No one likes to cold call prospective buyers. Rejection is hard to take on a personal level, and if a salesperson faces a choice between a painful dental procedure or picking up the phone to call strangers who usually say no (when they’re reachable at all), the dentist often seems the better choice. Ouch.
But no company can succeed without reaching out to prospective buyers. Many companies employ inhouse telemarketers to do the dirty work, but that requires a huge commitment in staffing, infrastructure, and scripting, not to mention replacing those who realize that facing constant rejection isn’t a viable career choice.
Outsourcing is option, of course, but employing a prospecting firm isn’t as simple as turning a contact list over and waiting for hot prospects to roll in. A successful outsourcing deployment requires clear direction by the company to identify likely prospects, tailor a sales pitch, develop qualification standards, create a follow-up system, and put metrics in place to gauge its effectiveness.
Banging heads
Dennis Jones and his employer, Jack Henry & Associates, have suffered through bad implementations both of inhouse and outsourced prospecting. Jack Henry, based in Monett, Mo., is a technology provider for the financial industry. “When I came to Jack Henry in 2004, there was a big initiative under way to examine inhouse and outsourced prospecting,” recalled Jones, marketing manager.
“Jack Henry had just suffered through an unfortunate outsourcing experience, and I came to Jack Henry with a bad taste for inhouse prospecting. Candidly, telemarketing inhouse is simply not a core competency for most marketing departments,” Jones said. “I truly believe that comes across on the telephone. It’s 3 p.m., and the telemarketers are ready to bang their heads on their desks.”
After taking into account the daunting financial burden of running an inhouse telemarketing department, Jack Henry decided to give outsourcing a try. The company chose TeleNet Marketing Solutions as its outsourcing partner following a due diligence analysis on four finalists.
Jones stressed that any outsourcing engagement should include this step to help ensure a partner has the wherewithal to perform the task. The calling database is derived from leads compiled by the company’s sales force, so potential buyers already have been qualified to some degree as opposed to buying prospect lists from a compiler of such information.
In the first six months of the partnership, TeleNet uncovered more than 350 leads, including 110 “hot” leads, those where a bank or credit union was to make a technology choice within a year. The firm also uncovered 83 prospects that planned to buy within two years, 151 considering a purchase more than two years out, and 22 interest leads.
“For my sales managers, there’s a lot of financial slicing and dicing, including number of calls placed, number of completed surveys, total leads, and how much money was spent,” Jones said. “Most important, we look at qualified leads and turn them over to the sales team, and they engage with the client.”
Jack Henry & Associates looks closely at how much each qualified lead costs from outsourcing, direct mail, and trade shows. “Without a doubt, outsourced lead generation has been best for us and the second least expensive,” Jones said. “Trade shows are a necessary evil, and direct mail is cheap, but the response rate is poor.”
To prove the value of outsourcing, Jack Henry sent a direct mail piece to 300 credit unions, receiving two responses, for a 0.6% response rate. The company turned the same list over to TeleNet and received 31 leads, for a 10.3% response rate.
Jones calls TeleNet a partner because the outsourcer uses a best practices methodology and helps develop the calling script, calling frequency, and reporting structure while Jack Henry provides the carefully vetted contact list. “I know that the phone rings eight hours every day, and they’re judicious about who we’re calling,” Jones said. “This program has exceeded my expectations.”
Wasted time
The Herman Group, a management consultant and professional speaking company based in Greensboro, NC, had the opposite experience with outsourcing. Joyce Gioia, president, said the company spent “three months, a lot of effort, and thousands of dollars” with a reputable outsourcing firm that ultimately did not deliver.
“There must be clarity between the outsourcer and the client,” Gioia said. “Our business is more complicated in terms of consulting and speaking than what they usually handle.” The Herman Group provided a prospect list of unqualified leads and a list of target companies, but the outsourcer did not qualify the potential leads adequately, resulting in much wasted time.
“We do it internally now, which works well for us,” Gioia said. “But it’s time intensive, and we thought our time could better spent.”
Prospecting isn’t a core competency for many salespeople schooled in the belief that one can’t sell anything by sitting behind a desk. Prospecting Professionals uses the same methodology it developed at sister company High Probability Selling, which offers sales training, to do the dirty work for companies by calling qualified prospects and putting forth an offer that results in a sales appointment.
The company’s clients generally sell products worth between $30,000 and $1 million, so hiring a firm to get those crucial appointments is money well spent, said Jacques Werth, principal at Prospecting Professionals, based in Media, Penn.
“If you think about calling up a prospect as cold calling, most people don’t want to do that,” said Werth. “How can I get myself to do things I don’t want to do? You persist in trying, and the client pushes back, they’re angry and cut off communication, and the salesperson feels personally rejected.”
The company develops a sales offer of between 35 and 45 words and calls prospects. “Most say “no,’ some say “yes, but not right now,’ and some say “send an e-mail,'” Werth says. “The key is to call once a month and change the offer for the same thing. The average person who says “yes’ takes three offers.”
And if an administrative assistant takes the call, the same offer is made to the assistant, enlisting that person’s aid to help make sure the offer gets to the decisionmaker. “Companies that know they haven’t been able to get to the right people need to look at outsourcing,” Werth said. “It takes talking to 55 or 60 people before one of them says “yes.'”
And without that crucial “yes,” no business can get done.