The Result Source · “If you have not invested in Tele-prospecting you are depriving your company of a significant productivity tool” Executive Summary Let’s face it. Cold-Calling

Cold-Calling 2.0: The Next Generation of Prospecting

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The Result Source – Cold-Calling 2.0: The Next Generation Whitepaper

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Cold-Calling 2.0: The Next Generation of Prospecting Sponsored By: The Result Source www.theresultsource.com

Written By: Marguerite Mcleod-Fleming Chief Catalyst The Result Source Ph: (416) 366-6222 [email protected]

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“If you have not invested in Tele-prospecting you are depriving your company of a significant productivity tool”

Executive Summary

Let’s face it. Cold-Calling has gotten a bad rap. If you still think of cold-calling as: a waste of time, phone-spam, money-down-the-drain, ineffective? Then this paper is for you. Although the myth is prevalent, we will discuss why it still works – and why it is still one of the MOST effective ways of generating new business. And, we will prove it with examples of companies who have successfully implemented cold-calling (tele-prospecting) and were able to get incredible results. We will discuss the difference between cold-calling in the past and how companies are using cold-calling today as a strategic form of prospecting to open new markets and to generate exponential sales results. There are a million ways to make cold-calling a nightmare, and it’s easy to dismiss it as an effective strategy. But, as this white paper will demonstrate, companies such as Salesforce.com have used these new cold-calling methodologies to generate $50 Million in new sales ($500 Million in market capitalization) within a 10 month period. In this discussion, we will borrow a labeling convention being used for the Internet to describe what has gone on in cold-calling until now Cold-Calling 1.0 (CC1.0). We are labeling what is currently taking shape and what will be needed to succeed in the new business environment Cold-Calling 2.0 (CC2.0). This is not a trashing of CC1.0, but a recognition that we must move beyond historic approaches. In other words, we regard CC2.0 as evolutionary in nature as opposed to revolutionary. We will focus on what it’s going to take to get in front of more decision-makers and accelerate your sales cycle. Some firms are experiencing breakout performance using CC2.0 principles. They are not the beneficiaries of product exclusivity or rampant customer loyalty. Rather, these firms have isolated specific aspects of the buy-sell equation on which to focus and improve. This new paradigm for cold-calling is quickly transforming from outdated prospecting to the fastest and most effective way to generate new sales. While CC1.0 was about lone wolves, product superiority, proven skills, and “making the numbers”. CC2.0 is about leveraging teams and technology, total solutions, and continuous improvement. What cold-calling is,has not changed. How cold-calling is accomplished, is changing radically. In this paper, we will look at strategies and tactics of successful CC2.0 companies and the potential awaiting those who adopt these strategies.

“73% of B2B Technology or Professional Services clients invest in Tele-prospecting resources either internally or in outsourced resources”

SiriusDecisions



Introduction “Customers’ buying processes have evolved in our world of ubiquitous, instant, global communication, but companies’ selling processes have, for the most part stayed the same.” Thomas Stewart, Editor Harvard Business Review, August, 2006 The above excerpt is from the opening editorial of the special Sales Issue of HBR (Jul-Aug 2006). Whether you agree with Tom Stewart or not, there is substantial and, in our opinion, irrefutable evidence, that a significant transformation of the selling process is overdue. M ore specifically, changes in the cold-calling processes are long overdue. The B2B Lead Generation Problem With all the options available for marketing in the business-to-business environment, it’s hard to know which tactics will make the difference and provide that elusive competitive edge. Different experts recommend different strategies, some only web-based, some only event-based, some direct mail. Successful business-to-business companies know that it is imperative to use all strategies at their disposal to attract new prospects. Cold-calling, however, is the only tactic that personally connects with the client and can move leads through the sales cycle at a rapid pace. The Big Picture While evolutionary development adapts to continuous change, it is less useful when discontinuous changes occur (e.g., dinosaurs vs. comets). And there have been and continue to be several discontinuous changes impacting sales: • Global Competition: Advances in manufacturing, offshoring, and compressed product lifecycles all work against periods of large and/or sustained margins. • Speed of Business: Response times have decreased dramatically from weeks, to days, to overnight, to instantaneous 24/7 access. • The Educated Customer: The Internet: Buyers are armed with product information including pricing, customer and industry reviews, technical and other details before ever speaking with a sales rep. In other words, the buyer has gotten a lot smarter and a lot more educated about his/her business. And yet many of the activities of today’s sales processes are still modeled on what worked before these sea changes occurred. Many sales managers still schedule weekly conference calls to “review the pipeline.” Forecasts are primarily assembled and massaged based on Excel, the same application that’s been used for years. Opportunity management too often consists of asking the least useful, but most frequent question: What’s it going to take to do the deal? Sales managers are both doing what was done to/for them and what, in their own experience, worked. While this is perfectly reasonable, it assumes a largely static environment and, of course, that is not reasonable.



