Build A Sales Machine

[CEOFlow] A Visual Intention For CEOFlow And More Sketches

2009-07-05T11:50:00.000-07:00

While my Sales Machine blog deals mostly with the technical and process parts of selling, my big picture/CEO-level thoughts are part of CEOFlow. This post is a reprint of the original: A Visual Intention For CEOFlow And More Sketches

A Visual Intention For CEOFlow

Do I even need to write anything to describe my intention here, in how CEOs and their people should feel about how the culture and company work? (Seriously – comment below if I do need to explain further!)

Where Outrageous Growth Comes From

It’s not from having a great product. Or perfect sales and marketing. Those, for sustained success, are necessary…but what really creates lasting, outrageous growth is customer trust, success and love: that is, customers who love your service and can’t wait to tell others about it! This is the basis for the massive success of companies like Google, Zappos, Facebook and Salesforce.com.

CEO Sweet Spot

This should be self-evident

CEO as the Pebble In The Pond

Everything begins with the CEO. Are they centered, or stressed? The thoughts, feelings and actions of the CEO (whether trusting or fearful) will ripple out through their employees and to the market…and will come back around either as increased or reduced growth:

Problem Multiplication

In command-and-control organizations that have trained employees to require approval from all managers, issues and problems multiply because so many people must touch them. The companies train people to not make decisions by requiring upper approval for everything.

In a self-managing organization, in which employees are encouraged to make (and live with) their own decisions, the problems are dealt with at the source before they ripple up the organization.

What the text says:

Command & Control: Every problem escated / Decsisions pushed up
CEOFlow: Problems solved at source / Decisions pushed down

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Why Stalled Deals Happen

2009-06-05T11:07:00.000-07:00

Recently I attended a webinar by Tom Batchelder of Perficency, the author of "Barking Up A Dead Horse" (isn't that a great title!?) on why stalled deals happen. Tom did an excellent and clear job in laying out the causes and in giving people some suggestions on what they can,or can't, do about it. While the slides here speak for themselves, I would pay special attention to slides 5 and 10-14. If the slide viewer is small, notice the "Full Screen" button in the titlebar.

Incidentally, I respect and agree with Perficency's intention for salespeople: "Get real! Be yourself to sell more". Amen! People love connecting with people, and the more authentic and open you can be about who you are, the easier you make it for the right clients to resonate with you and see they want what you have to offer, so there's no need to 'sell' anything. This especially resonates with me - my own purpose is to help people find their unique genius, their life purpose translated into meaningful and profitable work, through PebbleStorm.

Tom, thank you for sharing this with me to post. I hope this sends some excellent people you're way who need your help :)

Tom Batchelder: Why Stalled Deals Happen -

About Tom Batchelder & Perficency

Tom is the founding partner of Perficency, a national sales coaching organization with satellite offices in Indianapolis, San Francisco, San Diego and New York. Perficency specializes in helping $5-50 million technology & professional services organizations grow revenue and profitability. Blending sales strategy with an expertise in interpersonal psychology, they focus on creating healthy, scalable, sales cultures.

Tom is the author of the book, Barking Up a Dead Horse: Avoiding the wasted time and effort in business to business sales. Tom is most passionate about changing the way a new generation of professionals looks at sales.

5 Questions with Aaron Ross: How to Make $ and the Most Out of Life! (Genius.com post)

2009-05-01T18:55:00.000-07:00

I just did a blog post for Genius.com touching on making money through enjoyment, leadgen and "Seeds, Nets & Spears", ColdCalling2.com, and more...

Today I ask five questions of Aaron Ross. Aaron is an original and was one of the original sales guys at salesforce.com. While at salesforce.com, he invented
Cold Calling 2.0 for his inside sales team that sourced $100 million in recurring revenue. Aaron Ross founded PebbleStorm to help people and CEOs “make money through enjoyment.” Prior to founding PebbleStorm, Aaron Ross was an EIR (Entrepreneur-in-Residence) at Alloy Ventures, a venture capital firm with over $1 billion under management. He is an Ironman triathlete, graduate of the Boulder Outdoor Survival School, and volunteer mentor at SCORE, “Counselors to America’s Small Business.”

As usual, Aaron has his hands in a lot of things.

PT: Aaron, you’re a busy guy with a lot of eclectic interests. What’s holding your attention these days?

AR: Great question! I can see how it appears to be an eclectic mix of projects and interests: sketching/art, CEO flow, having fun with work, travel, sales consulting / creating predictable revenue, self-managing teams, the 4-hour work week… However, everything I do and even how I live is ALL a part of PebbleStorm and helping people “make money through enjoyment”.
Work doesn’t have to be hard – we just make it hard on ourselves for no good reason. My mission is to help people and organizations unlock their “Unique Genius” and help them make work fun, more profitable and deeply gratifying (an example note I received when I launched said “Thanks for making the world more of the place I want to live”.)

With the economic turmoil, you’re seeing people finally waking up after being asleep in their careers for years or decades. Many have been plodding along making money and, meanwhile, forgetting their dreams. You can stand it while you thought it’d bring security…but that ended up being illusory. I recently wrote a blog post (“Using the Economic Trouble to Your Advantage”) on how the recession will be good for us in the long-term, because it’s forcing our economy to detox of bad habits and is getting people, many of whom have been asleep at the wheel of their work lives, to finally take a hard look at what they want to do with their lives.

So what the heck does all this have to do with my work in sales and creating predictable revenue? Well, “Make money through enjoyment” includes the phrase ‘make money’, and it’s hard to enjoy what you do if your revenue or income isn’t very predictable!

PT: You have an interesting way of categorizing types of leads: “Seeds”, “Nets” and “Spears”. Can you tell us more about these differences and why these are important?

...continue on for the full post on Genius.com: 5 Questions with Aaron Ross: How to Make $ and the Most Out of Life!

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Create Predictable Pipeline By Moving Prospects Through an "Assembly Line"

2009-04-02T10:17:00.000-07:00

You can't predictably create revenue without predictable pipeline, and that requires ways to measure and track how pipeline gets created. Here's how you can do that with your sales development reps / new business people.

An effective, easy-to-use sales automation or CRM system makes it convenient now to use a simple idea, the assembly line, as a model to "manufacture new pipeline", implying a sales organization that can measurably, consistently and predictably produce new sales opportunities.

Besides a marketable product, effective message, a sales automation system, and other tidbits necessary for selling, a key piece of creating an assembly line is the "stages" or "statuses".

These stages are used by sales development reps or sales reps to organize their cold & dead accounts where they don't have current sales opportunities. They are separate and complementary to your sales process stages, because they precede the creation of a new sales opportunity.

Below is a sample of some assembly line stages you can use to track how you're moving prospects through your prospecting process. They are meant to be used in the "Accounts" tab of your SFA/CRM system, but could be adapted to your Leads tab too.

Consider this an example, and realize that you might have to customize all this for how your own particular business works:

Bin: Cold
This should be pretty self-evident, but it's accounts where you have no activity, and no real insight into whether they're a fit or not. Often this bucket consists of data you've imported from someplace like Jigsaw and unresponsive accounts.

Bin: Working
This bucket includes all the prospects that a rep is actively touching and researching. A rep has some kind of conversation going on at this account, either by email or phone. They may not be sure if the company is a good prospect yet, if there's interest, or even who the right influencers are.

The goal of a rep with an account in the "Working" status is NOT to generate a sales opportunity by any means necessary - the goal is to figure out the 'truth' of whether there is, or is not, an opportunity at this account in the next several weeks or months. If there isn't...it's better to move on than to generate a poor opportunity that will distract sales reps from 'real' ones.

"Output Bins"
Once a rep has determined whether or not there's an opportunity, they know where to file it in one of these output bins...

Nurture Bin: Active Opportunity
When a rep generates a new sales opportunity and that opportunity is still alive, use this status to remove that account from the assembly line. For sales development reps, it makes it easy to check on the accounts and opportunities they've passed to their sales rep partners, to make sure no batons got dropped (which happens more than you'd like).

Nurture Bin: Check Back Quarterly
I like status names that speak for themselves :) There's no current opportunity here, but there should be someday.

Nurture Bin: Dead Opportunity
Accounts with a dead sales opportunity are special, and deserve their own category, because they are highly likely to become customers in the future.

Avoid Bin: Current Client
Small companies may not 'get' this, but trust me - as your customer base gets bigger and the data in your SFA/CRM system gets messier, it's almost impossible to keep your sales development reps from calling on current customers. You want to make sure the team prospecting into cold accounts avoids current customers, and this is a way to help them do that.

Avoid Bin: Bad Fit
No business fit, or perhaps they're out of business. It's a waste of time to ever talk to this company.

Avoid Bin: Duplicate Account
Sometimes you don't want to delete an account or lead. By marking it duplicate, you can make sure you avoid it in the future.

Bessemer's Top 10 Laws for Being "SaaS-y"

2009-03-13T19:47:00.000-07:00

Bessemer Ventures collected a great set of learnings around what it takes to build a successful SaaS ("Software-as-a-Service") company: Bessemer's Top 10 Laws for Being "SaaS-y". It's excellent!

Your key monthly business metrics are: CMRR (Committed Monthly Recurring Revenue), Churn, and Cash flow - “Bookings” is for suckers
Customer Acquisition Cost (CAC) and Customer LifeTime Value (CLTV) are the best indicators of long term value creation
Tune before you scale: the Sales Learning Curve is even more critical for SaaS and it takes at least $300k MRR to climb it. Stop at three sales reps until at least two of them are making $100K MRR quotas
Separate your “hunters” and “farmers” and pay them all on CMRR growth [My blog post about it]
SaaS is a whole new ecosystem where traditional IT channels don’t work – Focus your business development efforts on business services channels, but you will need to sell directly for a long time as these new set of partners are not easy to ramp-up
By definition, your sales prospects are online - Savvy online marketing is a core competence (sometimes the only one) of every successful SaaS business
Stay local - Prove your business in North America first. Only after reaching $1M in CMRR should you consider hiring European sales and services execs behind customer demand. Save Asia for post-IPO
Single instance, multi-tenant, single datacenter - Have only one version of the code in production. Really. “Just say no” to on-premise deployments
The most important part of Software-as-a-Service isn’t “Software” it’s “Service”!
Be prepared to cross the desert - SaaS requires R&D and sales expense up front for a multi-year stream of revenue, so it demands enough investment capital to fund 4+ years of runway. Load up for the long trip and pace your consumption of calories!

BONUS LAW: You can ignore one of these, but not more than two. Great companies innovate, but pick your battles!
Click here to see the slideshow of the Bessemer 10 Laws for Being "SaaS-y"

Thank you Bessemer!

DataSalad: "Fresh B2B Marketing Data"

2009-03-09T20:03:00.000-07:00

Last year, Brian Mackley of Tech Advocacy and I started a business called DataSalad, to offer marketing lists based around the user and customer lists of vendors (such as lists of salesforce.com or NetSuite customers).

We created DataSalad because we were sick of all the "junky" lists and data sources out there. DataSalad creates databases of contacts and companies through primary data-gathering and research, and guarantees them. Like organic food, which costs a little more but is worth it, we build quality lists, not quantity lists, that deliver more bang for your buck.

So many companies now want to sell add-ons to platforms (again, like salesforce.com or NetSuite), but can't find decent customer lists. DataSalad helps solve that issue: want a list of salesforce.com customers? SAP customers? NetSuite? Yep, DataSalad can help. We also have a list of best sellers.

Where the lists and data come from

The lists are generated through crawling through/integrating to 36+ different sources of online information and databases, such as job boards and discussion groups. The data is constantly being cleaned, refreshed, renewed. Different means are used to verify the integrity of both the algorithms and data.

Guarantee

Of course no data service can be perfect - typically the contacts are 80-85% percent accurate. However, we offer a 100% guarantee with all contacts and replace any bounced emails within 30 days. We either correct the email of add a new contact and email. Over the last two years the highest bounce rate we have ever seen was once a 27% bounce rate.

Where to find out more

Find out more at DataSalad or just Contact DataSalad

[CEOFlow] CEO meeting in westside Los Angeles (Santa Monica), March 13th

2009-03-02T09:32:00.000-08:00

Eric Golden (CEO of Equipois) & I (Aaron Ross bio) are organizing a formal, facilitated CEO group here on the westside that will meet monthly. The group will help CEOs support each other in navigating through and prospering from the economic turmoil, focusing on topics such as creating predictable revenue, and working with investors and customers in the new climate.

The CEO group is afilliated with Nitro.la and CEOFlow:
Nitro.la, in partnership with USC, UCLA and Caltech, is a non-profit mentoring network created to help develop LA’s entrepreneurial community by “getting more companies funded in greater Los Angeles”. Nitro has extremely close ties to USC & UCLA’s business schools. CEOFlow helps CEOs understand how to create predictable revenue, through guidance, groups and consulting.

Who this is for:
This is for CEOs of companies that have either raised $1m+ in capital or have $1m+ in revenues. We intend the group to be mostly CEOs of B2B companies and companies with some direct sales...continue for full post

[CEOFlow] New sketch: "Revenue, Space & Enjoyment"

2009-02-16T08:18:00.000-08:00

As I wrote about in My original notes on frustrations with the way work, uh, works, PebbleStorm: CEOFlow is like "advanced PebbleStorm". I've been playing with my CEOFlow circles for awhile, and finally this morning they really clicked:

My sales advisory/consulting service: www.CEOFlow.com/services

Subscribe to CEOFlow by Email

Phone Works 2008 Inside Sales Compensation Report

2009-02-01T11:43:00.000-08:00

Ah, fun with compensation :) PhoneWorks just published another sales comp report worth checking out. Here's their introduction and a link to the full online report:

A question on everyone’s mind these days is, “How is the slow economy affecting sales compensation and quotas?”. We set out to answer this question. As we do every year in the fourth quarter, Phone Works conducted an online compensation survey of inside sales professionals working in business-to-business technology companies. The majority of these businesses are based in the San Francisco Bay Area.

...Read full Phone Works 2008 Inside Sales Compensation Report

Marketo interview: "Sales Lead Management: Thought Leadership with Aaron Ross"

2009-01-09T13:21:00.000-08:00

I've always really liked the team over at Marketo, which offers lead management software for email marketing, lead nurturing, lead scoring, sales lead insight, and closed-loop reporting. Jon Miller has a popular and excellent blog, "Modern B2B Marketing".

They just published an interview with me...

The next interview in the B2B Marketing thought leader interview series is with Aaron Ross, formerly with salesforce.com and founder of PebbleStorm:CEOFlow. I've long been a fan of his blog Build a Sales Machine and I learn something new every time we interact.

1. Tell us a little bit about how you got into marketing, and what you like most about it.

Getting into lead generation was an accident. Back in 1999-2001, I was CEO of an internet company. I had more ego than understanding about lead generation and professional selling. After that experience, I decided I needed to learn how to build and manage a killer sales organization. Where better to learn that than doing sales at salesforce.com? I had no professional sales experience (raising venture capital doesn't count), and the only opening they had for me at the time was answering the 800#. So, I started literally at the bottom, responding to inbound website and 800# leads. That started my journey into lead generation, marketing & sales. It's funny how life takes you places you never expected to go!...

Full interview "Sales Lead Management: Thought Leadership with Aaron Ross"

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My new monthly sales advisory service to help CEOs and organizations create predictable revenue: www.CEOFlow.com/services

[CEOFlow] Use "Layers of the Onion" to sell for you

2008-12-23T15:12:00.000-08:00

Spend any time with me talking about lead generation or sales, and the term "layers of the onion" or "onion layers" will come up - a lot. I've found that this concept is a great analogy to help teams think through laying out their products and offers. The goal is to make it easier for prospects to "choose their own adventure" in how they get to know a company and its products, step-by-step...

Continued on www.CEOFlow.com: Use "Layers of the Onion" to sell for you

The Fatal Mistake Boards & VP Sales Will Make In 2009 Planning

2008-12-08T20:39:00.000-08:00

Note: I first published this post exactly one year ago. Unfortunately it bears reposting again before 2009. I have a feeling this same post will be relevant for another few years until the conventional wisdom evolves. Also, I've published an overview of my new Sales Advisory Program at www.CEOFlow.com/services.

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For companies selling products worth less than $100,000-$250,000, the old school strategy of hiring more feet-on-the-street to drive revenue growth is failing more often. Or just fails.

Let's take companies in fast-growth periods who are focused mainly on adding new customers (rather than more mature companies who drive much of their growth through their customer base).

The problem: the old bedrock sales principles that usually worked now doesn't..."if I need to double revenue growth, I need to double my sales force to drive it."

Wrong.

Salespeople do not cause customer acquisition growth, they fulfill it.

Before you rush on to the next section, really consider that. It's a HUGE shift in traditional sales thinking. I'm talking about root cause drivers, not correlations. Of course you need more salespeople if you're getting bigger, but they aren't what is causing new customer growth.

Lead generation causes new customer acquisition and sales fulfills it. I see a future in which sales is more and more like account management, and the focus of new customer acquisition responsibility growth falls more squarely on lead generation executives (VP Demandgen/Leadgen and VP Sales Development).

OK, the Sales 1.0 thinkers out there are saying "You're crazy. I'm hiring salespeople and they're adding new revenue. And it's worked for me for 15 years. Without great salespeople, we wouldn't be closing these customers. Our 9-stage sales process is really cool too."

Right. That did work in the past. Things change.

Here's another way to think about it by comparing two competitors.

Competitor A:
* Trying to double from $10m in revenue to $20m.
* 10 salespeople today, growing to 20 in '08.
* Generating $3m per month in new pipeline through proven campaigns in leadgen and marketing (40% of pipeline), a cold calling 2.0 team (40% of pipeline), partners (20% of pipeline).
* Their salesperson ramp-time is 4 months (because they create pipeline for the rep to walk into).

Competitor B:
* Trying to double from $10m in revenue to $20m.
* 10 salespeople today, growing to 20 in '08.
* Competitor B spends money on marketing, and salespeople cold call, but no one really tracks pipeline metrics. But the VP Sales and the salespeople have had a knack for hitting their numbers each month so far with some scrambling.
* They think their new salesperson ramp-time is 6 months (but really will end up at 9-15 months...if their salespeople ramp at all).

Who would you bet on?

Here's the '09 scenario I personally see playing out for too many companies:
1. Board/CEO sets an aggressive 2009 revenue target (mostly based from new customer acquisition)
2. VP Sales/CEO divides revenue goal by expected quota to determine the number of salespeople needed to hit the target
3. Sales reps miss targets after ramping MUCH more slowly than planned
4. Everyone has an extra helping of pain and a side of stress for Thanksgiving next year (if the VP Sales is still around)

Here is the root assumption that causes 'VP Sales roadkill' (although the board and CEO are equally responsible): Their false assumption that salespeople will find new business on their own.

No they won't. Not enough to feed themselves.

(Ok, SOMETIMES, SOME salespeople can. Some people win the lottery too.)

Here's why:
1. Salespeople are terrible at prospecting
2. Salespeople hate to prospect
3. Even if a salesperson does do some prospecting successfully, as soon as they generate some pipeline, they become too busy to prospect. It's not sustainable.

Unless all I'm selling is big deals (>$250k), or in industries that truly are relationship-based (like the ad agency world)...there's no way in hell I'm rolling the dice on my company based on this assumption.

How boards & CEOs exacerbate the problem
As soon as a product is ready for market and there's some initial customer traction, the board and CEO tend to rush to set 100%+ growth targets. They arbitrarily pick goals (since there's no data to base predictions on!) and turn the screws on the VP Sales. The VP Sales sucks it up (especially when he had no voice in the goals) and gets busy hiring salespeople...who miss plan. Company misses targets. Executive team is refreshed.

Why is it easier for people and companies to do more of what doesn't work than to take some time to figure out what does? By Q2, when the sales people aren't making their 2009 numbers, there will be the push (from the board, CEO or VP Sales themselves) to hire more! "We're behind on our goals, we need to hire more salespeople!" How does that make sense?!

I think people, when under too much pressure or stress, tend to retreat to the safe place of what they know rather than taking the risk of trying new things. It's safe, it's less scary than what's unknown. It doesn't make logical sense; it must come from the reptile part of the brain.

Some answers, kind of
Unfortunately, there aren't any quick fixes to this lead generation problem today. In fact, if you don't have any repeatable leadgen programs yet, you're already behind in getting ready for '08. Despite your investors' demands, it takes 12-18 months to get leadgen cranking. What can work is a mix of, for example:

Trial-and-error in lead generation (requires patience, experimentation, money)
Patience in building great word-of-mouth (the highest value leadgen source, but hardest to influence)
Cold Calling 2.0 (by far the most predictable source of pipeline, but it takes time and focus)
Building an excited partner ecosystem (very high value, very long time-to-results)
PR (great if you're great at getting it!)

Start with more awareness on how much pipeline you're generating
Not sure what works today, or where to start? Begin with awareness.
* Does your executive team and board know how much new pipeline the company needs to generate per month?
* Is that tracked at the board level? (At least while customer acquisition is a primary focus.)

Email me with your rants, or comment here
Are you skeptical of this? I could use some good email or comment threads to flesh out the ideas and issues around this. Email me at aaron at pebblestorm dot com.

ConnectAndSell: 100x ROI in generating pipeline!?

2008-10-10T10:30:00.000-07:00

Very rarely am I blown away by a new sales or marketing product - and ConnectAndSell blew me away, both with the product itself and the fact that customers have been able to generate $100 in pipeline per $1 invested in ConnectAndSell. I was excited enough to personally invest in the company and join their advisory board.

Their pitch:

"Call a prospect, and what do you get? Voicemail, most of the time. Email a customer to schedule an appointment, and you end up playing tag before agreeing on a time to talk.

The Connector is a tool that makes a sales rep 8x more productive in getting decision makers on the phone – so they talk to as many decision makers in one hour as they would reach in an entire day of manual dialing."

What? That sounds impossible. How can do they do that?

"The way it works is simple: Your rep sets aside a one-hour time period to call prospects, signs into ConnectAndSell, uploads the call list to use, and tells the system "I'm ready." A group of ConnectAndSell reps immediately starts making calls. Within two-tenths of a second from the time the first one reaches a live person on the list, the call is transferred to your rep. The contact information for the person being called pops up simultaneously on the rep's PC, and the dialogue can start immediately."

"How it works"

ConnectAndSell - How It Works - Get more Business Documents

What about that telling 'click'? Or is there a delay? Don't the prospects know that your rep isn't the one dialing the number?

"The transfer is so quick (and with no click!) that the prospect the rep is calling -- well, the prospect who was called for the rep -- had no idea that your rep wasn't the one who initiated the call."

[Aaron: I can personally vouch for this. As part of a test, they called me with their system. I had no idea I was part of a longer list that was called this way. It was amazingly seamless.]

Can you share some examples of how customers actually use it?

1) Your ridiculously long list of follow-ups: Spend an hour each week on ConnectAndSell working through your followups. At 10 connects per hour, you'll work through the list in very little time.

2) Inside Sales – Growing Lead Volumes or Trade Show Responses: Instead of hiring additional Market Response Sales Reps to work through growing lead volumes or spikes in leads, invest in ConnectAndSell and make your best reps more productive.

3) Networking: Put all of your Outlook Contacts into the ConnectAndSell system and spend 1-2 hours one morning each week reconnecting with people in your network.

How does ConnectAndSell charge? What about the ROI?

We charge $275 per hour of usage. The ROI is straightforward. A typical rep can only reach a limited number of decision makers on the phone per week. The rep won't be able to increase that number simply because they don't have time to get more people on the phone and keep up with the rest of their work. However, ConnectAndSell's technology changes that equation. One hour on the Connector is the equivalent of an entire day of manual dialing. So the Connector can double the number of decision makers a sales rep speaks to at only 10%-20% of the cost of the rep.

Here are two recent documented examples:

Airwave Wireless -
- In about 35 hours of usage they achieved an average of 10 connects per hour per sales person
- 9% of the connects became opportunities
- An investment of under $10,000 resulted in over $1,000,000 in pipeline. So $1 invested in ConnectAndSell generated $100 in pipeline.

SendMail
- 22 hours of ConnectAndSell generated 275 connects - more than 10 connects per hour
- 15% of connects resulted in qualified opportunities
- $6,000 investment yielded over $1,000,000 in pipeline. So $1 invested in ConnectAndSell generated $165 in pipeline.

How can people learn more or contact you?

Please visit http://connectandsell.com/contact or contact sales@connectandsell.com

Final Note...

If you have any questions you'd like to ask me, post them in the comments here or email me at aaron (at) pebblestorm (dot) com.

How to Generate a Steady Flow of Inbound Sales Leads

2008-09-27T12:52:00.000-07:00

Aaron recently wrote a great post comparing the differences between inbound leads and outbound leads and how they should be treated differently during the sales process. In summary, he states that inbound leads:

close at a higher percentage
close quicker
close without as much sales effort

I linked to the post from an article I wrote on the HubSpot blog because I thought it was great. Then, a client of mine, Trish Bertuzzi (Inside Sales Blog), followed the link and plugged HubSpot in Aaron’s comments.

Also, I am not sure I agree with your premise of not being able to predict inbound activity. And, let me say that up until recently, I would have agreed with you. But, we now have proven internet marketing methodologies and technologies available to us that do create repeatable and scalable results. I highly recommend http://www.hubspot.com to anyone interested in learning more and btw, ask for Pete Caputa.

Fortunately, Aaron was familiar with us enough to know the plug was unprompted but accurate. So, he invited me to write a guest post for his blog about how to predictably generate a steady flow of inbound leads.

Although I agree with Aaron’s statement about how inbound leads close at a higher percentage, quicker and with less effort, all inbound leads are not created equally. They don’t all close at the same rate.

I also agree with Trish, that inbound marketing can produce a steady flow of inbound leads.

As a sales person at Hubspot, I have contacted several thousand “inbound leads” since I joined HubSpot. As an experienced internet marketer, blogger and social media junkie, I’ve also contributed to our SEO efforts, blogging and social media marketing activity - helping to generate leads for the company and myself.

At HubSpot, we help companies attract more traffic and convert more site visitors into leads by providing the training and tools that are needed.
We provide tools and training so that in-house marketing professionals and small business owners can leverage SEO, PPC advertising, blogging, the blogosphere and the social mediasphere to attract more traffic.

We’re our best customer and we don’t share clients’ data (unless we have permission). So it’s best if I talk about how we’ve been able
to generate a steady flow of leads for our business. Here’s a screen capture of our traffic and lead stats in the last few months.

Our inbound lead generation correlates closely to our internet marketing efforts. It’s pretty predictable. Mike Volpe, our marketing VP has levers that enable us to control how many leads we generate how quickly, as well as the quality of those leads. We can control quantity much more easily than we can control quality. However, we’re getting much better at doing “targeted” inbound marketing which enables us to attract highly qualified prospects to our sites.

The First Step is Measurement. Measure. Measure. Measure. Measure ROI. ROI. ROI. ROI.
Our marketing analytics enables us to do closed loop marketing, where we can identify exactly what keywords, referrers and marketing campaigns help generate leads and new clients. By analyzing our analytics we can see exactly how customers first arrived at our website. We can also see what marketing activities helped nurture a lead along the process. We build a website interaction profile of leads after their first conversion. We can see what forms a prospect has completed, what pages they’ve visited, how frequently they visit, which blog posts they read and comment on and a few other metrics, which help us determine how engaged a prospect is, as well as their interests and needs. This lead intelligence helps us prioritize who to call first, as well as how to initiate a conversation. For example, If I see that a prospect has read a bunch of posts about SEO, visited the description of our keyword research and link tracking tools, I’d peak at their site to see if they’ve done any SEO and probably start the conversation with a question like, “It looks like you’re trying to refine your SEO strategy?”

Based on all of this data and my anecdotal experience, I can safely say that all inbound leads are not created equal. They don’t all close at a higher rate, quicker and with less effort than outbound leads. I’ve had several inbound leads that closed 3-6 months later, even though the investment required for our services is only $3,500 for the year. On the flip side, I’ve also had some close after a 15 minute conversation, since they already self-diagnosed their problems, knew that we could help them and knew that they wanted our help - all because our marketing team nurtured the lead effectively. No matter what the leads, I still have to do the work required to establish my prospects’ needs, urgency and timing.

Regardless, as someone who has had to [literally] knock on doors to prospect when I started my first business, I know that logging into Salesforce.com and having a bunch of warm leads to call is much more efficient than cold calling and much less expensive than traditional marketing and advertising. Inbound marketing sets any salesperson up for a higher success rate. And sets marketing up to establish a true ROI for their time and dollars spent.

What Inbound Marketing Methods Work?

In order of its ability to generate more easily close-able leads, I’d rank each activity in the following order.

Referrals & Brand Searches
Free Tools/Free Trials
Organic Search Engine Optimization
Blogging
Email Newsletters
Webinars
PPC
Sponsorships
Social Media

However, it’s also hard to separate any of these activities from each other. Collectively, they create a comprehensive inbound internet marketing strategy. Also, pretty much everyone of these methods is responsible for doing two important things in inbound marketing.

They attract new prospects.
They help nurture existing leads.

Traditional marketing can do the former. But, prospects generated from traditional interruptive marketing do not lend themselves as well to lead nurturing.

Here’s some experiences from each of these methods. If I were a marketing or sales VP or a small business owner starting inbound marketing, I wouldn’t leave any of these out. But, here’s the areas where I’d focus first. This stuff doesn’t happen overnight. Most of these techniques require a time investment, but little financial investment. Many of these things support each other. So, it’s important to do things in the proper order and to prioritize.

Referrals & Brand Searches - Your best marketing is happy customers. In my previous company, after a few years of working at it, 100% of my business came from referrals. Customers have the ability to sell your services for you because they have little to no selfish interest in you bringing on new clients. So, when they recommend your product or service to a peer, they’re not only establishing that you’re credible, but trustworthy. The trust implicit in their relationship with the prospect they’re referring is transferred to you.

There’s an old saying that says it’s hard to predict referrals. It’s also expensive to build a brand (although fairly easy to measure brand awareness). However, I’d argue that if you’re doing the right things for your clients and you’re truly a stand for their success, it will happen. On the web, you can accelerate the pace by entering the conversation, setting the precedent for receiving referrals by giving them and by generally making yourself available to speak with new people whether there’s an immediate direct connection between their need and your service or not. Practically speaking, I recommend starting a blog and reading these tips on using a blog to improve your sales process and how to use LinkedIn to drive traffic to your website.

Free Tools/Trials: Like many other companies, HubSpot has put the Freemium model to effective use. WebsiteGrader.com is a free SEO and website analysis tool that lets anyone analyze the effectiveness of their site and online marketing vs a handful of competitors. Almost 400k people have used it. We don’t call these people directly, but Website Grader refers about 15% of our traffic to HubSpot and is responsible for a disproportionately larger percentage of leads and sales that result from our inbound marketing. HubSpot recently launched Press Release Grader too which analyzes the online marketing effectiveness of press releases. Press Release Grader also helps us target marketing professionals more effectively, helping us target our inbound marketing to the right prospects for us.

Also, I recently learned of Landslide’s sales work management tool that helps organizations design a sales process for free. Constant Contact’s email marketing software free trial is a great example of effectively using a free trial. If there’s a way to take a part of your service that is useful by itself and make it free, this will generate more leads, good will and inbound links than you can imagine.

Organic Search Engine Optimization: This one takes the most patience, but if it is done right, it is simply a byproduct of doing everything else right. SEO requires thorough keyword research and search engine rank monitoring. If you do this well, blogging, PR and social media can support your SEO efforts without an expensive SEO consultant, and without a lot of work dedicated “just” to SEO. The name of the game is to pick keywords, optimize pages with those keywords (could be blog posts) and build links. At HubSpot and many of our other clients that follow the right internet marketing strategy, the effect of SEO on inbound lead generation is cumulative and compounding. In other words, month after month, as long as we keep creating great content and building smart links, the number of leads we generate from SEO goes up and and up and up.

Blogging: You must enter the conversation if you’re going to do inbound marketing. There are so many people who start a blog and think it’s just about saying smart things or about writing. It’s not. It’s about having a 2 way conversation. Any good salesperson knows that an effective prospecting call requires the prospect to be talking more than the salesperson. It’s the same way with a blog. It’s imperative to be a resource for people and to pro-actively network with your blog by reading other blogs, linking to other blogs and leaving comments on other blogs, if you want people to do the same thing for you. It’s not necessarily the law of reciprocity, but it’s the law of participation.

For the 6 or so years I’ve been blogging, I’ve followed “the build it one at a time” model where I try to make acquaintances with a new blogger each week. Now that I help companies start blogs, things are a bit more accelerated for me. I make a lot of new blogger friends each month. But, I counsel my clients to do the same thing. At some point in the lifetime of a blog, after a critical audience is built, things steamroll. Subscribers come out of nowhere, links come from nowhere, random people digg your blog posts and send a flood of traffic. After a while, you can just focus on creating great content and hosting a great conversation on your blog. But, I’d recommend always reaching out. Last week, I reached out to Guy Kawasaki and he launched sales.alltop.com with my blog on it! Just like I wouldn’t stop my consistent telephone prospecting activities, I’ll never stop reaching out to new bloggers.

Email: Permission Based direct email marketing is still a very important marketing technique. It’s critical to use industry standard opt-in methods to build your list. However, notice that I put it fairly low on this list. If this article was written just two years ago, I’d bet that email marketing would be much higher on the list. Of course, it’s one of the oldest forms of online marketing. Successful marketers were using email before the first blog post was written and back when search engine indexes were still built by humans. But, there’s a problem with email. People get too much of it. They are increasingly immune to stuff that doesn’t interest them right now. I’ve had people double opt-in to an email newsletter and then click “this is spam” two weeks later after receiving just two messages from me.

All that said, email is still an important part of the mix. At HubSpot, we send out one email newsletter per month promoting our webinar and a few recent blog posts. It drives significant traffic back to our site and drives attendance for our webinars, which is a great lead nurturing tool.
Solutions like Eloqua, Pardot and other marketing automation tools help with this at a different level. However, most businesses that I speak with don’t generate enough inbound leads to warrant an expensive email-based lead nurturing process. Most don’t have enough leads to nurture yet. I usually recommend Aweber and Constant Contact for most situations. They’re inexpensive, simple to setup and effective if used right. Also, since I’ve seen that blogging, free tools, and webinars can nurture leads just as effectively, all you need your email system to do is get them to come back to your site where you can track engagement.

Our sales team also uses one on one email to nurture leads inside Salesforce.com. Based on a prospect’s interaction with the site and the information they share when downloading white papers and registering for webinars, we can provide the information they need to decide whether they want a custom product demonstration or to decide whether they want us to help them diagnose their challenges and recommend a solution.

I’d also recommend reading Brian Carrol’s Start with a Lead Blog. His company, Intouch is an expert at using email and presales touches to qualify leads for Budget, Authority, Need and Timing (B.A.N.T) before moving a prospect along to a sales team.

Webinars: As I mentioned above when talking about our email marketing process, webinars are a great lead nurturing tool. People that have opted in to our email list are engaged at different levels. Webinars get them coming back and interacting with us. It also helps us establish credibility and communicate what we do in an educational and neutral setting. Mike Volpe has discovered that a series of webinars is much more effective. Normally, many people tell their contacts internally and externally about a webinar in a series, assuming they’ve attended one they got value out of previously. I recently had 50 influencers from one company attend a webinar. We usually also have a bunch of bloggers post the link to our marketing webinars page; Webinars create a great word of mouth opportunity.

PPC - In a good inbound marketing mix, you can’t ignore Pay Per Click Advertising. Many b2b companies of any size seem to be doing exclusively PPC as their sole online marketing activity. In my experience, leads that come from PPC are a bit less likely to convert. They aren’t engaged with your brand as they usually arrive at a landing page and leave right afterwards, and they rarely seem to come back. Of course, I haven’t done a scientific analysis. But, there have been studies conducted that show that less educated people click on ppc ads, while more educated people click on organic search results. Unless your selling to dummies, you’ll be better served with SEO and blogging. However, we have used PPC ads in certain cases successfully, when other methods will not work in the time frame that we want. We’ve used it to test new landing pages to ensure that they convert. We’ve also used it when we needed a larger amount of leads for our salespoeple to work; Every other month, we hire a few new sales people. We spend a bit more on PPC ads in those months.

PPC is an easily controlled lever. You want 25 leads today, give me $1,000 bucks and I’ll make it happen.

Sponsorships - If you’re at a phase of maturity in your marketing where you know what the ideal profile of a prospect is, it’s usually pretty easy to identify publications (ie forums, blogs, trade magazines, email lists, vertical search engines) that can target your prospect. I wouldn’t recommend buying lists. However, if you can place an offer on a targeted site or an email newsletter, the results can be very effective. Most inbound marketing activities don’t make it easy for you to target a demographic profile. Sponsorship does. Of course, these people aren’t going to be as engaged with your brand. But, sponsorship is certainly a good part of a solid inbound marketing mix. Sponsorships can be expensive, so be careful committing to a long term engagement with an unproven media outlet.

Social Media - Ironically, I give seminars all the time about sales lead generation via online networking and social media. Yet, I put this one last. I haven’t really figured out how to “scale” my online networking activities by itself. Online networking, social media and social bookmarking sites are great tools to support blog readership growth and to support search engine rankings. But, I’ve found that the ROI from social media isn’t cumulative or compounding used in isolation - unless you’re already pretty famous like Seth Godin or Guy Kawasaki. I do think it’s a very important part of an inbound marketing mix as it adds a human face to your company. However, it does not drive a lot of direct traffic that converts into leads.

It can also be extremely powerful if a sales and marketing team coordinates some social media marketing activities and leverages the distributed team’s personal networks to launch a product, get feedback and raise awareness about a campaign. Sites like LinkedIn and Twitter also make it a bit easier to initially connect with a prospect or lead who seems immune to voicemails and emails. But, I’d never recommend skipping right to social media without a comprehensive SEO and blogging strategy first.

Summary: In conclusion, I’d refute Aaron’s original assumption that inbound marketing is unpredictable. With the right internet marketing tools in place, and the right internet marketing training, we’ve demonstrated over and over again that it can be predictable. I’m hopeful that the experiences and lessons I’ve shared above can help you start implementing an inbound marketing strategy for your business that produces a steady flow of inbound sales leads. I think the world would be a lot better place if we were all interrupted less often by poorly timed marketing messages and sales pitches - and if we could find what we were looking for more easily when we want it.

And I wouldn’t be practicing what I preach if I didn’t say… I’m here to help if you need me. If there’s anything I can help you with, please connect with me on LinkedIn.

About the Guest Author: Peter Caputa IV is an Internet Marketing Advisor (ie sales) at HubSpot, an inbound internet marketing platform. HubSpot provides the tools and training which enables businesses to take control of their website and online marketing - making their website a lead generation and profit producing asset for the business. Peter also operates several projects of his own, including his own blog and website about sales lead generation where he advises and supports his clients online marketing efforts, and an online business rating and networking website, Hive411. He also contributes to the HubSpot group internet marketing blog.

CNN Money & Fortune articles..."Why to be wary of commission-only sales staff"

2008-09-23T13:20:00.000-07:00

CNN Money/Fortune interviewed me a few months ago, and some quotes turned up in a couple of their articles worth sharing:

1) Fortune Small Business article: "Why to be wary of commission-only sales staff"

"Hiring a salesperson on commission sounds like a cost-saver, but investing in your staff usually pays off in the long run. "

2) CNN Money article on "Hire picture-perfect employees"

"We answer three questions about how to find and keep your company's most important asset: its workers. Plus: Advice on how to conduct a solid interview"

(I know it says "Aaron Ross of BlackBox Revenue"...the BlackBox sales productivity/consulting work was folded into CEOFlow)

9 Principles of Building a Sales Machine

2008-09-11T20:06:00.000-07:00

I love getting and answering questions, as it helps shape my thoughts into useful forms to share. Here's a recent answer I posted on ExpertCEO (a private online community for CEOs), to a question that was along the lines of...

"Do you have any advice for a company with a strong services practice that has sold mostly through partners in the past, but who is now looking to build their own Sales Machine? Any advice would much appreciated."

That's a pretty broad question, so here's a broad answer. principles I feel would help anyone get going in the right direction:

1) Be PATIENT. Developing a sales engine that predictably generates revenue can take 12-24+ months, depending on the state of your company. Even any one new program in b2b sales can take 3-6 months to be defined, show measured progress, and become integrated & habitual (i.e. machine-like).

2) Experiment. With everything. Constantly.

3) No one-offs! (Unless it's an experiment to learn something for the future). It's not worth doing if it's not repeatable. One-off efforts, even for a quick payoff, are a distraction from focusing your energy on sustainable efforts.

4) If it doesn't exist in your CRM system, it doesn't exist. (Sales)people must be comp'd only off data in the CRM system. Reports must be run totally in salesforce.com/CRM, whenever possible. Etc. [Update: thank you Ken Rudin of for the comment below, I agree the data just needs to be in a system and accessible. I should have said here that reports must not be in Excel whenever possible!]

5) Can you sketch out how things work on a flow chart? Even simply, on paper or a whiteboard? If not, that's a problem. What's the desired outcome, and process that leads to that outcome? Is it being done ad-hoc today? Sketching it out is the first step to bringing some order to the process...and thus outcome.

6) Focus on results rather than activity (ex: number of qualified opportunities created per month is much more meaningful than number of sales calls made)

7) Track fewer, more important metrics. It's easy to go way overboard in building reports and dashboards. Work with your team to prioritize metrics. Think in handfuls, not dozens.

8) Special attention on batons that cross functions. Whenever a process crosses teams (marketing to sales, or sales to professional services, or...), a baton is passed, and you have all the ripest conditions for problems.

9) Babysteps! Consistently try lots of little improvements. If you keep at them, they'll add up to big changes over time. (Remember the patience part?)

Additional posts
A few other blog posts that help illustrate the kind of thinking it takes to build a sales machine:

The Problems with "Lumping"; Separate the Four Core Sales Functions

2008-09-06T20:01:00.000-07:00

This post builds off a prior one, “We have a different sales structure here, the sales people just sell!”

Building a highly productive, modern sales organization requires increasing specialization - and frankly, it's a big reason salesforce.com has such an amazing sales organization. Though they take it to the extremes - you wouldn't believe the number of different kinds of sales groups, inside and out, that salesforce.com has :)

One of the biggest sources of lost productivity is the practice of lumping a mix of different responsibilities (such as raw web lead qualification, cold prospecting, closing, account management...) into one general "sales" role.

Issues contributed to by lumping

Lack of focus: Salespeople juggle too many responsibilities, reducing their ability to get things done. Salespeople have a reputation for being ADD - how does adding more responsibilities help that? For example, qualifying web leads is a much lower value distraction for salespeople from managing current clients. And managing a large current client base is a distraction from closing new clients!
Talent development: It's challenging to bring in raw talent and develop them with a progressive career path. This is unfortunate, because homegrown talent usually ends up being the best! (also see "Where do I hire great salespeople?")
Metrics: It's harder to break out and keep track key metrics (inbound leads, qualification and conversion rates, customer success rates...)
Problem-solving: When things aren't working, lumped responsibilities obscure what's happening and make it more difficult to isolate and fix issues with accountable follow through.

The four core functions / themes

Here are four basic themes (I say 'theme' because even each of these functions can be sub-divided even further as your organization gets bigger):

"Inbound" Lead Qualification: Commonly called Market Response Reps, they qualify marketing leads coming inbound through the website or 800#. The sources of these leads are either marketing programs/SEO or organic word-of-mouth. Presentation: Inbound Lead Management Best Practices
"Outbound" Prospecting/Cold Calling 2.0: Commonly called Sales Development Reps or New Business Development Reps, they prospect into lists of target accounts to develop incremental new sales opportunities that don't already exist, that require a lot of proactive work. These outbound reps qualify their new sales opportunities and then pass them to Account Executives to close. Presentation: Introduction to Cold Calling 2.0
Account Executives: Quota-carrying closers, either inside or in the field. As a best practice, even when a company has an Account Management/Customer Success function, Account Executives should stay engaged with a new customer past the close and until they are deployed/launched. Also see "Sell To Success (The All-Natural Close)"
Account Management / Customer Success: client deployment and success, ongoing client management and renewals. In today's world of frictionless karma, someone needs to be dedicated to making customers successful - and that is NOT the salesperson!

When to specialize?

I frequently hear "we're too small to specialize yet". Every company is so different, it's tough to generalize. One rule of thumb is: "sooner than you think"...even if you just have a handful of Account Executives. A second rule of thumb I like is the 80/20 rule - when your reps, as a group, are spending more than 20% of their time on a non-core function (web lead qualification, cold account prospecting, account management), break out that function into a new role. Yes, I said 20%!

Here are a couple examples. Regardless of how many Account Executives (AEs) you have, if you're getting a couple of hundred inbound leads per month you should have or planning to have an inside Market Response Rep qualifying them for the AEs. Or if you already have 3-4 AEs, rather than making your next hire another AE, consider an outbound Sales Development rep who can spend 100% of their time working to feed the AEs.

Questions? I'll answer in the comments

This is really just a first introduction to the topic - we could drill ad naseum into the mechanics, metrics, comp, career paths... (as I said, nauseum) of the different groups and how the relate to each other. If you have specific questions, post them in the comments and I'll do my best to answer them.

Puzzle pieces

Finally, as with every other idea in this blog... take this with a grain of salt. You'll have to pick and choose which puzzle pieces here are right for you, and how they fit into your business. My rule of thumb from experience is the 80/20 rule: 80% of the puzzle pieces here can should be plugged into your business, and 20% shouldn't or should be heavily customized.

“We have a different sales structure here, the sales people just sell!”

2008-08-13T19:56:00.000-07:00

Over the past few months, I've spent quite a bit of time in Los Angeles at Leads360 (CEO's blog) helping them get their frontline sales teams set up (inbound lead qualification and outbound prospecting) and redoing their sales process (part of which is openly published on their site).

Onna Young is one of their newer salespeople, and had a funny, and telling, way of observing one of the benefits of separating out the frontline steps of the sales process from the actual selling. Here's a dramatic re-enactment of a typical conversation she has with other sales friends!

“We have a different sales structure, here. It’s wild and subversive. [Aaron - you can sense a little sarcasm here :) ] Call us wacky, but the sales people just sell.

"Yeah, it is different - they don’t spend time randomly prospecting or cold calling lists. They just spend their time selling. We have two teams of people who pass warm leads to sales: inbound and outbound. The inbound, or "Market Response" reps, respond to incoming calls and website leads, and outbound, or "Sales Development" reps, do the prospecting into cold accounts. Both teams pre-qualify the leads before passing them to the quota-carrying sales people.

"Even better, the sales people can focus on developing their own new business by spending more time with current clients, making both the sales people and clients happier.

"Our overall goal is to make sure that we’re maximizing everyone’s time, so that the sales people are always working with relevant companies who need what we have to offer, and they aren't spending time with prospects that aren't a good fit!”

Guy Kawasaki's "Sales.Alltop.com" Launched

2008-06-16T10:23:00.000-07:00

I met Guy Kawasaki on the streets of Palo Alto a couple of months ago, just before he launched sales.alltop.com. There are some great sales blogs on there - it's worth checking out.

Here's how he describes Alltop:

We help you explore your passions by collecting stories from “all the top” sites on the web. We’ve grouped these collections — “aggregations” — into individual Alltop sites based on topics such as environment, photography, science, Muslim, celebrity gossip, military, fashion, gaming, sports, politics, automobiles, and Macintosh. At each Alltop site, we display the headlines of the latest stories from dozens of sites and blogs.

You can think of an Alltop site as a “digital magazine rack” of the Internet. To be clear, Alltop sites are starting points—they are not destinations per se. The bottom line is that we are trying to enhance your online reading by both displaying stories from the sites that you’re already visiting and helping you discover sites that you didn’t know existed. In other words, our goal is the “cessation of Internet stagnation” by providing “aggregation without aggravation.”

Fun with Comparing "Inbound" and "Outbound" Leads

2008-06-09T14:26:00.000-07:00

The term "lead generation" is so broad that it creates all kinds of confusion! One important concept is "inbound" versus "outbound" (and yes, in leadgen there are few black and white cases, even here, but this differentiation helps). While speaking with Laura Merling today at Mashery, I started sketching out some ideas on how to compare leads that come to you versus leads that you have to go fetch.

(Side note: does anyone have better terms than 'inbound v outbound'? Even these can be misleading.)

Inbound leads are, as it implies, leads that come to your company and into your website or 800#: usually through word-of-mouth and referrals, public relations, search engines or perhaps through marketing campaigns. Usually, a "Market Response" inside sales team reviews, qualifies and routes the leads to the correct salespeople. Excluding the educational inquiries (such as webinar registrations), these leads generally are already interested in what you have to offer, and are about to start a buying cycle.

Outbound leads are lead that you had to go dig up, whether through market development campaigns or a Cold Calling 2.0 or other "proactive" methods to let prospects who aren't already interested know who you are, what you do and why it should matter to them.

I realize I ain't no Picaso and I know the text is hard to read. You can figure the important points out... (also click it to expand it)

Why is this important?

Here are a couple of things that should help clear some of the mistakes and confusion up in execution:

1) Differentiated sales leadgen roles: you need different roles for qualifying inbound leads ("Market Response") than Sales Development (sales prospecting). Inbound leads have an hours/days rhythm; outbound leads have a weeks/months rhythm. It's almost impossible for reps to juggle both functions well because of the different demands of the job. It's similar to asking quota-based salespeople to close both small business and enterprise deals.

2) Planning is very different for each, so plan them separately. The high-quality portion of inbound leads (word-of-mouth, referrals, some search engine leads) are mostly organic. Usually their pace leads grows steadily, bit by bit, and any big jumps or dips aren't sustainable. When they come in they come in quickly, with high close rates, but it's hard, or impossible, to grow the amount of them faster.

Outbound leads that close are like finding needles in haystacks - they're there, but they take a lot more effort, sales cycles are longer and close rates are lower. But - though this can take quite awhile - once you build your "needle finding machine" that can repeatably find the needles...generating outbound leads can be very predictable.
That was fun
Don't be surprised if you start seeing more stick figure sketches in future posts!

Inbound Lead Management Best Practices [Updated]

2008-04-22T08:07:00.000-07:00

This is an updated version of the "Never Waste A Lead" post from September. Back then my partner and I presented at a BMA (Business Marketing Association) event. Here was the event description:

Your marketing programs are generating plenty of leads, especially from your emarketing campaigns, but are they getting followed up on? How effective is your sales organization at contacting your leads? How many never get called, or get only a token effort? Lost or ignored leads is one of the most common bottlenecks of marketing executives trying to maximize revenue from marketing-geneated leads. Instead of getting frustrated with sales, learn best practices of how to work with them to make sure no lead is left behind and wasted.

What you'll be able to take away from this RoundTable:

Why salespeople don't follow up on leads
Learn the best practices of aligning with sales to eliminate pipeline leakage
The most useful key metrics
Relevant CRM best practices

Three Common Mistakes
These are the most common mistakes that companies (especially young ones) make in managing their inbound leads:

1. Diluted ownership of the "marketing-to-sales baton pass."
Who has clear ownership of the "qualified pipeline generated" metric? It tends to end up as a stepchild, falling in between marketing (focused on quantity of leads) and sales (focused on closed revenue). Yet 'qualified pipeline generated this month' is the most important metric/driver of predictable revenue! There needs to be a clear owner.

2. Under-investment in Sales Development (salespeople dedicated to either qualifying inbound leads or doing outbound prospecting.)
Sales Development is a lot less sexy than marketing budget or quota-carrying salespeople, so it doesn't get the investment it deserves, but it vital! If your company receives more than about 200-300 inbound leads per month, you should have at least one inside salesperson dedicated just to qualifying those leads. Having salespeople qualify raw, unfiltered inbound leads in addition to closing deals is highly unproductive. You're having your most expensive sales resources doing much lower-value work. "Insource" it to a junior inside rep, and make sure that rep only passes qualified opportunities to the salespeople.

3. Tasking the same reps to both qualify inbound leads and attempt outbound prospecting.
The qualifying inbound leads role should be distinct from the outbound prospecting role. When reps try to do both, their productivity drops like a rock! We experimented with both models at salesforce.com, and the 'mixed model' of reps doing both inbound qualification and outbound prospecting was a disaster - I'll explain why in a future post.

Salesforce.com Inbound Lead Management Best Practices - BlackBox Revenue - Upload a doc

"The Ultimate Guide to Sales Force Automation: 100-Plus Links and Resources"

2008-03-06T19:37:00.000-08:00

InsideCRM posted a handy-dandy list of 100 link to various kinds of resources that could be useful to evaluating or getting better use out of SFA systems:

"The Ultimate Guide to Sales Force Automation: 100-Plus Links and Resources"
http://www.insidecrm.com/features/ultimate-sfa-guide-030408/

A nice example of effective selling (or is it marketing?)
On a side note, I'd like to point out the effective way InsideCRM alerted me to this article and encouraged me to publish a note about it. Two things:

Effective communication: They sent me a SIMPLE, SHORT note (posted below) that was in plain english, wasn't pushy or salesy, and spoke for itself. It didn't turn me off. If they'd put in a bunch of marketingy/salesy content, I frankly would have just deleted it as more noise.

Useful offer/service: I checked out their article, and it's actually something people can get value from. It was worth passing on to my readers with love :)

Here's the email I received:

"Hi Aaron,

We just posted an article " The Ultimate Guide to Sales Force Automation: 100-Plus Links and Resources" (http://www.insidecrm.com/features/ultimate-sfa-guide-030408/). I thought I'd bring it to your attention just in case you think your readers would find it interesting.

Either way, thanks for your time!

Amy"

Nice work Amy & InsideCRM!

PS: some bloggers don't like this approach...
http://brucefryer.blogs.com/weblog/2008/03/insidecrm-is-sp.html

"Why cost-per-lead budgets fail and fewer leads are better"

2008-03-05T14:34:00.000-08:00

Brian Carroll put up a post that aligns perfectly with my own thinking on why "cost per lead" marketing goals and budgets can be misleading at their best, and downright dangerous at their worst.

In case you think I'm implying that calculating the cost per lead isn't helpful - no, tracking cost per lead metrics can be useful as just one of many useful metrics. The problem is when cost per lead influences budgeting or purchasing behavior too strongly; then it becomes damaging. Simplistic cost per lead goals incent marketing teams to buy mass quantities of lower quality leads with lower close rates, rather than investing in sources that might generate fewer leads over more time but with higher close rates.

In addition to cost per lead, lead sources should be evaluated for quality metrics:
* lead-to-opportunity conversion rates / "cost per opportunity", and
* opportunity-to-close conversion rates / "cost per dollar of bookings"

Brian's post:

"A reader asked me to explain why fewer leads are better and why “cost-per-lead” budgets fail. These are two great questions that have the same fundamental answer: quality first then quantity.

The truth is that sales people care very little about the cost of the leads we generate. What they really care about is how many of those leads will actually become viable sales opportunities.

For this reason, I think cost-per-lead measurements are irrelevant unless we can answer another fundamental question first, “What is our rate of lead acceptance (a.k.a. sales pursuit) into the sales pipeline” and then “What is the cost per opportunity?”

Sadly, I find that a lot of marketers tend focus on cost-per-lead because they really don’t know what happens to their leads after they hand them off to their sales team..."

Read on: http://blog.startwithalead.com/weblog/2008/03/why-cost-per-le.html

Stop Obsessing Over "The Decision Maker"

2008-02-12T16:11:00.000-08:00

...and start obsessing over the decision-making process.

One of the changes in B2B selling is that, instead of decision makers making their own, often arbitrary decisions, purchase decisions today are made through a collaborative process involving multiple people and teams. This has always been a part of B2B sales, but now it's dominant. The 'decision making process' is now more important than 'the decision maker'.

Instead of this question or its variations:
"Who is the decision maker?"
"Who signs the check?"

Use questions like this:
"Who is involved in making the decision?"
"How will the decision be made?"
"What is the decision making process?"

Yes, there usually are the same old players like a main functional decision maker and the guy who signs the check. However, in the past, when decision makers would defer sales people to their subordinates, it was to blow the sales people off. Sales people were rightly trained to fight to get around this objection and obtain the decision makers' time.

Today, because executives are busier than ever, getting referred to their "get it done" contacts, the influencers, is usually the right way to begin selling into an account. Win over your internal champions and coaches first, and then you'll be perfectly positioned to win over the decision makers.

Should you ignore decision makers early? No!

Is the importance of reaching the ultimate decision makers any less important? No!

But the emphasis in the initial stages of a sales cycle should change. The focus of salespeople early in the sales cycle...
Past: 80% decision makers / 20% influencers
Future: 20% decision makers / 80% influencers

You do want to build a relationship with the decision makers early, but don't "sell" them until you've begun winning over the influencers, or at least until they've begun to agree with the value of your business case. You'll just look weak if you're pitching a business case to the decision maker that their influencers disagree with.

Related post: "Sell To Success" The All-Natural Close.

Phone Works' Q4 2007 VP Sales Comp Report

2007-12-21T17:14:00.000-08:00

Phone Works offers some useful compensation benchmarking data every year.

The report: Q4 2007 VP Sales Compensation Report

"Every year in the fourth quarter, Phone Works conducts a compensation survey of “Chief Sales Officers” of business-to-business technology companies. The majority of these businesses are based in the San Francisco Bay Area. Survey respondents include employees of both private and public companies. The size of the participating organizations varies greatly, with annual revenues ranging from the $1-10M range to over $1 billion. The average total number of employees is 972 and ranges from 11 – 19,000 and 11% of the respondents are from public companies.

This compensation survey is provided as a complimentary service by Phone Works, Inc., the San Francisco Bay Area’s leading sales consulting firm. Phone Works helps technology firms achieve rapid, sustainable revenue growth and implement successful, repeatable sales models while shortening the sales cycle. The industry’s largest technology companies and newest start-ups turn to Phone Works for lead-generation, lead-qualification, telesales and sales-productivity programs. You can reach Phone Works at (510) 749-9073.

They also have a page with past VP Sales and inside sales compensation reports.

Have fun :)