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Archive for December, 2010

Customer Acquisition 101: Grading Insurance Carriers

Friday, December 17th, 2010

Internet leads have become an essential element of doing business for insurance companies in this day and age.  However, despite working hard and spending considerable amounts of money on marketing to pull in these leads, most insurance companies don’t do enough of the basic legwork to ensure that they close as many of these leads as possible.  Leads360 recently commissioned a secret shopper study where they tested ten different insurance companies on how their sales teams responded to leads in four Key Performance Indicators, or KPIs.  The results showed that even the best of these companies were failing to follow optimal practices while many were simply letting money slip away through shoddy sales techniques.

The study commissioned by Leads360 collected data on the consumer response strategies of ten different insurance companies via secret shoppers.  Based on this data, the study graded each of these companies on how their responses compared to established best practices in four KPIs: speed-to-contact call, speed-to-contact e-mail, number of call attempts, and the sending of nurturing e-mails.  The results were surprising.  Only one company managed an overall grade higher than a B, six received an overall grade of C+ or lower, and all ten companies got a grade of C or lower on at least one of the four KPIs.  Simply put, even the best of these ten companies is leaving money on the table by failing to adhere to best practices with their consumer response while the worst performers are letting business slip away because of their sales practices.

The primary focus of this study was to examine the response strategy of companies during the pre-contact period between when a lead makes an online inquiry and when they are contacted.  Leads360’s data shows that this is a critical period for closing any lead and strong sales teams know not to lose a moment in jumping into action.  Leads360’s data has demonstrated that contacting a lead in the first minute after receiving a lead improves conversion rates by 391%, so there are few better ways to maximize ROI on a lead.  Despite this simple way to get a jump on the competition and stand out in the mind of a potential customer, many companies spent hours and even days before making any attempt to contact their potential lead.

The number of contact attempts is also crucial to closing leads.  Leads360’s data indicates that calling a lead 6 times improves the chances of contact to 93% and that between two and four nurturing e-mails garners a 350% improvement in lead conversion rates.  However, despite all this compelling data, most of the ten companies surveyed in the study weren’t following best practices.  Once again, the secret shoppers revealed that none of these industry leaders was averaging five call attempts, let alone the optimal six, and the majority of them only sent a single e-mail.

It’s very clear that simply putting in a more focused, more meticulous effort from a sales perspective can bring in more business and ensure that your company is getting the most out of its marketing dollar.  Leads close at a much faster rate for companies that contact leads sooner and make sure that they’re keeping after a lead until they make contact.  However, despite all this, every single one of the ten companies in this study failed to meet best practices in at least one category with many companies failing in all four KPIs.  Simply put, these companies are throwing money away.  When it comes to sales, no one, no matter how big, can afford to be doing too-little-too-late.  Is your company doing enough to close its leads? Based on this study, it’s clear that most of the industry has at least one major area where they could significantly improve and see immediate results in their lead conversion rate and ROI.

Click here to download the free study!

The Trifecta or: How Marketing Automation, Lead Management, and CRM Are Related

Friday, December 17th, 2010

I found an article on a Marketing Automation blog asking the question “What Is Lead Management?” It is a question that is eagerly addressed week after week in this blog and elsewhere. This question is great to see in print because it is an excuse to write about Lead Management and Leads360. But the reason this particular article inspired an entry here is because this article appears on the blog of a marketing automation firm. It is always encouraging to see specialists in marketing automation educating their readers about lead management.

Lead Management Software is designed around the task of turning prospects into customers. It is built around three fundamental drivers of lead conversion; speed, process, and persistence. Intelligent lead distribution puts the right lead in the hands of the right sales person right away. Performance metrics and ROI reporting let you course correct when lead sources or sales agents are underperforming. Good Lead Management software even has some marketing automation features that take the guesswork out of staying engaged with prospects until they convert into customers. Ultimately it is differs from Marketing Automation and CRM by virtue of the task that that it undertakes to accomplish, i.e., turning prospects into customers.