Who This Is Intended For 1. Companies with direct sales (or who use channel partners with direct sales models) selling a

product worth more than $10,000 in value.

2. Companies who have sales reps engaged in cold-calling as a means of generating opportunities

3. Companies who are looking to increase their pipeline of qualified leads using cold-calling to generate sales leads.

How Cold-Calling is Used throughout the Organization Before I go further, it is crucial that to distinguish between cold-calling as “Telemarketing” and cold-calling as “Tele-Prospecting”. Telemarketing models are primarily used to gather information and to drive people to events. Examples of this would include: 1. Contact Discovery

• Develops a list of key contacts within assigned accounts for further marketing activities 2. Contact Profiling

• Surveys the account to gather intelligence about potential opportunities but does not attempt to set sales appointments

3. Event Marketing • Drives people to marketing events

Tele-Prospecting models are the most traditional uses of cold-calling and the type of cold-calling we will focus on in this paper. Primary examples of Tele-Prospecting include: 1. Appointment-Setting

• A model of cold-calling to help develop new relationships or increase activity in new markets or for launching new products.

2. Campaign Qualification • Follow-up on recent marketing campaigns, event attendees, or other inquiries to set sales

appointments. In this paper, we will focus primarily on cold-calling as a means to setting sales appointments and qualifying leads. Although the other forms of cold-calling are important and relevant, they don’t have the direct impact on the sales cycle as appointment-setting. As a matter of fact, cold-calling is best used to move contacts into the sales pipeline and to qualify them quickly. Who Does the Cold-Calling In an Organization? Cold-calling in one form or another is conducted by most salespeople and anyone responsible for the sales of their company. That being said, the cold-calling function is moving towards becoming a specialized role within the organization which is performed by a dedicated inside business development rep or outsourced to a cold-calling company. The numbers are quite persuasive. Most outside reps may be able to do 80-100 dials/week where a dedicated resource may be able to do upwards of 250 – 375. This results in outside reps setting a lower number of sales appointments and spending less time speaking with clients. This is due to the fact that they are not dedicated (or sometimes focused) on the



cold-calling function and it becomes a challenge to balance between other responsibilities. Since outside sales reps tend to be an expensive resource, many companies have looked at splitting these roles and having dedicated cold-calling done either internally or through outsourcing. Cold-Calling 2.0—What The Next Generation of Cold-Calling Looks Like Let’s start with a formal definition: Cold-Calling 2.0 focuses on aligning steps in the sales cycle with those in the buying cycle by leveraging technology, process improvement, and sales knowledge to effectively collaborate with the most appropriate individuals (internally and externally) and doing so in the preferred format of each. “CC1.0 looked to technology to allow sales reps to move faster and faster, but not necessarily differently or smarter; in essence the unstated ideal was for reps to become flawlessly performing automatons.” Cold-Calling 2.0 does not necessarily change what salespeople do; it changes how they work to become more efficient and effective. The essence of Cold-Calling 2.0 is: 1 . Increased communication and collaboration between sellers and buyers and within selling teams. The Cold-Calling 2.0 environment is heavily dependent upon technology (including Web 2.0 offerings) to do every thing from routine contact and account management to increasingly sophisticated opportunity management and prospect collaboration. 2. Proactive and visible integration of knowledge and measurement of the buying cycle into the sales cycle. These two dimensions of technology-enabled communication/collaboration and buyer behavior integration, change the way salespeople sell and buyers buy. Improvements can, and over time, will make every aspect of selling, more effective by aligning the sales process to the buying process. We’ve seen companies attain amazing increases by instituting (i.e., introducing, enforcing, and reinforcing) certain process improvements. The following are examples of just a few areas where technology is currently available to enable huge gains and where continuing to sell and manage in an CC1.0 manner will only delay and possibly prevent impressive returns. The differences between CC1.0 and CC 2.0 What we continue to see are companies attempting to increase revenues each year by accelerating the rate and the amount of the things they do—and have traditionally done. The ongoing business imperative to do more with less, to improve quality while reducing cost and delivery times, to increase efficiency and improve effectiveness, has worked its way through nearly all other functional areas. It is now sales’ turn and most importantly the front end of the sales cycle - to be rethought, reworked, reconstituted. To do this will require shining new light into the black box that is CC1.0 and really analyzing how it’s operating. For years senior management has said it’s looking for greater visibility into the sales pipeline. The model of leads into the pipeline and some number of orders magically appearing out the end (“How do they do that?!”) is no longer acceptable. Talk of close rates and sales cycle length will need to be much more rigorous. As initial investments and innovations are made, big increases in “percent perfect” (i.e., 100%) are realized. This is Pareto’s Principle (the 80-20) rule in action. 20% of your effort/investment will get 80% of the desired goal, while 80% of your investment will go toward trying to achieve the last 20%.



