Can you tell me a little about yourself, Sridhar?

Sure. I was with HP for about twelve years with my last job being head of marketing for HP Managed Services (outsourcing) business unit, $1B+ when I left. I went on to found Pacifica Group, a boutique marketing firm seven years ago. We often play interim Chief Marketing Officer or VP Marketing, and in recent years been asked often to hire and manage telesales firms.

What is “telesales” and what are the different types of outsourced firms for lead generation?

• Telesales or Inside Sales is actually closing deals over the phone
• Teleprospecting is outbound contacting to find qualified buyers.
• Other types include custom list development houses, profilers who deliver contact names and some details about them, inbound telesales firms handle customer phone calls for sales, and direct marketing agencies do campaign and response management.

The key is being clear on your business objective. What do you really want from this relationship?

Why do some of your clients choose to outsource telesales?

• Expertise – most of our clients already had employees doing this function in the past but come to conclude that the inside sales and/or teleprospecting was so important that they knew they had to hire experts on this "mini business process" rather than trying organically to figure this out. It's the exact opposite of the mantra to focus on what's important and outsource rest. Most firms see that running inside sales etc is a very different animal than direct sales and demand generation.
• Speed - there's no faster way to get qualified leads delivered to sales than to engage a firm that already has all the people, training, tools, database, process, etc in place and the only lead-time is ramp up on specific product knowledge. Trying to do this organically will take a minimum of 6-9 months.
• Executive bandwidth -most VPs of Sales and Marketing already have plenty to do just to deliver sales, leads, and brand awareness. Every client of mine that concluded that outsourcing was the way to go decided that they just didn't have the bandwidth or desire to manage this function well.
• Reporting - one of the big drivers here is data or information. Most clients don't have near the sophistication as a professional teleservices firm would to provide incredibly detailed and actionable data on the health of the telesales process/function. So clients see outsourcing as a way to better manage to a service level agreement (SLA) and to better support them in providing the executive team with measurable ROI that they wouldn't otherwise readily get. And lord knows they don't want yet another IT project to deal with.

What should you have ideally ready before engaging a telesales firm?

Doesn’t have to be perfect but the following are very very helpful in making the relationship effective. A good telesales firm will actually help prepare these:

• Detailed description of the target decision-maker and company demographics
• Statement of the problem or “pain point” this person/organization faces
• Unique value proposition you deliver to this person/organization
• Roles/responsibilities spelled out to minimize confusion
• Measurable objectives for what you hope to achieve
• Definition of a “lead” – use Brian’s universal lead definition
• How you would score a lead – hot, warm, cold, or 1-10 scale, etc.

What criteria should companies use when hiring a telesales firm?

• Skills/knowledge of the agents (specific domain/industry knowledge, etc)
• Selling style of agents (e.g. consultative vs. transactional)
• Process (closed loop process from lead generation to lead handoff to sale)
• Team chemistry – would they blend in and become part of your organization?
• Customer references – how long have customers retained firm? Why?
• Management team -- does the firm have managers/execs that have held operational roles in sales/marketing, what is their track record?
• Value for money – lowest price isn’t always the best way to go because you get what you pay for. Compare monthly pricing at given service level.

What are some of the pitfalls to avoid in this relationship?

• No explicit agreement on the definition of a lead
• Exclusive focus on cost per lead
• Lack of feedback in both directions—quality of leads delivered to sales, quality of the value proposition, messaging, and quality of the list for teleprospecting
• Lack of follow-up – did sales act on leads delivered? Did telesales contact all? Infrequent communication and rep training

What are some practices that you’ve found very effective?

The flip side of above:

• Living, breathing lead definition that evolves over time across the whole team


• Use of several performance metrics; I’ll cover more on that later


• Quarterly team meetings with entire staff to exchange ideas on what’s working/not working, changes to script/message, get coaching, etc.


• Listening to recordings (or better yet sit in on live) callouts and offer coaching


• Find out from telesales reps what is really resonating and not resonating with customers—adjust your marketing message dynamically

What are some success metrics that you’d use to evaluate effectiveness?

You want to measure things that will help you check the quality of your customer lists, the strength of your selling proposition, the effectiveness of the agents, the sales reps, and the end-to-end process. Some suggestions:

Quantitative ones:

• % of dial-outs that result in live conversations


• % of live conversations that result in sales ready handoff (e.g. booked appt)


• % of booked appointments that are actually completed


• % of sales handoffs that are returned for re-qualification


• % of sales handoffs that result in closed sales

• Teamwork across the whole sales, marketing and telesales staff


• Flexibility – how quickly does the team/process adjust to improve performance?

Any parting thoughts?

View this truly as a partnership, collaboration. I know it sounds trite but think of telesales firm as literally part of your team. You don’t distinguish their staff from your own employees in sales and marketing. Ultimately, the higher the level of collaboration, the better the resul

Sridhar--

I think the most interesting part of this dialogue is that no mention is made of technologies, only the appropriate allocation of personnel and processes.

As a corporate trainer for a hosted CRM and lead management software system, I'm obviously a firm believer in technologies that can facilitate much of what you have described, but it's shocking to me how many clients--even some of our larger clients with established business models--do very little homework when they begin setting up an inside sales initiative.

The best technology in the world is not going to save a project from failing if the people and processes that are its backbone are poor.

Posted by: Steven R. Watts | May 1, 2008 3:35 PM

Its really an informative post.It sounds really good.

Posted by: Sales leads | May 7, 2008 1:42 AM