Consumer Products and ServicesLead Generation & Prospecting in a Sales 2.0 World

Complex B2B sales are becoming more difficult to find and close than ever before, due to longer sales cycles and more complex B2B purchasing processes. In addition, the traditional lead generation and prospecting process is proving to be less effective than it once was. Many salespeople do not have the time required to do effective lead generation, prospecting, call preparation, or lead nurturance.

Leads

Complex B2B sales are becoming more difficult to find and close than ever before, due to longer sales cycles and more complex B2B purchasing processes. In addition, the traditional lead generation and prospecting process is proving to be less effective than it once was. Many salespeople do not have the time required to do effective lead generation, prospecting, call preparation, or lead nurturance.

One solution is to adopt a Sales 2.0 model, which can reduce selling costs, dramatically shorten the sales cycle, and significantly increase sales revenues. Adopting a Sales 2.0 model can help you:

  1. Increase your sales revenues
  2. Accelerate your sales cycle
  3. Convert more leads to sales
  4. Reduce selling costs
  5. Increase sales productivity
  6. Free up your salespeople to do more selling



How is this possible?

In the Sales 2.0 model, many of the critical sales activities are transferred to an internal or external “sales development” function. This workload transfer frees your salespeople to close more business deals, thus increasing sales productivity and reducing your selling costs. In addition, new technologies, such as social media and Web 2.0 tools, are used to build relationships and provide strong leads for your salespeople.


The Traditional Role of Lead Generation
The role of lead generation is to provide salespeople with pre-qualified, sales-ready leads. Each sales lead represents a prospect to be followed up, further qualified, and converted to a sale by an experienced sales professional.

In the classic prospecting scenario, the salesperson uncovers or receives the sales lead and attempts to schedule a meeting with the prospect. The purpose of this initial meeting is to better understand the prospect’s business needs—and, very importantly, build rapport and establish a relationship to build trust and confidence. This is an important precursor to the final sale. 

However, scheduling the first meeting is not as easy as it used to be. Increased time constraints faced by many business buyers today have made it increasingly difficult for salespeople to get through to a prospect. 

In the traditional sales prospecting model, scheduling this initial sales meeting has become such a challenge that external telemarketing vendors are often hired to conduct phone calls on behalf of the salesperson for appointment-setting with prospects.

The new Sales 2.0 model offers a more effective approach to prospecting.


The Sales 2.0 Model for Prospecting and Lead Generation
The new Sales 2.0 model optimizes the alignment of your sales resources more effectively than the traditional sales model.

  1. The Sales 2.0 model transfers the non-selling workload of a quota-carrying salesperson to a non-quota-carrying, lower-cost sales resource called “sales development”.
  2. This shift of workload frees up the salesperson’s time and allows him/her to focus on what he/she does best—selling and closing more deals.


If implemented correctly, Sales 2.0 can reduce selling costs, increase sales productivity, and provide a high return on investment (ROI).

Reduce costs: Offloading part of the sales workload from your salespeople can be very cost effective because a salesperson’s “opportunity cost” to the company is very high.

For example, a salesperson with a NGN 1 million annual quota is worth NGN 500 an hour to the employer, not counting the salary and benefits. This is calculated by dividing $1 million by 2,000 hours (50 work-weeks per year * 40 hours per week). On the other hand, a non-quota carrying sales resource receiving NGN 100,000 a year in salary and benefits costs the company only NGN 50 per hour; one-tenth of the salesperson’s hourly opportunity cost.

Implementing the Sales 2.0 model also includes:

  1. New processes: New work alignment processes must be implemented so that your sales team and the sales development function are tightly aligned and are working together seamlessly to increase sales productivity and accelerate your sales cycle. 
  2. New technology: New enabling technologies such as social media and Web 2.0 tools are available to facilitate the shift to a Sales 2.0 model—and can also provide a competitive advantage to your company’s sales prospecting processes.



The Role of the Sales Development Representative in the Sales 2.0 Model

The Sales 2.0 model requires implementation of a “sales development” function. Sales development representatives are highly-trained, do not carry a quota, and can be either internal or external resources. These are the people who take on the non-selling workload from salespeople, freeing them up to be more productive.

The primary work of the sales development representative is to generate, pre-qualify, nurture, and deliver high-quality, sales-ready leads to quota-carrying salespeople. 

  1. Initiate and engage prospect contacts in online conversations using social media to build trust and credibility before the salesperson meets with the prospect. 
  2. Make appointments for the salesperson to meet with the prospect contact. 
  3. Manage the valuable process of nurturing your “warm” leads until they are ready for sales conversations with your salespeople. 
  4. Develop highly useful prospect profiles to prepare the salesperson most effectively for the initial meeting with the prospect.



The Function of Social Media in the Sales 2.0 Model

The prospecting process in the Sales 2.0 model is very different from the traditional prospecting process. For example, in the Sales 2.0 model an informal conversation to build trust and rapport and to learn about the prospect’s business needs can take place even before the salesperson meets with the prospect.

The technology that allows such a trust-building conversation to take place is online social media such as LinkedIn, Twitter, and Facebook. An online social media conversation with a potential buyer can be initiated by a sales development representative--before the salesperson gets involved—greatly increasing sales productivity and increasing prospecting reach. The good news is:

1. 91% of B2B IT buyers are now involved in social media at least as “spectators” (Forrester Research, 2009).


WHY ARE COMPLEX SALES MORE DIFFICULT TO CLOSE TODAY?

Most high-technology B2B sales for businesses ranging from small to enterprise-level are “complex sales,” meaning there is more than one decision-maker involved. However, due to difficult economic times over the past few years, many buying firms have cut their budgets. Hiring is tight and many companies have downsized. Often one person is doing the work that two people did before, which leaves them little time to meet with salespeople.

In addition, there are many other challenges associated with the complex sale today: 

  1. Tighter budgets for buyers
  2. More people involved in the decision-making process within the IT buyer’s organization
  3. Lengthier approval processes mandated by the buying organization
  4. Increased complexity of the decision-making process for many buyers
  5. Buyers’ desire to avoid risky decisions
  6. Increased number of options for buyers due to competition
  7. Buyers now require more information on proposed solutions
  8. Dependency on the efficiency (or inefficiency) of internal communication between various departments involved in the purchase decision


These factors may help explain why decision-makers at your prospective customer organizations have so little time to meet with your salespeople—especially someone they do not already know. To succeed, sales organizations must adapt their sales process to these new business realities.

Many selling organizations have not yet adopted new marketing strategies and sales tactics that are better suited to these new business realities. As a result, there may be a significant competitive advantage for the selling organizations that do adopt the Sales 2.0 model more quickly than their competitors. 


PROSPECTING: WHO ARE YOU GOING TO CALL?

A crucial question for a salesperson searching for new prospects is: “Who should you call?” 

  1. What companies should you target?
  2. Which of your targeted prospect companies has an immediate need for your solutions?
  3. Who should you call on within the target company? 


The next step is often the biggest hurdle of all. Once you have identified a few people in the target company who may be involved in, or know about, the decision-making process, how do you get an initial meeting with them? 

The traditional prospecting model involves a lot of cold calling, which usually amounts to leaving many voicemail messages for contacts in the prospect organization. Cold-calling can take up a lot of a salesperson’s time and can be very frustrating.


How much harder is cold-calling than it used to be?

Some telemarketing firms have reported that it typically takes between 7 and 12 attempted calls just to get a decisionmaker on the telephone to schedule an initial meeting, and then between 7 to 10 additional meetings to complete a sale. 

If there are just seven decision-makers involved in the decision, completing a sale will require at least 700 phone calls per prospect organization to complete the sale. Perhaps this begins to explain why over half of the sales reps in the U.S. did not achieve their sales quota last year! 

Is there a better way to reach your prospects?

According to research, referrals are a very effective way to gain a meeting more quickly with a prospect decision-maker and to accelerate the sales process.

A recent survey of salespeople asked “How often do you close sales that you initiated with a referral?”

  1. 31 percent said “over 50% of the time” 
  2. 30 percent said “over 70% of the time” 
  3. 23 percent said “over 90% of the time”


In other words, 84% of salespeople polled said they close business 50% or more of the time if they initiated contact based on a referral, and 53% of the salespeople polled said they close business 70% or more of the time when they initiated contact based on a referral. Referrals are powerful!

Some sales organizations report that with a referral, it may take only three calls to reach your prospect to schedule a meeting, and only two or three meetings to complete the sale—a total of only nine calls! Compare those nine calls to complete a sale based on a referral to the 700 calls required without a referral. That is a sales productivity boost of over 7,000%, and clearly accelerates the sales cycle.


CAN SOCIAL MEDIA HELP YOU GET AND CLOSE MORE DEALS FASTER?

Since over 90% of B2B IT buyers are involved with social media, it stands to reason that social media sites offer promising ways to engage potential prospects in trust-building conversations, obtain referrals, and better prepare for meetings with prospects.

Using social media can turn the daunting problem of more and more decision-makers in the buyer organization into an opportunity. Using a referral to connect to any one of the 7 or 14 or 21 decision-makers provides a possibility of enlisting that contact as an inside “champion” who will act as a referral to other members of the decision-making committee.

The traditional way to obtain a referral is to comb through one’s Rolodex or hang out at cocktail parties or at the golf course to find someone you know who also knows your prospect. Today’s Rolodex is a social media site such as LinkedIn, virtual “cocktail party” conversations take place on Twitter, and golfing buddies now “tee off” on Facebook. 

A Social Media-based Prospecting Plan
As we’ve seen, referrals are powerful. They help build trust and confidence, and can dramatically shorten the sales cycle and increase the closure rate. Once your referrals have helped your salesperson get an audience with the prospect, good preparation is crucial to success at the sales meeting. 

Here are some basic steps that can be taken using social media to obtain referrals and adequately prepare for a productive sales conversation with a prospect.

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