Over the past twenty years huge gains in manufacturing efficiency have been realized with the introduction of quality initiatives. Yields are up, scrap is down, and throughput has increased along with essentially every measure of productivity. CC1.0 stands at the very early part of this chart, well to the left, and huge gains with even modest investments and process introductions lie ahead. When we look at how salespeople perform today, i.e. their “sales workstyle,” we often see reps relying on processes that may have served them well in the 1980’s and 1990’s, but do not fit today’s much more dynamic world. It is clear that we need to start adopting “Cold-Calling 2.0”—fundamentally new, more effective ways of targeting prospects, developing interest, creating urgency, quantifying value, establishing competitive differentiation, and building loyalty. Synchronizing Buying and Selling Processes The fact that selling processes are not in sync with buying processes is adding a great deal of complexity and uncertainty to the sales function. CC1.0 tools generally do not provide the ability to capture information about the buying cycle of prospects. Combined with the scenario of remote (i.e., not face-to-face) selling, this leaves salespeople with very little information about exactly where the buyer is in his or her buying cycle. In the Cold-Calling 2.0 world, there are tools available to close this gap. By using technologies such as personal portals, salespeople have the ability to track when prospects start engaging with information they’ve shared. New applications integrate these active alerts and provide a platform to formally capture the next steps in the buying cycle. This gives the salesperson clarity about the information the buyer needs at the particular stage; it also gives the sales manager a basis for understanding the probability and likely timeline of a deal closing. How Salesforce.com Did It. Salesforce.com created a “Cold Calling 2.0” sales development team that netted $50 million in recurring revenue in 10 months (that’s an extra $500 million in market value) Why it worked for them:

• Invested a year of preparation to nail it before scaling

• A team 100% focused on outbound prospecting

• A process that created PREDICTABLE results

• Leveraged the Salesforce.com tools every way possible ( who is “our tools”??)

• Committed to developing its people and expertise

• Earned executive trust and commitment with audited, proven results



What it’s going to take to become a CC2.0 company First and foremost will be Process: Transitioning from Chaotic Cold-Calling to Process Based Cold-Calling under CC 2.0 CC 2.0 empowers the salesperson to recognize, measure, and incorporate the buying cycle into the selling cycle. This enables salespeople to clearly identify the buying cycle, adjust their selling to meet the needs of the prospect’s buying phase, and incorporate prospect activity and buying cycle stage data into building forecasts. The pipeline no longer reflects a one-dimensional sales perspective, but now ties in buyer behavior and activity to more accurately reflect the likelihood of deals closing. “CC2.0 is built upon a foundation of sales process and is guided by a vision of working smarter, not just harder. It is powered by an engine of amazing technology and fueled by information that is accurate, timely, and previously unavailable.” If you can only do 3 things7 We suggest that you DON’T go After New technologies in the search for shortcuts. In our experience that tends to distract people from perfecting the basics first. After the basic and process are proven, then accelerate them with new technology. The 3 areas we suggest you focus on are to separate the core functions of the business so that cold-calling for the purposes of qualifying and nurturing prospects are a different department in the business with direct accountability to the bottom-line results. We also recommend putting a strategic plan in place for that new department and then focusing on incremental improvements as the plan is executed. This is how companies become CC2.0 successes! OK, lets get a little deeper.

1. Separate the Core Functions In any organization, it is crucial to understand the different roles in the organization and developing processes to optimize each stage. These roles include:

• Marketing / Branding

• Demand Creation

• Sales Management

• Account Management For the purposes of this whitepaper, we will suggest that we need to place cold-calling in the sales development silo of activity. Cold-calling in the past has been the domain of either marketing (campaigns, follow-up on events, etc.) or in the sales department (appointment-setting). We suggest a new paradigm that many successful CC2.0 companies have undertaken, which is to separate the cold-calling function as a different department with different metrics and responsibilities.



The Demand Creation department’s responsibility would be to primarily nurture and convert leads to qualified opportunities, then passing them off to the Sales Department. It is as this point that we see companies being able to manage a process that has been difficult to manage in the past.

2. Get a Plan in Place To achieve Step 2 it is important to delineate between CC 1.0 which is all about doing versus CC 2.0 which is all about Process and Knowledge. This involves following what we have researched and found to be crucial steps in the development process outlined in our 7-step framework as detailed below: 7-Step Framework:

1. Knowing Your ROI, Metrics and Benchmark numbers 2. Smart Target Marketing 3. Messages that Generate A Positive Response 4. Cold-Call Process 5. Lead Nurturing Process 6. Tools To Manage Data and Process 7. People and Skill Development

1. Knowing Your ROI If you have a B2C or a very specific product, using Google Adwords is a GREAT marketing tool. It offers highly targeted leads with a good ROI. If you are targeting huge, complex deals worth hundreds of millions of dollars, selling to organizations such as Big Telecom or Government, the best way to get leads is to work with lobbyists and develop other high-profile relationships. Typically, if you sell a very expensive product, you can afford very expensive field sales to sell it, or partnerships with big consulting partners that bring relationships and extensive marketing budgets to the table. If you sell an unspecific product for a few thousand to $100k (like most B2B companies today), you need to be cost-conscious about demand generation and really focus on the ROI of actual programs. But there’s no magic bullet for you. You must work out the numbers with a variety of different marketing programs to really know what works and for what ROI. The benefits that accrue to companies that can accurately forecast future sales and know how much those sales are costing them are true CC2.0 companies. Knowing your numbers intimately results in better resource allocation, improved expense to booking ratios, higher market capitalization on the exact same revenues, etc. Everyone talks about forecasting and improved forecast accuracy but very little has been done about it. Rather than looking at a “day in the life of” a sales rep to determine your numbers, let’s look at the challenges of managing opportunities from cold-lead to qualified opportunity. With very few exceptions, a universal condition for reps is too few qualified opportunities in their pipeline. As a result, reps pursue deals that are less desirable - often to no conclusion. In a recent survey by CSO Insights, they indicated that 22% of all forecasted deals end in No Decision. Starting with simple formulas, you can start to drive metrics that truly help you transform your lead generation efforts to where you get the best ROI.



With Cold-calling, it is not surprising to drive a very high ROI compared with other demand generation methods. To be most effective however, it must be used in tandem with other marketing programs. For more information about how you can start estimating your cold-calling ROI, please visit our website at: http://www.theresultsource.com/systemdesignroi2.html 2. Smart Target Marketing Your marketing team may already have identified target companies based on industry, size, location, and other key demographics. Building your correct customer profile and being able to locate contacts that fit that profile should be the number one task in planning for CC2.0 companies. List building is one of those strenuous activities which tends to lack the recognition it deserves. It doesn’t matter how good your message, system, or reps are, if they are calling the wrong people. In addition to these criteria, trigger-based technologies allow reps to define individual profiles—including behavioral aspects—without knowing the names of specific companies. For example, if two key actions that benefit the positioning of your company’s services are a change in top management personnel and a planned office relocation, these can be defined by your rep. The territory analysis technology then continuously crawls the web looking through press announcements, IRS (Revenue Canada) filings, and thousands of other information sources to assemble the pieces that make a “suspect” a “prospect.” When pre-set qualifying thresholds are reached, the system automatically sends an email notifying the rep of the lead. One large computer company was only looking for an additional opportunity or two per quarter for each of its reps. It did not want the reps’ attention diverted toward countless hours of research; it did not even want them reviewing lots of suspects. The company set high and relatively tight criteria so that only very qualified opportunities were sent as alerts to their reps. The system has paid off handsomely. Other firms seeking broader coverage and more alerts could define multiple alert profiles. Either way, reps are not spending their time doing research and instead are being fed opportunities they likely would not otherwise be aware of. Typically these alerts, if accepted as leads, can then feed directly into the company’s CRM system without the rep having to key in or even cut and paste data to contact records. Of course, the same technology can be focused on named accounts to alert reps to changes, updates, or other triggering events. This is very similar to a traditional clipping service (only faster!); the rep is notified of news items regarding their key accounts. The key point here is that the rep is not personally conducting the research, but is directing the technology to do the tedious searching. This has the tandem benefits of requiring the rep to do more (i.e., higher level) strategic thinking while freeing up the time to do so. 3. Messages that Generate A Positive Response In the CC 1.0 model the overall theme has been - “always be closing”. In an iconic scene from the 1992 movie “GlenGarry Glen Ross”, the cryptic manager played by Alec Baldwin was sent to “motivate” the team. His rant was ABC – Always Be Closing – anything else was for losers. This typified the strength (and weakness) of CC1.0 – the focus on closing a client rather that finding out if the customer was qualified for your product or service.



In the world of CC1.0, the first call typically looked something like this: Discuss the pitch, “Value Prop” and how great your company is for most of the call Success = new Stage 1 Opportunity A call resulting in no new opportunity is considered a failure Next steps In-depth demo or in-person sales meeting to discuss purchasing processes, competitors, etc. In the CC 2.0 model the analysis begins with asking the question “ are we a fit”. The rest of it looks something like this: Brief introduction for context, focus on learning about the prospect’s business for most of the call Success = enough understanding to place them in one of 3 buckets: 1.Good Fit Now (Set Next Step) 2.Good Fit Later (Build an Internal Champ) 3.Waste of Time

Next steps Business Issues & Goals discussion that re-qualifies / confirms the processes and mutual alignment of both sides.

For reps, the issue with developing strong messages was a result of being able to find and translate the value proposition of their company’s goods or services to a particular client need. In a recent survey, more than 70% of firms queried, said that some effort was required to find basic information (e.g., customer objection handling information, competitive analysis, strategic account plans, etc.) in preparing for calls. Of these, one in six said they could rarely find such information. And yet today’s buyers are demanding that sales reps have a higher level of call preparedness. In a research report featured in the Harvard Business Review (July-Aug 2006), it was noted that the level of information available to buyers today via the internet and the changes that this imposes on the dynamics of a call early in the sales process is very significant. The salesperson who understands their prospects’ business issues and can clearly relate how their product/service addresses these specific problems is empowered to fulfill their CC2.0 role. Rather than focusing on speeds and feeds of their offering, CC2.0 tools focus on the best ways to identify the challenges faced by their prospects including what questions to ask them; how to differentiate one’s offerings from those of the competitors and how to facilitate the buying process. To successfully accomplish this shift, salespeople need access to appropriate pre-call planning tools. Filling this need are new technologies better able to deal with both structured data (e.g., industry references, D&B ratings, marketing data) and unstructured data (e.g., PowerPoint presentations, best practices, notes, and histories), from internal and external sources. This entire suite of information can be brought to bear early in the sales cycle to better prepare for sales calls. Examples include previous campaigns the prospect has been exposed to and those they did or did not respond to; prior purchases and current contracts also should be readily available (although 70% of firms report that accessing such information still requires a level of effort than ranges from “some” to “significant”). This is especially true in the early stages of the sales cycle. In this new environment, where early



communication is often not in person, there is a complete absence of physical and obvious cues about the buyer’s behavior and interest level. Prospects can end conversations in seconds if the salesperson fails to grab their interest and attention. Whether meeting face-to-face or remotely, the CC2.0 sales rep needs to be well prepared before each call to quickly establish trust and rapport with prospects. The sales rep also needs to be able to qualify and rank prospects better, ideally based on some objective measures such as website visits, emails opened, etc. Adequate pre-planning activity will prove increasingly critical in the CC2.0 environment. You can build an CC2.0 sales organization today by providing the most relevant support material to your sales team in a timely fashion. This means going beyond simply providing reps with a library of hundreds of documents to sift through. Instead, your CRM system should be able to automatically present the documents most appropriate for this deal at this stage. These documents can be as specific as conversation guides or questionnaires that help salespeople ask the right questions in the right order. The CC2.0 workstyle is about efficiency; pre-call planning and targeted conversations are supported by full-time Web technologies that automatically ”serve up” the relevant information when it’s needed without forcing the salesperson to search for it. 4. Lead Nurturing

80% of all B2B sales happen twelve months after initial contact Lead nurturing is all about having consistent and meaningful communication with viable prospects regardless of their timing to buy. It’s not calling up every few months to find out if a prospect is “ready to buy yet?” Lead nurturing is about building solid relationships with the right people. When you start understanding the concerns that your clients may have in the buy cycle, you are able to help them understand your product or service more completely and help them buy from you – typically faster than letting them figure this out on their own. According to Brian Carroll of InTouch Lead Generation, “Lead nurturing helps people find the answers to these questions and reminds them of the benefits of working with you. You're creating value by giving them useful information in bite sized chunks.” A typical lead nurturing program includes: a series of letters, emails, voicemails, case studies, success stories, articles, events, white papers, and web casts that are meaningful to your potential customers. The duration and frequency will depend on the type of solution that you’re selling and the buying cycle. If there’s a long lead-time, you’ll space out your campaign longer, but will usually want your sales people involved at about six months before a potential purchase. A Typical Lead Nurturing Plan May Include: Day 1: Phone call "nice to meet you" and send email Day 28: Send e-newsletter and leave voicemail to announce Day 42: Email recent customer success story (related company) Day 60: Call from sales person personally invites to seminar Day 80: Mail case study and personalized letter Day 100: Email a recent article of interest link Day 120: Email "touching base" note Day 140: Mail follow-up letter with free report Day 160: Prospect calls you - Qualified lead



5. Cold-Call Process Process Mapping is an essential step to measuring Lead generation ROI.

It's been well documented that the quality of collaboration between sales and marketing directly impacts ROI. The challenge that many organizations face is that their sales process is a black box. No one except the sales team knows what is going on inside the black box until a proposal or sale happens. Worse still, 80% of the leads that go into the sales black box are rarely seen again. I've encountered many companies where sales and marketing do not jointly agree upon or understand their sales process. At the same time many do not understand their potential customers buying process. This makes it particularly challenging for marketers who are trying to measure their revenue contribution and lead generation ROI. Process mapping is a well-known technique for creating a common vision and shared language for improving business results. However, this technique hasn't been widely adopted by sales and marketing departments. In an article, on Six Sigma, by Michael J. Webb, President, Sales Performance Consultants. Webb's article tells how to avoid the common pitfalls of sales/buyer process mapping. "Leaders in both large and small sales organizations often make mistakes that undermine the potential of process mapping. A common result, for example, is that salespeople ignore the process and operate outside the system," writes Webb. CC2.0 companies use process, tracking and metrics to help reps better manage their pipeline and their results. Repeatable processes can often be automated for optimal productivity. Combining processes and technology, CC2.0 companies are able to produce significantly more qualified and timely selling opportunities helps close the gap between marketing and sales. What focus on process can also do for companies is to change the shape of the sales funnel. In CC1.0 models, it took large quantifies of leads to keep passing through the funnel in order to make the sales numbers. In a CC2.0 model, sales leads stay in the marketing funnel longer and are recycled through the process to better match customer buying cycles.



Lead Qualification Focus on Funnel Shape

Qualify opportunities out of the sales funnel early so that time and effort are focused on opportunities more likely to close

The impact of process of Defined Sales Process on finding, hiring and training good people. Finding and training good sales people and good cold-callers has never been easy but today we have processes in place to make successful practices more consistently replicable—don’t we? Short answer: no. After all that has been said and done about sales process and the investments in sales methodologies, a lot more has been said than done. According to CSO Insights, having a formal sales methodology has exactly doubled from 42% of firms in 2004 to 84% of firms in 2007. This is good news for sales training companies and sales process consultants but is it good news? Like so many other things in life what you get out is directly proportional to what you put in—beyond dollars. Since sales revenue is the life blood of an organization, think of sales process as blood chemistry. If your cholesterol is way high you can positively impact this with diet and exercise. Sales Process is Only As Good As It’s Execution However, buying a gym membership, even at a very expensive facility, has zero impact. You actually have to go to the gym and actively (and consistently) involve yourself in exercise to realize any benefit. Talking about, investing in, and running training events or launching sales process programs without active (and ongoing) sales management involvement will yield little or no tangible improvements. More than half of firms report investing $1500 to more than $7500 annually per sales rep in training. Yet only a quarter of reps consistently use their company’s adopted methodology more than half the time—only 10% resolutely (>90% of the time). And while process and methodology are different, these terms continue to be used interchangeably further confusing the issue and clouding the return on investment. Process comprises what sales reps do in pursuing opportunities (e.g., calling to confirm an appointment, setting the agenda at the beginning of a call, asking for the order, etc.). Methodology is an overlay, typically providing a common vocabulary to streamline internal discussions. “This person is the Financial Buyer.” (methodology) This is how I get to the Financial Buyer (process).



Putting it All Together The pipeline metaphor serves another valuable purpose. In addition to being a container of opportunities and a roadmap of milestones for each opportunity’s progress, the pipeline also provides a context for determining what’s relevant. Think of a directory map when you’re at the mall. Once you’ve located yourself (i.e., You Are Here), you can also see what’s nearby, and the relationship between these things. The same is true of deals. A deal at step 1 in the process probably needs some initial benefit statements and proof cases, customer testimonials, and as noted earlier sales knowledge management components like customer objection information, competitive analyses, etc. A deal at step 4 Of a six-step process probably needs more useful proposal templates and/or business case samples. Consider a workflow engine that both suggests and enforces business rules such as “Deals over $100,000 must be signed off by finance and legal before a proposal is sent,” or “Discounts over 5% must be approved by a regional sales director.” Further, when the opportunity is initially defined, the system can parse up the relevant pieces and serve up to the rep appropriate resources. A $500,000 professional services contract for an accounting firm will require different case studies, best practices, ROI calculations, sales and delivery team members than a $5,000/month subscription to a software as a service (SaaS) solution to a manufacturing company. This is the unrealized potential and the ongoing story of CRM over the past two decades. It is also the legacy of an CC1.0 mind-set. Need more revenue? Increase headcount. Need to increase productivity? Run faster, try harder! CC2.0 is built upon a foundation of sales process and is guided by a vision of working smarter, not just harder. It is powered by an engine of amazing technology and fueled by information that is accurate, timely, and previously unavailable. 6. Tools The holy trinity in the Customer Relationship Management (CRM) world for the past decade has been people, process and technology. Starting four years ago, to this triumvirate we added knowledge. “In 2007 the numbers are worse. Won deals have declined to 48% while no decision rates have increased to 22%.” Consultants have consulted upon, CRM vendors have variously promised and cautioned about, sales management and their teams have invested in,better managing these four areas of resource. And yet the numbers continue to deteriorate. Still, with the power of microprocessors growing exponentially, the cost of storage falling at an equally rapid pace and the entire CRM industry reaching some level of maturity after more than ten years and more than a few rounds of consolidation, surely you would think technology is now available to make sense of all this. Think again. CRM adoption peaked in 2006 at 79% of responding companies but has declined for the first time to 67% in our 2007 report. It is unlikely that companies are tossing their CRM systems out—though more than one CSO has threatened to do so over the years—and more likely that this reflects the overall market penetration as participation in our survey increases each year. More alarming than the rate of implementation are the overall user adoption rates in those companies that have CRM. Though better than sales methodology adoption rates, the numbers for consistent use (above



75% of the time) of CRM have leveled off the past couple years at just under 60%. This means four in ten of your sales reps are inconsistently, if not infrequently, utilizing the technology. Whatever the adoption, the impact is of even more concern. Last year one third of firms reported significant improvement on sales performance as a result of CRM’s impact. In 2007 the figure is down to 26%. “Yet only a quarter of reps consistently use their company’s adopted methodology more than half the time—only 10% resolutely (>90% of the time).” Further, the areas of improvement are only partially aligned with the areas marketing and sales management have identified in their objectives for implementing CRM. A key pillar of sales effectiveness is sales knowledge facilitated by the CRM tool. We have identified that there is a significant disconnect in sales reps’ ability to easily access what they need, when they need it. Sales knowledge includes: Customer Objection Handling; Competitive Analyses; Strategic Account Plans; Best Practices used by the Sales Force; etc. To summarize, firms’ sales forces today are seeing a high percentage of new faces as a result of turnover and/or adding new people. These new reps will take roughly a third longer to get up to speed than their predecessors four years ago. Real time and money will be invested training these new reps on sales processes/methodologies which nearly half of your reps will then proceed to ignore half the time. A significant percentage of your team will not consistently use the CRM system in place but of those that do, the most significant area of impact (by a wide margin) will be its ability to help them communicate with YOU. The second biggest impact will be the system’s ability to help with forecast accuracy! The data strongly suggests that most companies are struggling to control and contain their sales organizations. 7. People and Skills The transition here is in taking the product pitching salesperson and turning him or her into the person who can sell. The CC 1.0 product pitching salesperson is focused on presentations that involve selling products and doing deals. The CC 2.0 salesperson builds trust through transparency and honesty employing the art of conversation as opposed to just presentations Elements of the successful rep include:

