May 02, 2007
Leads are the lifeblood of B-to-B marketing, and every marketer running lead generation campaigns has wished for an easier way to boost their efforts instantly.
But, finding true leads in the world of third-party sources and services is tricky. That’s why we put together this tutorial that outlines the differences among a contact name, an inquiry and a hot lead. Includes places to look, qualifying questions to ask and tips on selecting a vendor.
Buying leads, rather than developing the campaigns to generate them, might seem an appealing way to fill the pipeline, and a host of online and offline services exists that offer leads to anyone with some money to spend.
Beware, though: not all *leads* are equal. “Everyone calls everything a lead, but there’s a difference between a contact -- a name you should call -- and a response and the next couple of steps along that continuum,” says Kate Baar, Marketing Director, Hitachi Consulting.
Finding true leads -- contacts that fit your company’s customer profile and actually have a need for your product or service -- is tricky in the world of third-party lead generation sources and services. Most leads for sale are actually much further away from the sales-ready goal, constituting contact names or inquiries.
It’s not that contact names or inquiries are bad, but they require much more work on a marketer’s part to get them ready for the sales team. So it’s important to know what you’re getting when you buy leads or pay a service to generate leads. This article breaks down some of the different sources and services for those leads, with tips on where (and where not) to slot them into your company’s marketing efforts.
Definition of a Lead
Since the marketplace uses the term “lead” for any number of options, you need to first come up with your own criteria of what constitutes a lead. While the details will change, the general definition includes a company that’s a good match for your product but that also has a need for your product and has indicated some interest in listening to offers.
Judge leads based on:
- Company profile. The company must be in the right industry, be the right size and in the right geographic region for your product or service.
- Contact person. A lead must be someone with the authority to make purchasing decisions. For big-ticket products or services, this may involve several people and departments, such as finance, operations and IT.
- Immediate or future need. Even the right people at the right company might not be leads if they aren’t in the market for your product or service. The best leads are actively shopping and have a project budget and timeline in place. The next best leads have at least expressed interest in hearing from vendors.
Names vs Leads
A simple online search will turn up dozens of outlets promising to sell you hundreds or thousands of leads, but these sources are selling contact names, not leads in the sense that they have indicated a need and an interest in hearing from you.
Buying names differs from mailing list rental, which grants you one-time permission to send email or postal direct mail to a third-party’s contact list but doesn’t let you actually see the names or their contact information. (For more on list rental, see below for the hotlink to our recent Tutorial.) Purchased lists let you see who you’re contacting, but often contain restrictions on how often or how long you can use the list -- e.g., one time or for one year.
List providers allow you to target specific industries, company size and job titles, such as CFOs at manufacturing companies with annual revenues of more than $1 million. But this targeting ability doesn’t necessarily mean that the contacts are in the market for your product or service.
You can buy contact names from list providers, such as infoUSA, USA Data and D&B. Or, you can join online networks with searchable databases of company information, names and contact information, such as Jigsaw, Spoke and ZoomInfo. Consider these names raw materials that must be contacted and cultivated to determine if they’re actual leads.
Responders and Registered Users
A prospect who submitted contact information in response to a marketing or educational campaign, such as a white paper or webinar, is more qualified than a name on a list -- at least they have expressed interest in your company. Besides in-house efforts, marketers can turn to third parties that help generate and collect these responses and registrations. Typical sources include:
o White paper syndication services (see our special report on white paper syndication in the hotlinks below)
o Sponsored webinars
o Lists of trade show attendees, often included for companies that sponsor or buy a booth at an event
o Co-registration deals, such as Oracle’s sponsorship of a discounted subscription rate to The Economist magazine for customers who met registration criteria
The challenge with responders and registered users is “only 5% to 15% of inquiries are sales-ready leads. The other 85% are simply interested in information and not ready to talk to a salesperson yet,” says Brian Carroll, CEO, lead generation service company InTouch Inc.
These individuals can still be moved into the lead cultivation pipeline, and some marketers choose to turn to telemarketing firms to call down the list and further qualify those names (see the Telemarketing section below).
Vendor Matching Services
B-to-B websites such as VendorSeek and BuyerZone match potential customers with appropriate product or service vendors by offering Web users a handful of quotes based on criteria they enter. These sites use their own search marketing techniques to generate traffic and then ask users to submit details about their requests to find appropriate vendors in the database.
By participating in a search, customers have signaled a need and willingness to be contacted by vendors. Those vendors are then sent details about the project and contact information for follow-up. “The customers that come to the website are interested in the product that you sell, so you’re not dealing with as much time prospecting. You can spend more time selling,” says Ken Wisnefski, President, VendorSeek.
- Costs. Vendors pay per lead, with prices typically determined by the value of the project, size of the company or specialization of the lead (the higher the value of the project, the more expensive the lead). VendorSeek, for example, charges $15 to $50 per lead.
