IT Sales Lead Generation

Transcription

1 Technology Sales Leads. IT Sales Lead Generation Understanding the Complex Sales Needs of the IT Industry White Paper Author: Mark Cradock Technology Sales Leads June 2008

2 IT Sales Lead Generation Understanding the Complex Sales Needs of the IT Industry Table of Contents 1. Introduction Complex Sales Enterprise Prospecting Methodologies...3 Stage 1 - List Development...3 Stage 2 - Account Profiling...4 Stage 3 - Sales Lead Generation...4 Stage 4 - Lead Nurturing Implementation Sales Pipeline Management Outsourcing Conclusion Glossary...8 About Technology Sales Leads Introduction The sales lead generation process for technology companies is very different from lead generation in other industries. Technology sector needs are much more precise: the target audience is much more difficult to reach; the products or services are generally complex, high-value, and high-end; and the evaluation and selection process can be quite long, taking months, if not years, to bring the target from initial contact to closing the sale. Leads in the technology sector (let s keep it as formal as possible are not discovered simply by a reference or a cold-call. Leads are nurtured from simple possible interest in services right until the final purchase decision. In traditional lead generation, the target could be anyone from a low level employee to a CEO, and you can span the entire range of B2B. In technology sales, however, the target market is almost exclusively B2B, and the target individuals are usually decision makers high up the corporate ladder. Identifying the target isn t always difficult, but reaching them can be. As a sales representative in the IT industry, you need to identify and reach the key influencers, evaluators, and recommenders, or you stand no chance of moving towards a sale. Even when you do get to speak to the key decision makers, unless you completely understand the client s internal structure and can distinguish between Line of Business (LOB) and Technical Contacts, you will not gain success. Regardless of how well you know your own products, to sell them you will need to understand the systems and processes of your potential clients. In order to accomplish this, you will need not only a broad understanding of enterprise software & enterprise technologies, but also a broad understanding of the underlying business issues and goals of your potential client. Unless you fully understand this situation, you can t fully understand how your products and services can fit their needs Technology Sales Leads. 1

3 2. Complex Sales Customer contact in complex sales usually involves a sales team instead of a solo contact. The team is functionally divided into sales, technical, operational, financial, or other specialists. In addition, many customers hire third party consultants who are paid to help evaluate goods and services. This is very common in high-tech fields that are rich with complexity and varieties of applications. Selling technology products is an involved and time-consuming process. Before you jump into a sales process, you need to determine all the key factors in the decision-making sequence. The principal factors are: Evaluators - You need to establish who the evaluator(s) of the product will be in order to pitch the performance and functionality of your product. Recommenders / Influencer You need to establish who in the target company will be involved in giving opinions to the decision maker. Usually this includes the manager of the department that will require your service/product, but there can be numerous influencers throughout an organisation, and even external to it if consultants are used. Decision Makers You need to establish who the key individuals are with the authority to decide on the final purchase. Relationships with the Recommenders, and what influence each of them has also needs to be established. Buyer s Needs - You need to understand what needs your buyer has in order to decide if your product/service is a solution to their needs. If your product is not a solution for this specific lead, then nurturing the lead is usually not worthwhile. Characteristics of the Complex Sale These and other factors have created a new and different "complex sale." This type of sale can be identified by certain characteristics. In non-complex sales, one or a few of these elements may exist; but in complex sales, they are all present. The characteristics of complex sales are: A long sales cycle A significant decision to be made in terms of dollars or strategic direction Significant resources are invested prior to making a decision on the part of both seller and buyer. Multi-level contact within the buying organization. A range of competitive strategies from which the vendor may choose to engage competitors. Buying decisions that have significant impact on the customer's business. Complex issues and solutions. Political dimensions which often supersede product and business issues. The product or service in this type of sale may or may not be complex by itself. The sale can be made complex by the environment. For instance, selling socks over the counter may be a non-complex sale. Selling socks to the US Army is an altogether different selling situation. Challenges of Complex Sales In complex sales, vendors must acquire deeper levels of understanding about the customer's business and organization in order to be successful. This is one of the reasons for the longer sales cycle. The first challenge of a complex sale is to know enough about the customer's business to determine whether the selling organization's services, products, and culture are compatible with those of the customer. The solution that the seller provides will only be as good as their ability to implement Technology Sales Leads. 2

4 Beyond just understanding the customer's business, there must be a demonstration of understanding of the inner workings, or politics, of the customer organization. Most complex sales are won or lost on the political playing field. The vendor with a viable solution, who is able to analyze the political structure and align with those who have the greatest influence on the decision, is usually the winner. Thirdly, there is a competitive dimension in complex sales. The seller must understand who their competitors are, both internally (within their own and the customer's organization) and externally (the competitors). The vendor must learn to identify the strategies that are being employed to thwart the success of their efforts. Once they have identified what these competitive strategies are, the seller must then choose the most effective strategy to overcome the competitor, while simultaneously demonstrating the most attractive solution for the customer. In complex sales, the vendor must prove their case at the operational, financial and executive level, but there is a fourth dimension affecting the decision that is not so obvious: the dimension of influence. Influence may come in the form of a person, but it may assume other forms as well. Political issues, both internal and external to the customer may influence the decision. The business environment will affect the sale, such as regulatory changes or even pending changes. Preparing For a Complex Sale There are no guarantees that having the most resources will provide the decisive competitive edge. The successful complex sale is as much a result of choosing the right strategy as it is of having the necessary resources. No one should attempt a complex sale without some formal methodology for managing the process. There must be tools and processes in place to communicate amongst the sales team, establish and record the achievement of milestones, map the political structure of the customer, and define goals and objectives. Nothing, including experience, will replace good processes when managing a complex sales campaign. The choice of competitive strategy must not be made too early in the sales campaign. The strategy decision is a function of the seller's knowledge of the situation, the customer and the competition. Timing is the critical element in implementing a strategy. Applying resources to those campaigns where there is the greatest likelihood of winning also allows the vendor to compete another day. 3. Enterprise Prospecting Methodologies Enterprise prospecting is a multi-stage process that allows a company to systematically narrow in on the correct individuals to speak to in an organisation, and subsequently discern the current or future fit for their services in the organisations they wish to prospect. Figure 1 summarizes the enterprise prospecting process. Enterprise prospecting consists of several distinct stages which, when implemented effectively, help grow basic leads into full opportunities, and allow a business to target their full sales pitch on companies with a definite need and a definite interest. This means sales time is spent closing deals, and not trying to find them. Figure 1. Enterprise Prospecting Methodologies. Stage 1 - List Development While it seems a very basic starting-point for enterprise prospecting, effective list development is often overlooked. Effective list development can be the key to the success or failure of an enterprise prospecting campaign. If you don t define the basic parameters of your target audience properly at the beginning, the rest of the prospecting process can be futile. Simply, if you are talking to the wrong customers, it doesn t matter how good your sales process is, or indeed how good your product is. Enterprise prospecting is about finding potential customers with the right budgets and/or needs that make them possible future leads. Once the criteria for the target audience is established, a list of companies that meet the basic target criteria (geography, industry, systems in use, turnover, employees, etc.) should be drawn up. This can be accomplished from existing data, internet searches, purchasing from list brokers, or utilising a professional lead generation agency Technology Sales Leads. 3

5 Stage 2 - Account Profiling From the outline list of companies developed in Stage 1, the next step is to profile the data. Even if you used current data from your own databases, the details on the lists must be re-verified to help progress the campaign as smoothly as possible. Nurturing a lead for weeks, only to find that an internal change in the company has rendered them outside your target market is an expensive mistake. Once the basic details are re-verified, the main process, major account profiling can begin. The first step in this process is to profile the companies to ascertain suitability for your company s solutions. This can vary greatly between companies, but here are a few examples: Company A is using suppliers X, Y and Z and is therefore a suitable target. Company B utilises a Unix operating system and is therefore suitable. Company C has no customer complaints department and is therefore unsuitable. After each company s information has been verified, the next step in this process is to determine the key decision makers in the target company. Key contacts may have been established as part of the list development process, but they need to be re-verified. In addition, their responsibility needs to be established. An IT Manager will not necessarily have the decision making power over IT Infrastructure projects, so may not be the key contact for your prospecting. The establishment of key individuals and their responsibilities allows prospecting efforts to be as targeted as possible, since prospecting to the wrong person is a waste of time and resources. However the key contact for a company could still be several people in the organization, depending on the project. For example, if you are prospecting for an ERP system, IT, Finance and Data managers could all be relevant key contacts. Cleaning, verification, and enhancement of your data should be done systematically, and requires the skills of an experienced operative to acquire the relevant data without falling foul of corporate data restrictions such as no name policies. In addition, the person doing this enhancement must be experienced in enterprise prospecting and sales lead generation. Although the object is to gather data, and not to speak to key individuals at this stage, invariably you do sometimes get put through to the key contact. This could be your only opportunity to speak to them, so you have to be ready to nurture the prospect as the opportunity arises. Another vital process of major account profiling is to establish internal relationships. Without knowing the internal relationships in the company, a prospector will find it difficult to target the correct areas and correct individuals at the correct times. If the IT Director reports to the Finance Director, you would target your prospecting differently than you would if the IT Director reports to the CEO. The account profiling process will leave you with a list of highly qualified leads. This will save you time by helping you avoid chasing leads that are only marginally qualified or completely unsuitable for your products. Stage 3 - Sales Lead Generation Once the major account profiling has been completed, the sales lead generation process begins. Each company must be prospected as an entity. The relationship between the key contacts in the company (who reports to whom, etc.) must be established, and the decision-making abilities of each discerned. The sales partnering relationship begins here. Get off on a good foot here, and your job later will be much simplified. Remember, not every company may be a good prospect now, but if your list development process was correctly specified, they are in your target audience, and may be a prospect in the future Technology Sales Leads. 4

6 Once the introduction of your product/service is completed, and the establishment of possible needs/requirements is completed, all leads must be classified to allow them to be tracked. You need to know what leads are ripe for your sales team to try to sell to now, which leads may be ready in a medium period (6-12 months), and which leads are possible future buyers, but with no definable time scale. Use a customer relationship management (CRM) system in some form to record all contacts with each of your leads. This will allow you to track the effectiveness of your sales process and to eliminate redundancies. Correct classification of your prospects is key. Without this, your sales team will expend efforts on what are not current possibilities, while red-hot leads in other companies may slip by. Strategic Selling is part of the overall approach, not just part of the closing. Stage 4 - Lead Nurturing Not all Leads are ready to close directly after the lead generation process. In fact, very few are. Most leads enter into the nurturing process, where you have made the client aware of your services, established a possible need, and you decide the optimum time period before follow-up contact should be made. Again, this is where the expertise of the individual is paramount. Follow-up too soon, you risk annoying the customer, and being eliminated from any future sales. Follow-up too late, and even if the decision hasn t been made, you may not be able to get your services on the table for consideration. It is a fine line, and one that is difficult to judge. However, getting it wrong at this stage costs your company medium and high-probability opportunities. 3 rd party agencies in this area can be an excellent source of expertise without the need for in-house up-skilling and the associated problems of staff-retention and skill-set acquisition. Following the four stages of enterprise prospecting will get you on the right track. However, even if you do effectively complete the list development, account profiling, sales lead generation, and lead nurturing stages, sales can still leak from the pipeline quite easily. In fact, this is the most expensive stage at which to lose a sale, as you have already invested the time and effort to develop, profile, prospect, and nurture the lead all the way to the point of sale. If you are exploring the route of enterprise prospecting, you should also ensure you reduce leaks from your sales pipeline. 4. Implementation Once you have developed a solid sales lead development strategy, the next step is to integrate your strategy into existing sales processes seamlessly and painlessly. This integration process has three steps: analyse, design, and implement. Step 1 - Analyse In order to implement a sales lead development strategy, you must first analyse your own set-up. You need to determine: Do you have a definable market for your product? Do you have the in-house skills to turn prospects in to clients? Do you have the structure in place to cope with increased sales? Do you have the ability to effectively manage your sales pipeline? Step 2 - Design Once you are sure that your organization is ready to go forward with a sales lead development process, the next step is to design that strategy. Identify the how the four stages of enterprise prospecting will fit in your sales cycle Technology Sales Leads. 5

7 Identify the individuals within your organization that will be responsible for each stage. If you decide to outsource your prospecting functions, identify the individuals within your organization that will coordinate with the 3 rd party agency, set targets, and monitor results. Train your staff in the appropriate processes and design good call scripts. Design your system to track all the data. Your system could include anything from a simple sales database to an updated CRM, depending on the scale and complexity of your organization and sales processes. Step 3 Implement Start the prospecting process slowly. There will often be problems when a new system is implemented, so launching a small-scale project to test out the systems, the staff, and the process may be a good option for your company. Begin the process by isolating an initial target group in your list development. Get your staff members involved in the account profiling process. This will give them a foundation of knowledge about potential client organizations. Assist your staff with the development of call scripts and listen to sales calls to assist your staff with situations they haven t encountered before. Continuously analyse your reasons for success and failure at each stage to optimise your process. 5. Sales Pipeline Management Often overlooked in the sales and marketing process, managing your existing sales pipeline is probably the most effective way of maximising sales. Generating sales can be a long and complicated process, so avoiding the loss of sales in your pipeline should be a top priority. In addition, managing existing sales properly is a very effective way of generating additional sales. There are many stages of a sale, and knowing what stage in the pipeline each lead is at will help you reduce sales leakage and manage sales effectively. A lead will flow through several stages in your sales pipeline: Prospecting - The lead is in the basic stage target clients are being identified. Qualification - The target client is being assessed. Needs Analysis - A detailed analysis of the client s needs is performed. Value Proposition - An initial statement is made to the client of the basic outline of the product/service and its suitability. Identify Decision Makers - Key decision makers and internal relationships in the company are identified. Perception Analysis - An in-depth analysis of the potential client, their needs, and how your product might appear to fit their needs. Proposal/Quote Full proposal submitted to the client detailing costs, suitability, ROI, etc. Negotiation/Review - Discussion of the proposal with the client and possible review of terms/prices. Closed: Won - Deal is won and contracts are signed Closed: Lost - Deal is not awarded or has been awarded to another vendor. Reasons for loss should be identified to enhance future bids There are several analysis processes that can assist you in managing your sales pipeline: Probability Analysis - A determination of the probability of the success of a bid based on all the various factors. The probability should increase as the lead progresses through the pipeline. Win / Loss Analysis - All closed leads, lost & won, should be analysed to identify the reasons for success and failure. Identification of these reasons helps firm up the future pipeline. Lead Conversion Rate Analysis - The rate at which leads become closed deals give you a good idea on how successful you are at selling your services/products. What equates to a good rate of closes will vary depending on your service/product. However, what is important is to see if your closure rate improves or worsens over time Technology Sales Leads. 6

8 6. Outsourcing If the process of implementing a full enterprise prospecting program seems too difficult for your company, it is possible that outsourcing the process might be a solution that works for you. In fact, outsourcing can provide your company with several benefits: You can add resources to your company, rather than using them up. You can create instant expertise rather than slowly building it. You don t have to build a range of core competencies within your own company. Third party agencies manage their own staff-turnover and training. You can have enterprise prospecting programs ready to go within days of decision to start. You can implement multi-lingual capabilities through a 3 rd party agency to leverage new markets. Service-level agreements mean you are guaranteed the results you pay for. You and your company can concentrate on closing sales rather than sourcing them. 3 rd Party Agencies often have other resources such as large corporate databases, direct marketing services, and website promotion/enhancement services that you can leverage and further boost your sales pipeline. While outsourcing can provide your company some valuable benefits, it is necessary to perform due diligence to ensure that you select the right 3 rd party agency for your business. Take your time to assess vendors based on your company s specific needs. Not all vendors are appropriate for your business. If you specialise in the B2B technology sector, so should your agency. An agency that sells anything from insurance products to household products will not have the full skill set to sell your products. An over-successful project can stretch company resources if you are not prepared for it. Spending money to generate leads you can t cope with is a waste of time, money, and a loss of opportunity. Even the best outsourcing company cannot help if your product and sales processes are not up-to-standard. An unsalable product will not sell no matter how good the sales lead process. Because you are not hiring in-house personnel, expertise is only available for the project you pay for. Skills stay with the agency and do not enhance your core-competencies, unless you request training as part of the contract with the agency. Outsourcing your sales lead generation to a 3 rd party agency could be an attractive option for your company, if your company is in the right position to expand and you select the right agency to match your company s needs. 7. Conclusion Sales lead generation in any sector, but especially in the IT Sector, is the critical method of driving revenue, increasing sales, and growing your company. However, the sales lead generation strategy is only as effective as the analysis, design, and implementation stages that are undertaken to put the strategy into action. If you take the time to properly analyse your own company and products/services, design a solid SLD Process, and implement it on a phased basis with on-going review, you will be on the right track. If you carefully manage the process on an ongoing basis, and ensure you have effective sales pipeline management, then you should see a significant increase in leads being nurtured and indeed closed sales. Constant review of the process is essential. A process that works today will not necessarily work in six months. The market is constantly shifting, and just as your products and services must evolve, so 2008 Technology Sales Leads. 7

9 must your sales process. You must manage all partners in the process (marketing, account profiling, etc.). If carefully managed, your sales lead generation strategy will be a key part of your recipe for success. Enterprise prospecting should be part of an overall integrated marketing/relationship marketing strategy. There are many facets to the process of driving sales. Just as direct and targeted sales lead development work can drive revenue, so can more general marketing efforts. Direct mailing, newsletters, website promotion, search engine optimisation, and, where appropriate, trade shows are all elements of the general marketing process that should also be explored to get your products and services in front of as many key decision makers as possible. 8. Glossary Complex Sales A sales process characterized by factors such as long sales cycles, multiple points of contact, potential political influences and significant investment on the part of the customer and the organization making the sale. Enterprise Prospecting A multi-stage process that allows a company to systematically narrow in on the correct individuals to speak to in an organisation, and subsequently discern the current or future fit for their services in the organisations they wish to prospect. Enterprise Technologies Software or systems that support a function over an entire company, such as accounting, commerce functions, or production scheduling. Influencers In the sales process, influencers provide input to the decision makers. Evaluators In the sales process, evaluators may be the end user of the product, and can provide input to the influencers and recommenders. Line of Business non-it business functions, such as customer service department. Recommenders In the sales process, recommenders provide input to the decision makers. Sales Leakage Losing sales from customers who are already in your sales pipeline. Technical Contacts Contacts within a target organisation who have the technical expertise required to make an informed decision, or to influence the decision. About Technology Sales Leads Technology Sales Leads is a sales lead generation company operating solely in the technology sector. TSL operate offices in Ireland and Boston, USA, and provide technology sales lead generation services worldwide. TSL offer their services in multiple languages across the entire Technology Sector. If you would like further information please contact TSL on : (Ireland) (UK) (USA) or visit ; mcradock@tslmarketing.co.uk 2008 Technology Sales Leads. 8