Ted Grigg's Reflections about Direct Marketing

Business to business lead generation strategies continue to evolve. The Internet plays an increasing role in building interest and qualifying prospects.

But setting up live appointments with C-level executives for highly compensated sales people still relies on the penetration tool of choice --- telemarketing.

No single medium alone will yield satisfactory results. Online, direct mail and telemarketing work synergistically to create high level appointments with a winning Return on Investment. But the core medium remains telemarketing.

If a program allowed the use of only one medium, I would select telemarketing as the most important and reliable medium for B2B lead generation.

Do not underestimate the challenge of securing appointments with C-level decision makers in today’s companies. Their time is valuable and they do not respond well to interview offers that do not promise solid opportunities to solve their business challenges.

It is not uncommon to spend $1,000 to $1,500 or more per qualified appointment with these executives. So the direct marketing lead generation program must yield both a consistent lead flow combined with prospect quality.

The following example represents a lead generation program I designed for a client in the health care industry selling two to three year contracts that could easily amount to one million dollars each.

Here is the program summarized in a simplified flow chart.

 
The strategy calls for a personalized mini-proposal with case studies and key product benefits in a personalized direct mail package sent as certified mail. The telemarketers follow up every direct mail package with a call to the individual it is addressed to.

The call to action includes an 800 number, a response form with qualifying questions and a personalized url (purl) to complete the same questions and/or request an appointment.

After repeated, unsuccessful attempts to contact the executive or set up an appointment by phone, the strategy includes a follow up 9X12 package sent priority mail to these individuals in a last effort to secure an appointment.

The entire project works best with sales staff involvement when they contribute to the content of the direct mail packages and assist in the training of the telemarketers.

What modifications would you suggest for the strategy as laid out? What results did you achieve? Did you test your strategy? If so, what were the results?

The Chief Marketing Officer for a highly targetable vertical BtoB market told me that the traditional method of generating leads using direct mail plus telemarketing and Internet support was dead.

He now uses online marketing without print, outbound telemarketing or direct mail support to qualify prospects and set up appointments.

After one year using this approach, he claims that he achieved his sales objectives and was pleased with the ROI.

He did admit that the cost for using the Internet marketing only approach exceeded the cost of an intensive traditional approach in year one.

The decision to use new media alone was done without the benefit of testing.  

His universe consists of less than 5,000 decision makers in several market segments that exist on rentable mailing lists. These lists represent the actual names, titles, addresses and current phone numbers with a penetration of over 90% of the available target markets. The list accuracy and overall quality is excellent.

I’ m interested to hear your reaction to this story. Have you heard of or tested a similar approach? What were the results?

Respected and well-known agencies cannot depend 100% on referrals for their business anymore. Frankly, I doubt that was ever the case.

The concepts in this blog probably apply to all BtoB lead generation and new business building activities.

But since I was personally responsible for new business either totally or in part for several agencies, I have developed some dos and don’ts when it comes to building new business for them.

Advertising agencies are like any other American business. They never seem to have as many qualified prospects as they would like to meet the organization’s sales goals. So why do 90% or more of these expert, high-quality organizations consistently struggle to attract new business?

Let’s start with the things that work against sustaining new business for your agency over the long term. In a follow up article, I will talk about what to do.

How many new business meetings have you attended when somebody suggested the agency select the top 10 prospective clients the agency should go after? Sounds like a good idea because this focuses the agency on what type of client they want. It also sets the stage for action.

So the team proceeds with the necessary tasks of researching the companies’ target markets, competitive environment, advertising portfolio, present agency of record, overall marketing budgets and corporate infrastructure and list of decision makers. Then the agency contacts each company to present its capabilities.

After 6 months of effort, the agency was able to secure two capabilities presentations resulting in one new business pitch. But the incumbent agency kept the business. Some agencies do not even get this far in the process.

What now? After 5 or 6 months of effort or more, there is nowhere to go.

Does that mean selecting another 10 fresh company names next year only to end up with the same result?

The moral to this lesson is that the agency must maintain new business momentum with a set number of capabilities presentations each month to sustain and grow the agency. So make the prospect list as large as possible based on your selection criteria.

Your prospect database must exceed 10 prospect companies to keep your new business program alive.

Make this tactic a part of your whole new business program, but not the only thing.

The strange thing is that some agencies don’t even go this far with their new business efforts. No wonder that they are going out of business or succumbing so easily to mergers and acquisitions (Note: not the only or even significant part of the reason for the flurry of mergers. But it certainly is a key factor).


Quantify how many new accounts are required to define success in the next 12 months, 24 months and 5 years.

Further qualify the accounts by preferred size, by industry, by market position and any other criteria that match the account needs to the agency’s strengths.

The reasons why this step is so critical: expectations and resources required for success need to be determined prior to creating the new business plan.

There is nothing more discouraging to leaders than working hard on the selected strategies only to find that the internal staff and corporate resources are not available to complete the new business effort.

I always recommend that agencies need to allocate between 10% to 15% of their people and investment budgets for new business efforts.

It takes talent, energy, leadership management focus and money to create your new business machine.


New business costs money and requires access to the agency’s talent. Only the President has the authority to pull people off of existing business in order to dedicate a portion of their time to new business.

Any other approach starves the new business effort due to an inability to set priorities.

After all, the agency’s most important client is the agency itself. But those words mean nothing without powerful action from the agency leader.

If the President or day-to-day operational leader does not lead the new business effort by example and personal zeal, then the chances of growing the agency drops nearly to zero.

Such agencies can exist for 10, 20, even 30 years. But they eventually go under because they are typically too dependent upon a single client that represents 60% or more of their revenue.

So when that key account is acquired, merges or simply goes out of business, so does the agency. I have seen this happen personally several times.

My new business philosophy for agencies is to view every account as an account that the agency will loose through no fault of its own.

Betting the agency on a single account is folly.

With most single account agencies, they are making major profits every year, saving a lot of the money and operating debt free with a huge credit line. But when that account goes away, the agency cannot survive very long without revenue.

When that key account departs, getting serious about new business is too late. The contact base and leads in the pipeline take years to build.

What’s worse, the agency knows how to manage existing accounts. But neither the top executive nor the account team have the interest or developed the skills needed to bring in new business.

Let me add here that the creative director --- in fact, the whole agency --- must demonstrate a willingness to get involved in the new business effort.

But the greatest problem about the top executive’s non-involvement in new business revolves around resource allocation.
 


The idea that a single individual will make or break the agency’s new business effort always struck me as an excuse for others in the agency not to get involved in the risky and dirty business of “new business.”

By default, such individuals are only as good as their Rolodex. Once they run out of names, then it is back to the drawing board.

Additionally, this concept relies on the concept that the agency as a whole can concentrate on making money on their existing accounts while essentially ignoring new business. And then, if they have time, they may choose to pitch an account.

Another problem is that hiring such individuals represents the agency’s answer to the new business effort. The agency as a whole does not have to buy in to the success or failure of new business. That’s the “heavy hitters’” responsibility.

For agencies, the integration of the organization’s people, focus and energies are essential to new business success. If anything, the “heavy hitter” gets in the way of this strategy and actually isolates the agency from new business activity.

This blog is getting longer than I like. So I will finish this up with some of the “dos” that build a successful new business program for the agency in a future blog. What other “don’ts” should businesses watch out for when organizing for new business?

 

Most every direct marketing strategy becomes more sophisticated and effective with the advent of the Internet channel. And lead generation follows that same path.

With the Internet, generating leads takes on the characteristics of Customer Relationship Management. But since the Internet contacts are not yet customers, perhaps we should call this Prospect Relationship Management.

Before the Internet, the primary lead generation processes included direct mail combined with telemarketing. The ability to manage leads from lukewarm interest to qualified leads was brief. The prospects accepted the appointment, or they disappeared into oblivion due to the high cost of maintaining relationships.

With the Internet, it is now possible to gradually evolve low quality to higher quality prospects by introducing them to the advertiser’s products and services. Once they click on the web site, the advertiser can follow any prospects’ visit activities and assess their interests.

For those prospects willing to complete surveys or other forms of feedback, the clues are clear that now is the best time for the advertiser’s sales person to call them.

But here’s the rub. How does the advertiser drive these business prospects to the company’s web site in the first place?

Some of this is done internally within the web channel itself with Search Engine Marketing (SEM) or paid search. But this is usually insufficient to keep the leads flowing in sufficient volumes to achieve the required sales goals.

Direct mail remains a core strategy for leading interested prospects to your web site. If done correctly, the direct mail package will increase web traffic AND immediate prospect calls to the advertiser’s company.

There is another challenge that advertisers must master to make their lead generation programs perform at peak performance. Just as Customer Relationship Management (CRM) requires powerful software to support to proper follow up of all customers over the long term to increase sales, Prospect Relationship Management also requires this same software to cultivate prospects into becoming customers.

As always, the media channels selected to generate leads are not nearly as important as the close working relationships between the sales people and the software required to cultivate leads.

In the end, a new business generation machine relies more than ever on the sales force’s ability to integrate their activities to leverage the lead database.

What do you see as today’s biggest challenge in lead generation?