- Qualifying questions. To make the best match, vendors must think carefully about the criteria they use to screen users. Typical screening criteria include:
o Industry or sector
o Company size
o Volume/size of project
o User’s title or position
- Results. The volume of leads will depend on your category and screening criteria. Web design firm Impact Direct has used VendorSeek for two years and has found that about 20% of leads delivered through the site convert into customers. “I feel like 75% of our job is done, but you definitely still need some salespeople to reel them in,” says Jim Keogh, Internet Marketing Director.
Three issues to keep in mind:
- Vendor matching services work best for companies with a national reach. If you’re a service provider who can only work in a limited geographic region, you might not have a high enough volume of Web searchers to justify the technique.
- You’re competing with other companies. No lead is exclusive to your company, so you’ll need to differentiate yourself from other vendors who are all pitching the customer at the same time.
- You need to follow up quickly. Online services send you leads as they come through the site. If you can’t turn them over immediately to a sales or marketing person who’s ready to make the follow-up call, you’ll probably miss your opportunity.
Making calls to verify contact information or determine a potential customer’s needs or otherwise qualify a lead can be extremely time consuming and generate more misses than hits. MarketingSherpa data has found that technology marketers who handle their own telemarketing efforts report 60% of these calls are duds with no follow-up value.
Because of the effort involved, you may want to hire a firm that will handle the calls for you and deliver you only the names that are worthy of your staff’s time for follow up.
-> Step #1. Determine your telemarketing needs
Telemarketing firms offer several service options, including:
- List qualification/teleprospecting. These firms will call names on a contact list (either one you’ve provided, such as names collected by a trade show or in other lead-generation tactics, or their own lists) and ask questions to determine their appropriateness or current need.
- Appointment setting. These firms will determine not only whether a lead is appropriate, but also set appointments for your sales staff to make a follow-up call or meet the prospect in person.
- Lead nurturing. These firms typically work year-round for clients, calling potential customers to establish a relationship, getting them to opt in to receive additional marketing materials from a vendor, such as white papers or product announcements, then following up after each contact to determine if the lead has moved closer to a buying decision that requires your sales staff to jump in.
-> Step #2. Plan your campaign
You need to spend time up front with the telemarketing firm to ensure that they understand your industry and the product or service you’re selling. Then, you need to outline the following key factors of the plan:
- Deliverables. You can set realistic expectations for how many leads or appointments to expect given your industry and typical sales cycle. Another approach is to set a revenue goal for the campaign (such as $100,000 in new business), then analyze your average sale and typical close rate to determine how many leads or appointments you’ll need to achieve that.
Also determine whether the telemarketer will break down potential leads into different categories, such as those with an immediate need and a budget in place or those who are planning for a future purchase and need further contact.
- The list. Most firms will provide or generate their own calling list or work with a list you hand off to them.
- Qualifying questions. Asking the right questions will help callers determine the quality of the lead, so focus on obvious criteria, such as whether the contact is the key decision maker, has budget authority and is in the market for a new vendor or planning a future purchase.
But also plan to gather other business intelligence from contacts who may not be leads. If a contact says they’re not in the market for a new vendor, ask which company they’re currently working with and what they like about them. This approach can help you learn something about what makes that company tick for future marketing efforts.
- The pilot campaign. Before calling hundreds or thousands of contacts, test your list and qualifying questions with a short-term, focused effort that lets you gauge results and tweak the approach to generate the most leads.
-> Step #3. How to pay
Compared to search marketing and other online tactics, telemarketing is an expensive proposition, costing from several hundred dollars to $1,000-$1,500 per lead. Telemarketing firms typically charge three ways:
o By the hour for staff calling time
o By the completed contact
o By the lead or appointment
Despite the apparent differences, some marketers say the billing methodology doesn’t make much difference in the final price. The telemarketers typically know how much time it will take to generate leads from a contact list, so they build it into their per-lead cost.
“I’ve paid by the hour and paid by the completed contact, but, ultimately, you have a run rate of $100,000 per year. It wasn’t so important how they charged us -- it came out to same dollar amount anyway,” says Hitachi’s Baar.
Three tips for working with a telemarketing firm:
- The skill of the calling staff is paramount. Ask to interview members of the calling team to make sure they understand your industry and can speak intelligently with your typical customer.
- Ask for tapes of actual calls to hear how the interview process went and listen for important signals from leads.
- Build feedback from your sales force into the process. Have sales reps keep detailed notes about the leads turned over by a telemarketer, including which were good and which turned out to be duds. This way, you can continually refine the process to improve the leads.
Useful links related to this article
Tutorial: Renting Email Lists - Costs, Deliverability & Targeting
Special Report: How to Syndicate Your White Paper Successfully
B-to-B list providers
Online B-to-B contact databases
Vendor matching websites
The Lead Dogs: