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20063a0Today's blog post is by Dan McDade, author of The Truth About Leads.

 

 

ThetruthaboutleadsRecently, over a cup of coffee, Dan Waldschmidt (Waldschmidt Partners) and I talked about the herd mentality that causes many well-intentioned businesspeople to follow the crowd blindly – often in the wrong direction – based on one so-called expert or another proclaiming that “cold calling is dead” or “content is king,” as though it were all that simple. Dan subsequently published a blog post called “Sometimes the experts are idiots. So just go be awesome.” Read the post, but here are some thoughts he shared.

He wrote about some dubious statements:

“In 1899, Charles H. Duell, Commissioner of the US Office of Patents, astutely noted, ‘Everything that can be invented has been invented.’ Since then, 7,673,820 inventors have received patents from the USPTO.

“In 1943, Thomas Watson, chairman of IBM, observed, ‘I think there is a world market for maybe five computers.’ As of June 2010, there were approximately 1,966,514,816 computers connected to the Internet – accounting for roughly 28% of the global population.

“In 2007, Steve Ballmer, the CEO of Microsoft, proclaimed, ‘There’s no chance that the iPhone is going to get any significant market share. No chance.’ Since 2007, Apple has sold almost 430 million iPhones. Microsoft has only sold about 2% of that number.”

Also in his blog post, Dan advised the following:

“You should keep dreaming big dreams. You should refuse to believe that things won’t change.

“What you feel doesn’t need facts yet. It just needs you to believe. To believe so passionately that you move past logic, criticism, and everything that you think is possible in the pursuit of making it reality.”

Dan also shared these ideas with me:

“My problem with the crowd mentality is that it lacks an authentic environment for replication. From weight loss to financing to working from home and business growth, experts will try to convince the crowd that the expert's plan is easily replicable. Even if the experts are sincere, they are sadly misguided.

“Regardless of the specifics, the crowd mentality focuses on what everyone else is doing, rather than what each specific member of the crowd should be doing. Adherence, rather than creativity, is rewarded, and that by itself is a pretty big problem.”

There was a time when “nobody ever got fired for buying IBM.” Today, it seems that nobody ever gets fired for abandoning outbound marketing in favor of inbound marketing. It’s now possible for marketing to pass a higher quantity of poorly qualified leads to sales faster than ever before. The result: sales mostly ignores the avalanche of poorly qualified leads that scored high enough (according to the marketing department) to be sent to sales as marketing-qualified leads. One marketing organization we work with passes thousands of leads to sales knowing that only 1.28 percent of what is sent is qualified. Honestly, people – this has got to stop!

There are three things that organizations can do to stop the insanity:

  1. Sales must proactively accept or reject marketing leads within 48 hours of receipt. If rejected, a judicial branch made up of senior marketing and sales executives, along with a C-level executive (in larger companies), should determine if the lead did not meet the agreed-upon lead criteria or if sales follow-up was insufficient and/or ineffective. This will reduce lead leakage by not allowing a lead to go into a black hole. Neither marketing nor sales can maintain the status quo. Statistically backed accountability will drive continuous improvement.

  2. Once a lead is accepted by sales, a realistic close rate should be agreed upon and worked toward (including eventually working toward improving that rate). Ask reps today what percentage of qualified leads they can close, and they will tell you 60–80 percent. What they are really saying is that they will close 60–80 percent of the leads they thought they were going to close. According to some industry analysts, average companies close about 20 percent of sales-qualified leads, while best-in-class sales organizations close closer to 30 percent. No sales rep wants to take credit for losing four out of five times, so organizations do not have visibility into lead status unless the lead is close to being won or it is too late to do anything about it. Sales reps will sell more when they are focused on fewer opportunities but held accountable for the process their company has put in place for lead pipeline and forecast movement. Without step 1, step 2 is impossible.

  3. Kill the insane preoccupation with the lead-definition “god” called BANT (budget, authority, need, time frame). In The New Solution Selling by Keith Eades, there are two important “truths”:

            “The not-looking buyer has great potential.

            “When the salesperson sells into latent pain, that salesperson has an excellent opportunity to set or define the buyer’s buying requirements.”

    Yet most companies’ sales reps are uninterested in leads unless they are BANT qualified. Unless you are selling an inexpensive solution or a commodity, you are too late to the game when you wait for a lead to be BANT qualified. But here is what “general-interest lead” means to different audiences:

    AVERAGE SALES REP: “No budget, no timeframe, no interest in working it. I would rather take someone who is nice to me to lunch, rather than work strategically on a sale.”

    ELIGHTENED SALES REP: “Authority [decision maker or coach influencer] and need or pain [backed by some form of compelling event] – I’m on it! I know that I have a better chance of closing a strategic deal when I’m in early. Let my lazy brethren fight for the crumbs.”

Break away from the crowd! The next time you hear someone say, “Seventy percent of the buying process is complete before sales needs to get involved,” respectfully but forcefully disagree. Do something different, because following the crowd is not going to work. As Dan says at the end of his blog post, “No one can stop you if you won’t be stopped. Choose to be awesome.”

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Iain Swanston

When a buyer is already engaged in the sales process they start looking for information and reach out to suppliers - this is what we call Demand Fulfillment. Top sales people do this but they also do Demand Creation - this means they proactively go out and sell their solutions to companies they know have similar pains to their existing customers. Sales people who work in the Demand Creation sector have less competition and therefore higher closing rates.

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