Regular readers of this blog, and people who have worked with me, know that I’m a proponent of a process-oriented, metrics-based, and technology-enabled approach to demand generation. And I typically encourage B2B vendors to take the long view in developing their demand generation funnel, treating it like a high-value business operating inside their business. I believe that a well-designed demand generation system shamelessly imitates the features of other “mission critical” processes at work in our daily lives, such as air travel, energy production, or the food supply chain. All of these processes generally work as advertised, and generally without interruption. And these processes deliver incredible value to all their stakeholders. It’s hard to imagine modern life without flight, fuel, and food.
It took time to build these modern marvels and it takes time — though thankfully not nearly as much — to build a predictable revenue engine. But time is not a luxury that every company has, or believes it has.
Some companies just want leads.
And they want the leads now and they want them to be qualified to speak to a salesperson. And they would only like to pay for those leads that are qualified.
Having worked on both the client- and agency-sides of the demand gen industry, I can appreciate both why this request is made, and why it’s rarely, if ever, fulfilled exactly according to the client’s wishes. Someday I may bang out a post explaining this disconnect in greater detail, and what might be done to address it. But for now, I offer you instead:
TLOTL’s Quick-n-Dirty Resource Guide for B2B Firms That Just Want Leads (version 1.0)
The following is a starter list of resources that B2B firms can engage if they want to partially or fully outsource lead generation.
1) Appointment Setting Firms – These companies typically have their own databases, telemarketing staff, automation tools, and methodologies for delivering clients the specific outcome of an appointment for their sales person. Usually they will guarantee the result of “a person who matches your target buyer profile, who works at a firm that is in your target list / segment, and who is willing to take a call and/or have a visit from your sales person (usually it’s a phone call).”
- Pros: Huge convenience factor for the vendor in avoiding all of the complexity and risk involved in delivering that critical outcome of the initial sales appointment. And the ramp-up time for a vendor like this should be lower due to the quality of the talent setting the appointments (typically seasoned, successful sales reps).
- Cons: This can be fairly expensive on a per-appointment basis (though at a certain close rate, who cares?), and the expectations of the sales team still need to be managed somewhat. And it may simply not be possible to “qualify” the lead further than the prospect’s willingness to take the initial call/meeting with your sales rep.
- Cost per lead range: the “high hundreds” of dollars per guaranteed appointment. I could be more precise but I have friends in several of these firms and I prefer to let them quote their prices.
2) Traditional Telemarketing Firms – most of us have gone this route at least once in our careers. Many telemarketing firms will also offer appointments as an outcome, but there is usually a greater investment on the part of the vendor to train the telemarketing firm’s reps on how to effectively position the offering.
- Pros: The vendor is able to manage the prospecting message fairly tightly because they train the reps making the calls. Most vendors can also provide interesting metrics on their calling programs, which are useful to a marketer even if the program itself isn’t successful.
- Cons: Higher risk in terms of the time and effort involved in ramping up the telemarketing agency. Heavy reliance on the firm’s ability to attract and retain talent for a job that is often a stepping stone or a dead end. If you give them your list to call against, and they struggle to achieve results, they will often blame the outcome on your list.
- Cost per lead range: Very few of these firms will sell to you on a per-lead basis. But however the pricing is packaged, you’re ultimately paying for the number of people making calls for you, plus whatever markup the telemarketing firm can negotiate to cover the overhead and generate a profit. There is a lot of competition in this space, so those firms that can keep their costs low can compete more aggressively on price. You’ll generally find that the most competitively priced telemarketing firms have call centers based in secondary or tertiary markets (lower cost of living and commercial square footage) versus major metro areas.
3) Business Media Firms – these companies typically own targeted web properties that contain content (e.g., whitepapers, webinars, analyst briefs, user-generated articles, etc) related to specific business topic areas such as CRM, Financial Services, Telecom or other markets. The content attracts potential buyers/influencers and entices them to register (e.g., complete a web form) for access to that content. The media firm then sells these leads to several B2B vendors, typically on a per-lead basis.
- Pros: Some of these companies have the ability to phone-verify and lightly qualify the registrations they collect on their web sites, resulting in a higher quality lead than a stand-alone web form registration. A few of these vendors offer ongoing lead nurturing and scoring as a value-added service, helping the purchasers of those leads segment and prioritize the leads for sales or marketing follow-up.
- Cons: Some of these companies lack sufficient quality controls on the leads they pass to clients. Others provide decent leads, but they sell them to too many vendors (10 or more in some cases). The resulting feeding frenzy of sales calls turns off the buyers/influencers who originally registered for the content, making it hard for any vendor – even those with the most aggressive salespeople – to convert the leads.
- Cost per lead range: From $10-$15 per lead, for horizontal, transactional business products like certain office equipment, to several hundreds of dollars per lead, for highly considered B2B purchases in hyper-targeted markets, e.g. ERP system buyers in Fortune 1000 companies.
4) Targeted List Providers – When compared to buying a compiled list from a name-brand business data firm or a direct marketing list broker, working with targeted list providers is generally better value for money. These firms use sophisticated software and database tools to build rich lists of business buyers and influencers, going several layers deeper than the C-suite and line-of-business heads. Then they layer on additional services that confirm if a particular person on a particular list is (a) still employed by the company in the list record, or (b) is responsible for a certain business process or purchasing function.
- Pros: Some lists these companies provide can be very accurate and work well if you are planning an aggressive campaign to contact them.
- Cons: While the contacts on these lists may be the “right person in the right role,” there’s no guarantee that they will give the person who calls them the time of day, or that their firm even has an active purchase process underway.
- Cost per lead range: there is a wide range of prices for these lists and a lot depends on where in the supply chain your order is placed.
5) Boutique Demand Gen Agencies – These are often “virtual” agencies where seasoned marketers with client-side experience manage the delivery of demand gen firms such as those described above. This happens to be one of the ways I work with my clients; essentially serving in dual roles as purchaser of lists and/or leads, and pre-sales process manager, ensuring that lead conversion and pipeline growth targets are achieved. An example would be where I work with a business media firm or a targeted list provider to generate a high-quality list of “hand-raisers” or verified contacts and feed them into a telemarketing or appointment-setting firm. I add value by managing the quality of the list generated on the front end, and by holding the lead qualification firms accountable for a given quantity of qualified leads, as per my client’s specifications. Note: Some of these agencies also serve in a marketing/sales operations role generating incremental leads through tighter integration of the the vendor’s web marketing (SEO, SEM, social media) and CRM functions.
- Pros: Me, and a few others I would trust to do this work the right way. And yes, that is a self-promoting commercial plug. I never said I don’t sell anything on this blog.
- Cons: Everyone else. Ok, not EVERYONE else. But a surprising percentage of people. Truthfully, it’s not easy to deliver high-quality results in B2B lead generation. If it were, you might not be reading this article right now. There are a lot of people with good intentions but still struggle to deliver solid results. And then, to be honest, there are also some snake-oil salesmen and wooden nickel-peddlers. And in that respect, the demand generation business is no different than any other industry or institution that has ever let us down (e.g., all of them at one point or another).
- Cost guidance (I’m not aware of anyone offering this service on a per lead basis): Most of the people who run boutique demand gen agencies have operated integrated, multi-channel B2B programs at the Director, VP, or CMO level. But unless the scope of your project prevents them from working with other clients — in which case you should probably consider hiring a W-2 employee — you probably can obtain this expertise at some fraction of the full market value.
Two notable omissions from the list of resources above:
1) Traditional advertising agencies – In the context of considered purchases in B2B markets, I’m not aware of a traditional ad agency that wouldn’t ultimately leverage one or more of the above resources to generate qualified leads. To be sure, these firms add a lot of value in the areas of marketing strategy, branding, and positioning. I’m not against the Mad Men set – they are brilliant masters of their craft. But if you’re trying to get sales-ready leads to your sales team, and you buy through an ad agency, you’ll likely be paying a significant markup without commensurate added value.
2) Internal lead qualification team – For some companies, it makes sense to have internal pre-sales resources putting the final “qualified” stamp on a lead, even with all of the value that these external firms can add to the process. Soon I will be publishing a write up on when internal lead qualification team does and doesn’t makes sense. Stay tuned!