November 16, 2005
Do your resellers (or even your sales reps) routinely ignore the leads you generate for them? No, a fancy extranet won't help. Neither will sending reps email begging them to follow up. Here's a behind-the-scenes peek into how one marketing team made four practical changes to their lead generation programs. Now resellers follow up on 95% of leads:
CHALLENGE GE Access Distribution, a distributor of complex computer products and services, had a real problem: due to poor lead quality, resellers were routinely ignoring leads. (Sound familiar?)
Even though the company ran a handy extranet lead portal for resellers, and also sent resellers automated emails reminding them to check their leads, only 60% of leads were being “claimed” – that is, a reseller “accepted” the lead by clicking a button in the system.
“It was our fault, really,” admits Sarah Fritz, Manager for Marketing Services and Demand Generation. “We used really low quality telemarketing companies to generate leads. Of course, resellers ignored them. They had been burned too much in the past.”
Fritz’ goal was aggressive: Obtain a 100% lead acceptance rate. Plus she wanted resellers to raise their current 9% lead closure rate to 50%. For Fritz, closure meant determining what happened to the lead once a reseller claimed it.
CAMPAIGN To get to the root of the problem, GE Access Distribution underwent a real change in culture. “It was a s-l-o-w process and included everything from looking at our lead distribution system to communicating our value to our resellers as well as internal changes.”
First two steps:
o Defining specifically what qualities make a "lead" and getting everyone to sign on to that definition.
o Convincing resellers that the company would no longer be throwing poor quality leads in their laps.
Next, Fritz and her team made four critical changes: Change #1 – Evaluated lead suppliers based on quality
“Everything revolves around the almighty dollar,” says Fritz. That's why for years GE Access Distribution had used telemarketing firms (and other lead gen vendors) who were less than par.
“Our suppliers were motivated by basic marketing metrics,” says Fritz. “They paid more attention to things like number of dials or number of leads sent to the field. No one was looking at the quality of the leads, the percent of the market being penetrated, or if the leads were even generating sales.”
Fritz started with the most expensive per lead vendors and worked her way down the ladder to the cheapest ... in each case deciding whether to keep or leave them based on their ability to generate high quality. Those providing less were let go. Those that remained were held to increasingly higher standards.
Change #2 – Simplify the lead distribution system
For years GE Access Distribution had run a fairly complex extranet for lead distribution. Leads were put into the system and each reseller had a portal and log-in.
“What happens,” says Fritz, “is that you end up relying on the system to do your work for you.”
So Fritz stripped out the complex pieces of the lead distribution system no one was using and devised a much simpler one in its place. Once resellers claim their leads, they then had to click a button to “close” the lead, meaning, tell what happened to it. The button read: Sale –> yes or no
o If “Yes,” the reseller input the revenue associated with the sale.
o If “No,” the reseller was presented with a list of choices: No budget; Bought from competitor; or Not ready.
Fritz used the resulting reports to drive the rest of her lead generation efforts. “I don’t care if I find information I don’t like,” she asserts. “If I have an 80% ‘no sale’ rate, what I want to know is why. Is it due to faulty promotions? Poor telemarketing? The ‘no sale’ rate also gives me leverage with my suppliers – I want to know why these leads were sent to the field if they weren’t sales ready. This shows me their lead qualification processes aren’t up to snuff.”
Change #3 – Don't rely on email alone -- get on the phone
“You need human initiative on the back-end to get those leads moving,” says Fritz. Rather than rely on a lead distribution system to push automated email messages reminding resellers to follow-up on leads (which were either ignored and/or immediately deleted), her team began to phone resellers in person to remind them about unclaimed leads.
If a reseller still doesn’t claim leads, the follow-up is “escalated” and the reseller is warned that if leads aren’t claimed, they will be pulled from the program.
Fritz also tested using the company's inside sales group to support tracking specific leads through the channel. First she tested the idea with a single vendor's products -- Sun Microsystems. Inside sales were given complete “visibility” of leads. “It only made sense to have this team support our lead follow-up; they are on the phone with resellers for various other things every day.”
Change #4 – Communicate value of marketing programs to resellers
“Basically,” Fritz describes the past, “we would run a marketing program without much input from the OEM.”
Now Fritz and the team switched tactics, closely involving resellers to determine which products and solutions to market, to develop messaging and offers, and to determine end-user demographics (target market, vertical, size of company, etc
Although GE Access Distribution's demand generation programs are built for VARs, resellers generally don’t have to pay for them. However, in order to communicate value, Fritz began putting a price tag on each program. Example, “We’re going to market to 250 companies in your specialty and get information for you. This won’t cost you anything, but the value of the program is $9,500.”
“We do this,” says Fritz, “so that we can communicate our value to our resellers. This is a real culture change for us. In the past, distributors – including GE Access Distribution – have been thought of as ‘product pushers.’ As a distributor, we want to be known for providing services that help our OEMs and resellers succeed.”
RESULTS After a solid year of revamps, GE Access Distribution has increased reseller lead claim rate by 58%. In the past 60% of leads were claimed, now 95% on average are. Plus, the program increased lead closure rate (defined as a reseller reporting back on sales success or failure) from 9% to 30%. Fritz admits this well short of her 50% goal, but we feel it's still darned impressive. “I have a lot of open leads,” she says. “Increasing my closure rate is now my main goal.”
The test program using inside sales to get feedback from resellers for Sun products, increased lead closure rate by 5% in just 30 days. Fritz says she’ll be implementing the same program with other OEMs in the coming months.
With her new lead tracking system, Fritz is now able to close the loop on sales – a capability few channel marketers have.
Says Fritz, “There is a closed loop process on lead generation for channel marketers, you just have to be diligent about it. If I’ve learned anything from this program, it’s that you can’t rely on systems to do your work for you. It takes human effort both internally and externally to support the process.”
Useful links related to this article:
Past MarketingSherpa article, ‘B-to-B Channel Marketing in Crises – Top Three Pain Points’: http://library.marketingsherpa.com/sample.cfm?contentID=3088
'How to Pick the Best B-to-B Telemarketing Firm: Quick Buyer's Guide' http://www.marketingsherpa.com/sample.cfm?contentID=3118
GE Access Distribution http://www.geaccess.com