Here’s the difference.

• Marketing Automation generates leads
• Lead Management Software turns leads into customers
• Customer Relationship Management Software manages customer relationships

If a company were using all three of these types of software, Lead Management would sit in the middle. It holds all the real estate between Marketing Automation and CRM, equipping companies to navigate the delicate transition between prospect and customer. Without LMS, MA and CRM are missing the piece that turns prospects into customers; and that is the task upon which the whole enterprise depends.

The aim of each of these software types are as follows:
Marketing Automation core strengths - Marketing Automation turns strangers into prospects, i.e., it generates leads.

Lead Management core strengths - Lead Management Software turns leads into customers. Quick, Configurable lead distribution turbo charges speed to contact rates; being the first on the phone with a lead is critical. Automated lead follow up ensures that leads never fall through the cracks and each is followed up with according to configurable best practices. Performance Metrics and ROI reporting give companies data that illustrates which of their marketing efforts are working and which are underperforming.

Customer Relationship Management core strengths - Keep complete records of all interactions with existing customers, i.e., it retains customers.

If your goal is to grow your business by acquiring new customers, and you have to bet on only one, Lead Management will give you the best results. But if you bet the trifecta, choose Lead Management to win, Marketing Automation to place, and CRM to show.

Don’t Leave Well Enough Alone, and Do Fix What Ain’t Broke

Tuesday, December 14th, 2010

Here’s an interesting article that makes the argument that revenue is a trailing indicator. This  quote from the article that best sums up the author’s point of view, “Not only does revenue not capture or highlight … critical business metrics, in many cases it masks them driving companies to falsely assume they are doing well. If revenues are up, customers MUST be happy. If revenue is up we MUST have strong market positioning. If revenues are up we MUST be gaining new customers. When revenue is up, the only thing you know is . . . revenue is up.”

This value of this insight cannot be overstated. It is probably human nature not to ask too many questions when things are going well. This tendency to “leave well
enough alone”; and to “not fix what ain’t broke” is as widespread as these hackneyed phrases espousing it as a virtue. But another point made in that blog post is that by the time revenues drop it may very well be too late to do anything about it.

It is for this reason that it is important to look not just at the bottom line, but other metrics as well that are indicators of the health of your company at a much more granular level. How, exactly, are your marketing efforts paying off? Can you measure this, comparing the performance of your individual campaigns? If so then you’re able to see where your efforts are paying off and where they are not. This kind of information enables you to focus your efforts where they yield real results.

Are you distributing leads intelligently among your salespeople? Being able to put the lead in the hands of the agent most equipped to handle it within seconds of receiving the lead is easy when using a lead management system. Get the biggest fish to the best salespeople; make sure agents only get leads they are licensed to close. Whatever your business rules, time is of the essence: Getting the right lead to the right salesperson right away means that they are more likely to be the first one to get the lead on the phone.

Another key advantage to using a Lead Management System is that it doesn’t just let you make decisions about accumulated data, it also makes it easy to tweak your sales process. So when you find something that works for one team, or one campaign, roll it out in the others and see in hard numbers if the solution can scale to benefit the whole company. Using Lead Management you can find what works, and make it the new standard.

There are so many metrics to learn from, and it’s easier than ever to accumulate data from your company’s sales and marketing effort. The overvaluing of revenue as the pre-eminent performance metric is a holdover from a time when companies did not have the access to technology that characterizes the current landscape. In a simpler time, the fact that you were above water was a good indicator that you were doing ok. These days, there is so much data being collected and so many tools to make sense of it, it just isn’t good business to ignore it.

Dan Morefield and Jeff Solomon Among SLMA’s 50 Most Influential

Monday, December 13th, 2010

Congratulations to Leads360 President & CEO, Dan Morefield, and Leads360 Founder and Chief Evangelist, Jeff Solomon for being recognized as two of the most influential individuals in the Sales Lead Manaagement Industry. Click here to read the announcement!

