posts to them even before they make contact (re-marketing).
- The CRM: the critical component in the whole schematic and the glue that holds the whole scheme together is the CRM (indicated in green). The CRM can be thought of as a 'tank' that stores sales prospects and customer details. The more in the tank, the more powerful the system becomes. The CRM is the goldmine.
This point cannot be over emphasised. The main error many sales organisations make is failing to stir the tank. If you only focus attention on the most recent enquiries and forget about the older enquiries, the leads go stale.
Going 'stale' means; the lead loses interest, the lead buys somewhere else (your competitor is more diligent), or the contact details change. CRM maintenance is a critical part of managing the CRM. Remember, like all computer systems they are only as good as the humans who fed the data into it.
Run rate sales and high touch sales
As stated earlier, the schematic is divided into two sections ('run rate' sales and 'high touch' sales).
Selling widgets off the shelf is different to long sales cycle project bidding
Not every B2B business has both. Large engineering firms work on million/billion dollar projects (several overlapping) and therefore have no need for the parts depicted in the above schematic that address high-volume-low-value transaction sales (often called 'run-rate' sales). And of course, some businesses are purely run-rate based and have no need for solution selling sales people.
The sales model for the large project focused business is very different to the transaction sales business (and less reliant on a continuous flow of sales leads), project tracking becomes a critical pre-sales tool for these types of businesses.
The point I am making is the above schematic is generic (albeit suited to business-to-business selling) but needs adjusting for specific businesses.
The website deserves special attention.
Over the last 35 years (the span of my working career), I have seen websites go from something only propeller-heads knew anything about to mainstream.
The first web page went live on August 6, 1991 and was accessible to only a small audience of academics. In 1991, I was the National Sales and Marketing Manager of an industrial mining services company. I was 30 years of age, my office desk didn't have a PC sitting on it. There was no email. I have witnessed the entire introduction of the digital marketing world and seen the launch of each new digital tool.
Only over the last 10 years have industrial organisations started to really worry about the quality of their website design and started to think about websites as a critical part of their marketing.
We used to split websites into two categories "brochure-ware" and "e-commerce enabled." Websites now perform more functions than simply being online corporate profiles and are often the first step in sales automation being able to collect and disseminate data as well as transacting sales.
In the context of this article (and as depicted in the above schematic) the website is the second stage of the lead generating process and can perform much of the pre-sales activity sales people used to perform...
- Providing specifications and data sheets: a common feature on technical product websites are extensive catalogues of product brochures and technical data sheets. The modern sales organsiation needs to cater for two-types of buyers; those who prefer to do their own research (tend to be younger) and those who would rather telephone and consult a real human (tend to be older). The website operates 24 X 7, meaning your potential client can be working late at night and still get the information they need, resulting in your product being specified in their design. Make no mistake, getting product data and technical specifications on to the website and keeping them updated is a massive task.
- Pricing: Many sites are able to provide pricing. This is a vexed question many businesses spend a lot of time considering - "should we list our prices?" there are advantages and disadvantages and the decision is driven by your business model and selling model.
- Custom ordering portal: This is a good example of where the sales team mesh with the digital sales model. Many customers are seeking a more efficient process to manage vendor relationships particularly focusing on 'rats-and-mice' purchases (office supplies, safety equipment and consumables (PPE) ) and negotiate a volume buy for all their branches (and construction sites) with one vendor. Often to play in this market, vendors need to offer an online ordering portal where the customer's authorised personnel can view their contract priced items and place an order. The entry point to reach this portal is via the website. A sales team sells this concept and negotiates pricing, which is a huge magnification of their selling time.
Websites have become the replacement for the glib sales pitch.
Most of us (in Australia particularly) are turned-off by a business person rabbiting-on about their company. The trick is to say just enough to peak interest and then let the website do the rest. This introduces a whole new topic about "elevator pitches" and the "sprat-pitch" - but, the key point is, the website needs to be a sharp instrument subject to continuous honing and refining.
Building the company website is a journey not a destination.
Pruning the CRM
People leave organisations, change email addresses and phone numbers. If your processes are well developed you will detect these changes early and can take action. These changes are a sales opportunity...
- Rather than simply deleting them from the CRM, find out where they went! In their new role they may still be in the market for your products and services.
- Find out who replaced them. Don't lose a lead simply because the contact person left.
- If they have changed contact details, call the organisation and find the new details. This provides a valid reason to re-engage with them and determine if other circumstances have changed that may lead to a new sales opportunity.
Lack of CRM maintenance is a common failing in sales organisations. Eventually, the CRM is so far out of date it becomes a dead weight absorbing resources and sales people lose faith in it.
Constant attention to the CRM to keep the data fresh should be a key sales task. Often, the quickest way to check the details are still current is to simply ring the person-up. This isn't a bad thing is it? Most CRM's will have a date-of-last-contact field to enable you to prioritise who should be re-contacted first.
The red dot
In the middle of the schematic is a red dot - "Leads to follow-up, the BIGGEST challenge."
So, we talked about this above; most organisations do not follow-up every lead that comes their way.
But, in this context it's different. The schematic depicts the mature sales organisation with all of the key components in place...
inter-meshing nicely into a well oiled mean, lean, lead-generating and order-taking machine.
So, we have all the tools to monitor, measure, and track leads - none should slip through the cracks.
But they do. Here's why.
- Sales people are pressed for time: No organisation has enough sales people to keep pace with a well set-up lead generation system.
- No one is checking: Without a person monitoring follow-up performance, leads will be forgotten.
- Lack of sales automation: Sales automation simply means identifying routine low value tasks in the sales process and finding software to either perform the task or assist with the task.
- Tending to existing customers: Sales people should be allocating time to ensuring high-value accounts are being looked after. That leaves less time to attend to leads.
The single most time consuming sales process is bidding, quoting and writing tenders.
It's simply staggering the number of organisations that have no standardised process for writing quotes.
Failure to deliver quotes in a timely manner is a big factor in poor sales conversion rates. A simple test to identify lack of standardisation and process is to collect together the last 20 bids and quotes produced and compare them for consistency; invariably, you will discover each sales person has their own template or worse reinvents the wheel each time.
Often, terms and conditions are either non-existent, many versions are being used, or at some point in the past, the organisation went through the pain of writing a standard T&C's document (after a customer went rogue and the legal action went no where due to not having standard T&C's) and it was used for a while but in the haste to get quotes out the door, it has been forgotten about.
Lastly, solution selling requires a customised solution. If the sales person is reliant on a design and estimating team to develop a solution - this is invariably a bottle neck.
Standard procedure that defines how the sales team produces a requirements specification, briefs design and estimating, and packages the solution into a proposal will go a long way to streamlining the process.
Also, do you actually need to produce a fully costed proposal for every enquiry? With tenders knowing when to hold and when to fold is key to efficiency.
The 90 day rule
Not every lead converts immediately, however it should still be added to 'the tank' (CRM) for future re-marketing and sales follow-up. A failed lead today could become a customer tomorrow. Old sales jungle saying "the squeaky door gets the most oil."
The time honored rule in sales is that you need to contact a lead, past customer or sales prospect within 90 days of the last contact. The reasoning is, a person's ability to spontaneously recall your name (or your organisation's name) decays 50% every 90 days. So, after 180 days they will be 25% likely and after a year this will have diminished to 6.25% (these numbers aren't scientific; more conceptual).
Spontaneous recall is akin to 'top-of-mind' awareness. Works like this; after first meeting you or seeing some element of your marketing activity, if they have no immediate need for your products or services, they will not think about you again until a need arises.
When they are ready to buy, the chance of them joining the dots and recalling that you have a potential solution to their problem - diminishes over time.
This is a strong case for the dreaded e-newsletter because even if they simply delete it from their inbox, they will at least have noted who sent it.
Of course, 'staying in contact' can take many forms; newsletter or other form of Electronic Direct Mail (EDM), physical mail (envelopes with stamps. So neglected, it's likely to come back into fashion), online adverts, a poke on LinkedIN, a face-to-face visit or a phone call. The disadvantage of EDM is the possibility a disengaged prospect may click unsubscribe' removing them from your mailing list for all time (or more accurately, obliging you not to send any more EDM's).
Staying in contact is best done personally, however it is one of those tasks that can be handed over to automation.
When is a customer, no-longer a customer?
A customer is someone who buys from you (or, as a credit manager once corrected me someone who pays you). The CRM should distinhuish between...
- Potential customers: Never bought from you before, but are still coming through the sales pipeline.
- Current customers: Have purchased from you recently enough for you to still consider them a customer.
- Lapsed customers: Used to buy from you, but haven't for a while.
How long since a last customer ordered is the distinguishing criteria between current and passed customer. How long is really a function of the average sales cycle for your industry and your customers. For big ticket sales several years wouldn't be unusual. However, your stationary supplier might get concerned if an order wasn't placed every month.
Having established the time period, the next step is to set-up a process for identifying the lapsed customer peak moment of transition (today we classify them as a customer, tomorrow they are now defined as lapsed) and assign an action (call them, find out why). The period immediately after they are reclassified as a lapsed customer is the best time to contact them. Your aim (obviously) is to get them back.
Your first steps toward building a digital lead generation system on steroids
Building a full stack fully integrated digital lead generation system takes time and money, and requires resources to keep the machine running and on the tracks.
Done well, it will definitely boost sales (assuming the market size isn't declining).
The best advice however, is to start slowly and build-up. At the bare minimum, however...
- Install a CRM
- Capture and measure every lead
- Set-up a system that consistently and 80% accurately records where your leads are coming from
- Avoid obsessing over measuring ROI on lead generation activity, start-first with a basic easy to implement system
- Standardise sales processes
- Carefully supervise sales staff and ensure they are following-up every lead
- Invest in a high quality website and keep it current, relevant, and informative
- Invest in both online and offline marketing
- Apply pragmatic excellence
- Practice continuous improvement