The Tale of Two Leads — And How They Generated $1M in Closed Business

Shutterstock_146762978One of our clients is a software and services firm that sells to medium-to-large financial service institutions. During the second half of 2014, the client asked us to make contact with approximately 1,600 organizations, to qualify them (from a size, operating environment and needs standpoint), and to identify highly qualified, sales-ready leads for the client’s consultative sales staff to work and to close.

While this is a work in progress due to a very long sales cycle, there were two opportunities that closed in Q4. Before we dig deeper into how the process works, here are some details about the two leads that closed—each for $500,000.

Lead #1: Privately owned regional bank — $7 Billion in assets

  • We identified the VP of Special Assets and the CFO
  • The CFO directed us to the EVP, Chief Risk Officer, who directed us to…
  • The Director of BSA (Bank Secrecy/Anti-Laundering), who directed us to…
  • The Assistant Manager, BSA
  • That individual was tasked with BSA compliance (based on their unique background)

After 13 call attempts, 5 emails, and 1 scheduled call, it was a lead.

Five months later the lead closed for $500,000.  

Lead #2: Privately held Money Transfer Network — $30 Billion in assets

  • We followed up on a web hit
  • Contact engaged on first dial

After 1 call attempt and 0 emails, we were able to deliver to the client a lead.

Four months later the lead closed for $500,000.

The first lead is a classic example of how most leads are produced—that is, via multi-touch, multi-media and multi-cycle processes. On one occasion some years ago, after four touch cycles and 42 touches total, the CFO of the fourth largest utility company in North America called us back and said, “Don’t stop calling me, you are my conscience,” and that lead closed for a billion dollars five months later. Honest! The second lead is a great example of how marketing over time can culminate into what looks like an inbound, bluebird opportunity—and close.

The Process of Generating Leads, Pipeline, and Nurture Opportunities

I get asked all of the time for more details about how the multi-touch, multi-media and multi-cycle process actually works. Essentially, we use a combination of touches: calls, voicemails, emails, and in some cases direct mail, to gain attention and interest of prospects in order to drive a conversation. While it is not rocket science (although we have supported clients that sell a diverse array of solutions including rocket science into the DoD; and genome testing equipment into large labs), there are a LOT of moving parts. Here is an example of the outcomes in addition to two closed pieces of business for this client:

Disposition* (Complete) Type

Number

Percent

Total

1652

100%

Sales Ready Leads

63

3.8%

Pipeline (still working)

33

2.0%

Nurture

423

25.6%

Not Qualified

119

7.2%

No Response

831

50.3%

Bad, Other

183

11.1%

We disposition* companies at the rate of approximately one per hour. So, to complete 1,652 dispositions requires 1,652 hours. The fee for that number of hours is approximately $100,000. As a result, the score (project to date) is $1,000,000 in closed business at a cost of $100,000. Most people in the software world would agree that is a pretty darn good return—but we’ve only just begun.

In case you’re wondering, I realize how confusing it can be to use “Nurture” as a noun AND a verb—but we have yet to change it. To clarify, the definition of a “Pipeline” disposition is a qualified company, contact, and operating environment with a specific next step scheduled within a reasonable period of time—after which we expect to drive a lead a high percentage of the time. The definition of a “Nurture” disposition (in this case a noun) is a qualified company, contact, and operating environment, but without any specific next step in the short-term. “No Response” dispositions are valuable for a few reasons.

First, this group contains actionable leads that simply have not yet been identified (and probably aren’t ever identified by most companies). Second, since we tend to ferret out “Not Qualified” and “Bad/ Other” dispositions early in our initial touch cycles, this group is by definition cleaner than the initial target list. Third, we are able to do some additional segmentation prior to our subsequent market contact activities (multi-cycle) that allows us to ignore lower ranking segments and focus on higher ranking segments. Unfortunately, most of the time Pipeline, Nurture, and No Response dispositions are ignored by marketing and sales. What a waste!    

According to SiriusDecisions, average sales organizations close about 20 percent of highly qualified sales opportunities, while best-in-class close closer to 30 percent. To be conservative for the purpose of this blog, I am going to assume a conservative 10% close rate on highly qualified leads:

With further nurturing of Pipeline, Nurture and No Response dispositions, additional closed business should occur as follows:

 Disposition (Complete) Type

Number

Lead Rate

@ 10% Close

 

$ Revenue Won/Expected ($500,000 Avg)

Closed Won

2

N/A

N/A

$1,000,000

Sales Ready Leads

61 (63-2)

N/A

6.1

$3,050,000

Pipeline (still working)

33

20%

.6

$300,000

Nurture

423

27%

11

$5,500,000

Not Qualified

119

0

0

0

No Response

831

7.5

6

$3,000,000

Bad, Other

183

0%

0

0

 The fee to nurture Pipeline, Nurture and No Response in this case is approximately $80,000. This nurturing requires the same multi-touch, multi-media and multi-cycle process required for the initial market qualification work. So, we use a combination of touches: calls, voicemails, emails and in some cases direct mail, to gain attention and interest of prospects in order to drive a conversation. Our philosophy, unlike others, is that we are NOT simply trying to drive a meeting. Why would a sales rep want to spend time with someone who can’t, won’t, or shouldn’t buy?  

As you can see, the scorecard shows $12,850,000 in projected closed business; $180,000 in fees for services.

Why Most Companies Don’t See Results Like This

  1. The so-called leads sent to sales from other marketing activities are often not really leads. They are more than likely a mix of hand-raisers and/or inbound scored leads where activity is mistaken for need and interest.
  2. Follow-up by sales is limited to one or two telephone calls and/or emails and opportunities are squandered. You’ll hear, “I tried three times and they did not get back to me.” It often takes 8 – 12 follow-up attempts to reach a decision-maker—even on leads. There are best practices around lead follow-up that include an immediate call and email to position yourself as a value added resource, as opposed to an order-taking, low-level sales rep.
  3. The sales rep engages the lead with the wrong approach. Here’s one of my favorites: “Some telemarketing company in Atlanta said you were interested in our solutions … what do you want to buy?” Seriously, we had this client’s sales rep’s opening statement recorded.

To achieve the results projected in this blog, you have to take advantage of the opportunity to drive up the response from most marketing programs—by up to 3x. 

*Disposition - noun: the classification of a prospect account as determined after a cycle of lead qualification activity; verb: to classify prospect accounts using a cycle of lead qualification activity. Standard PointClear disposition categories include: Lead, Pipeline, Nurture, Disqualified, No Response, Bad.

About the Author: 

Dan mcdaderet_favorite_250Dan McDade is President and CEO of PointClear, LLC, a prospect development firm that helps B2B companies drive revenue by nurturing leads, engaging contacts and developing prospects until they're ready to purchase. The Sales Lead Management Association named McDade one of the 50 most influential people in sales lead management for the last four consecutive years. His first book, The Truth About Leads, is a practical, easy-to-read book that helps B2B companies focus their lead-generation efforts, align their sales and marketing organizations, and drive revenue. Read McDade’s blog (ViewPoint l The Truth About Lead Generation) or contact him by email at dan.mcdade@pointclear.com. Follow him at @dandade on Twitter.

 

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