The Benefits of a Strong Website

Friday, December 10th, 2010

As companies fight to attract more traffic to their websites, it can be easy to forget that a strong, user friendly website is equally as important as SEO.  If users arrive at the website and their visit isn’t optimal, even a high volume of traffic won’t benefit your company.  Your company’s website can be its window to the world and, for many if not most customers, it’s the primary means of communication with potential customers.  As such, it’s essential that a company’s website not just attract new users, but also educate them when they arrive and then capture their information and create a valuable lead.

The first goal of any company website should be to attract new business.  Websites can be an essential element of marketing and it’s important that your website puts your company’s best foot forward.  However, this extends well beyond simple SEO.  Netting the most possible traffic for your website is important, but it’s just as important to keep those potential customers there once they’ve arrived.  This means a careful balance of pleasing aesthetics and SEO.  Your website must look good to the customer without being too overwhelming or busy.  This requires utilizing your sites primary real estate to promote your companies branding.  Short and simple messages about your product will help prime potential customers, and easy navigation will make it simple for them to find what they’re looking for.

Of course, the purpose of bringing new business to your website should be to educate them about your product.  The best method of doing this is, again, keeping it simple.  Don’t make potential customers work for the information they want; keep it easy to access and easy to interpret.  Any potential lead should be able to quickly and easily navigate your site and shouldn’t have any trouble understanding the information provided.  Keep the language broad and simple, avoiding any jargon or lingo that might not be clear to the average consumer.

Finally, it’s important that your website not create interested customers only to let them navigate away without first creating a lead that can be used to generate new business.  Your website should provide a simple form that can be filled out with as much or as little contact information as the lead is interested in providing.  By doing this, your website can find strong leads and create new business.  Not only can you potentially capture new information, but this information will be coming from a lead that willingly provided it.  These leads are already interested in your product and ready to be closed, making these leads extremely valuable.

A strong customer-oriented website isn’t just valuable to your company, it’s also of great benefit to the consumer.  The internet now provides potential customers of almost any industry with a virtually unlimited research tool at the tips of their fingers.  When a website offers the opportunity to leave contact information, the consumer can educate themselves on the product and then, if interested, opt to provide their contact information so that they’ll be contacted in the future.  This makes it easy for customers to identify the product they want and then actively seek them out.

On the whole, a strong company website must attract traffic, keep the traffic there with a well-designed site, make it easy for a potential customer to educate themselves on the products available, and then easily provide their contact information so that they can get in touch with the desired company.  In the end, when companies maintain websites that can do all these things, it’s of enormous benefit to both the company and the potential consumer.

If CRM Adoption Is Low, Try This Experiment…

Friday, December 10th, 2010

There are a lot of articles on the internet offering strategies to help increase low CRM adoption rates. Here’s an example. A Google search on CRM adoption shows that this is not an uncommon challenge.

Low CRM adoption rates result from the fact that there is a disconnect between the promise of all that CRM can do, and the way it works in the real world. This disconnect manifests in low adoption rates. These low adoption rates are a common enough problem that they attract the commentary of pundits who come with suggestions about how to increase user adoption of CRM.

But trying to adopt these strategies to increase CRM adoption this is just throwing good money after bad. If the adoption rate is low, the solution may not be a fit. You can strategize all day about how to hammer in a nail with a screwdriver, but at the end of the day, you’ll be a whole lot better off if you pick up a hammer.

Customer Relationship Management is often sold to organizations without enough emphasis on what is meant by the ‘relationship’ part. The plain fact is that CRM is not designed to establish new relationships with new customers. CRM is a tool that is does very well what it was designed to do, i.e., manage customer relationships. But establishing relationships with new customers is best done using a lead management system. Among other things, lead management software is designed to help salespeople quickly establish contact with prospects and follow up until they close. In other words, until they change from prospects into customers. When leads become customers, the ‘customer relationship’ begins, and CRM becomes truly effective.

Are you trying to get a CRM to do an LMS’s job?

Here’s an experiment you may be able to do to see if you’re trying to make a CRM do the job an LMS.

It’s easy to see if your agents are using the right tool for the job if your sales team is divided into two types of roles.

New Account Sales

Those who are focused on generating new sales, such as:

  • Account Executive
  • Field Sales Rep
  • Business Development Rep/Mgr

Existing Account Sales

And those who manage existing clients, fulfilling orders, etc…

  • Account Manager/Rep
  • Customer Service Rep
  • Inside Sales Rep

The Experiment: Compare CRM adoption rates between these two distinct types of sales agents. All other things being equal, the salespeople in the second category, Existing Account Sales, have higher CRM adoption rates. For these salespeople, the customer relationship is already established, and the CRM software equips them expertly manage it.

When the salespeople in the first category, New Account Sales, are stalling in their adoption of your CRM solution it is because they are being asked to establish customer relationships with a customer relationship management tool. They are being asked to drive nails with a screwdriver. Salespeople in these types of roles need a lead management solution.

And here’s the good news. It’s not necessary to choose between LMS and CRM.

When you want these two types of salespeople to perform at their peak potential, use both LMS and CRM. In fact, you can use the industry leading Lead Management and CRM tools together. Leads360 and Salesforce.com are fully integrated. This integration enables your New Account Sales team to work leads in Leads360 until they convert. When they convert from prospect into customer they can be exported to Salesforce.com with a single click where the Existing Account Sales team takes over.

Give all of you salespeople the tools they need to do their specific job and see improvement in close rates and retention rates.

Your Leads Are Trying To Tell You Something

Thursday, December 9th, 2010

Your leads are trying to tell you something. They are holding onto a wealth of information. In fact, your leads have information that is critical to the health of your business. There may be no source of information more directly tied to the effectiveness of your company’s sales efforts than all the information that your leads are holding. It’s a gold mine.

Here are just a few of the things that your leads know:

  • Your leads know where they came from, i.e., how they came to be considered a prospect by your company.
  • They know if they are a good fit for the product or service you are selling.
  • Your leads know how quickly they were called.
  • Your leads know how many times they were called.
  • Your leads know how quickly and how many times they were emailed, and they know exactly what each email said.

This is only a sample of the information your leads accumulate from the moment they hear the name of your company to the moment they either close or are pronounced dead. Your leads know this and much more; but to sum it up: Your leads know how diligently your salespeople tried to engage them.

Wouldn’t it be great to have access all that information? Imagine how much easier it would be to manage your sales team, allocate leads, adjust your marketing strategy, etc., if you knew what the leads know. For users of lead management software, gaining access to this information requires no further effort or expense. Information about the way that every lead, from every source, has been worked by every sales agent who touched it is all a click away.

Wherever each individual lead has ended up, there are steps that have been taken to get it there. Leads that have closed and leads that have been wasted have one thing in common: They leave behind a trail of bread crumbs showing how they were worked. Are you looking at the trail? Can you afford not to?

Before it was this easy to accumulate and analyze data on sales process, it made sense to manage a sales team with an eye only on the bottom line. As long as they hit quota, their sales process is their own. But now? With robust, affordable lead management solutions available? Why not leverage what has been proven to work?

It seems obvious that it is valuable to know which behaviors bring a lead closer to becoming a deal. But what isn’t always considered is that each lead does in fact leave a trail as it makes its way through the sales cycle. With lead management software, it’s possible to see the trial that leads are on and correct the course as necessary.

The trail of breadcrumbs is there. The only question is; are you looking at it?

“The Sleeper Effect” and Sales

Thursday, December 9th, 2010

When selling any type of product or service, most sales people will argue that your chances of a sale are directly linked to your ability to convince someone of the value or benefit immediately. When a prospect shows uncertainty or does not seem to be very interested, sales people tend to give up because of the perceived disinterest displayed by the consumer. Although focusing your attention on a different prospect may seem be the logical thing to do, Lead360 has always pushed the importance of consistently nurturing these types of prospects in the hope that they will eventually be convinced and then convert.

It’s no secret that studies performed by Leads360 and many other sources have proven that this practice is an effective means of increasing your conversion ratio, but what really the science behind seemingly disinterested consumers making complete “180’s” with their attitudes?

PsyBlog recently explored this intriguing concept in an article entitled “Persuasion: The Sleeper Effect.” In this piece, the author explains how during WWII the US department of War set out to test whether or not propaganda films were actually influencing soldier’s attitudes. Interestingly enough, psychologists found that while they sometimes strengthened the view the soldiers had before seeing the film, “they were extremely unlikely to make soldiers more optimistic about the war in general “(Hovland et al, 1949).

Or did they?

Although the films initially seemed like a failure, “the researchers found that was that some of the films did have an effect on soldiers after months had passed. While attitudes didn’t change immediately, subtle shifts were picked up nine weeks later. US soldiers who watched one film about The Battle of Britain showed little extra sympathy towards the British five days later, but, after nine weeks, they had softened. Yale University’s Carl Hovland and colleagues called this the ‘sleeper effect’.”

This so called “sleeper effect” is a particularly difficult concept for people to grasp simply because it seems to defy common logic. As PsyBlog puts it, “Persuasion should really be strongest just after a message is delivered. Over time the persuasive effect should weaken as people’s attitudes return to how they were before—and this is what many other studies have shown.”

Granted, this may be true, but research has proven that the “sleeper effect” does exist, but just under two types of circumstances.

1. “Big initial impact: the sleeper effect only emerges if the persuasive message has a major initial impact. If it isn’t powerful enough, it won’t hunker down in our minds, biding its time before it boomerangs back.”

2. “Message discounting: it should be obvious that the source of the message can’t be trusted so that we discredit it; like when the soldiers were watching the propaganda film.”

So what does this mean for sales people?

Sales people should always strive to contact consumers immediately after they express interest. By following this approach, you are more likely to convert consumers who are ready to purchase, and make a lasting impact on those who are not. As the sleeper effect dictates, although a prospect may initially discount your message because they haven’t established trust with the source (you), “over time people forget they discounted the information, and the content of the persuasive message, which was processed thoroughly, does its devilish work.”

Besides attempting to contact first, sales people should also consistently nurture consistently over time to try to help the “sleeper effect” take hold more quickly. Subtle reminders can help a prospect along, and can help you close more deals.

(Source: PsyBlog)

Cost per Lead: The Next Generation

Thursday, December 2nd, 2010

This article on the Vision Edge marketing blog advocates turning away from lead based metrics such as ‘cost per lead’ because they are misleading. The author bases her claim in part on a Forrester Research study that  found that “the metrics that most B2B marketers say they use — like number of leads generated and cost per lead” — rank in the lower half of the effectiveness list.” Her larger point is that putting undue emphasis on cost per lead ignores much more important information, such as: Which marketing efforts are resulting in leads that move on in the sales process?

In other words, cheap leads that bring down the cost per lead but don’t close are a waste of time. But placing undue importance on cost-per-lead when measuring ROI incentivizes marketers to waste their time on this type cheap lead generation. This is a keen insight on the part of the author. Her solution to this problem, however, is to focus on marketing metrics that seem much more difficult to quantify.

But another solution is to use a lead management system that enables you to measure the effectiveness of marketing and lead generation efforts from every angle. A lead management solution that has robust campaign management and reporting tools will enable to marketers to slice and dice metrics as needed. Undue attention on cost-per-lead will in fact set off a race to the bottom, but what about being able to measure ‘cost per qualified lead by campaign’, or ‘cost per converted lead by campaign?’ With the right tools it’s possible to measure exactly how well leads from every source are performing; to get feedback in real time about what’s working, and what’s not worth the time and money.

Lead management software puts a whole host of tools in your hand to track the effectiveness of all your marketing efforts.