1. Organization: You know exactly what you need to do every day and then go ahead and do it 2. Passion: You truly care about the company you work for, the product they sell, and in trying to

help your prospects solve problems 3. Constant Improvement: Expertise takes time and effort; perfection is a journey, not a destination.

War for “Good” Cold-Calling Talent When the “irrational exuberance” abated and the tech bubble burst companies were once again looking at laying off revenue producing positions. In 2003, there were 200 qualified sales reps for every genuine sales position to be filled; this was a dramatic turnaround from eighteen months earlier when every qualified sales candidate (even with limited experience) had multiple job offers from which to choose. Since that low point, demand for sales talent has continued to grow. From 2004 (data gathered Q4 ’03) through 2007 (data gathered in Q4 ’06), two-thirds of firms plan some increase in the size of their sales force.



This becomes much more dramatic when you combine this incremental growth in headcount with replacing reps due to turnover during these same years. Total turnover, both voluntary and involuntary, was 49% in 2004 (the first year of things getting better), 38% in 2005 and 35% in 2006. Combined, two-thirds of firms are recruiting, hiring and ramping up anywhere from half to all of their sales force every couple years. This is bad enough but the actual reported performance in this most important resource area— people—is much worse. The time it now takes to get a newly hired rep up to full productivity (i.e., parity with peers) has increased 32% during the past four years. What CC2.0 companies know is that to find, hire, train and get the most out of their employees they must invest heavily in Training and Development. What we have found is that it is a better investment to really train outbound cold-calling reps thoroughly before putting them on the front lines (so they can have constructive conversations). Some training programs last from 4-6 weeks in customer-oriented roles first. What about Outsourcing? Many companies when evaluating their internal resources and capabilities, look outside their organization to outsource the cold-calling responsibility. Questions to ask when considering outsourcing your cold-calling programs:: • Does your organization have a cold-calling competency or is there a desire to develop it? • Is there urgency to deliver qualified opportunities to the sales cycle? • Is there a new product/service which can be managed outside the mainstream sales resources or do I

need to integrate outsourced cold-calling into existing sales processes? • Can I include an outsourced cold-calling service as part of the overall marketing mix to co-exist with

internal resources and provide flexibility?

3. Execute, Measure, Reflect - The Key to Process Improvement Cold-Calling 1.0 solutions focus on helping salespeople do more of what they were doing irrespective of whether it was working or not . Tools were built with a data-management orientation or capturing more data, not for improving performance. They were all about recording data, not about helping to sell more. In the 2.0 environment, this focus shifts to actually enabling reps to change how they work and become more effective. CC 2.0 really is about working smarter. Once a standard is defined and used as the basis for tracking opportunities, meaningful feedback is possible. This is a critical differentiator between CC1.0 and CC2.0. And the key distinction is not whether a sales process has been defined or even systematically adopted; it’s whether sales managers and reps are dedicated to using and improving the process over time. The feedback loop is essential for process improvement. This is precisely what has been missing in CRM systems and their implementation. With regard to sales cycle times, sales management should not looking for cycle times, they should be looking for shorter sales cycles; higher close rates; larger average deal size; etc. They are looking for improved performance, whatever the metric.



“Cold-Calling 1.0 solutions focused on helping salespeople do more of what they were doing irrespective of whether it was working or not” Reporting has been the weakest link in most systems. Some sales managers have not spent the time or energy to translate their meaning into coaching – and the results in rep performance has mirrored this lack. Still, many managers have persisted and had great results to show for their efforts. For feedback to be meaningful, it must meet five tests. 1 . Relevant: Many managers offer insights based on what worked when they were selling, rather than on current performance metrics, market conditions, and customer expectations. 2. Timely: Quarterly, or worse, annual performance reviews are meaningless in terms of coaching. The shorter the interval from performance to feedback the better (think videotape of your golf swing). 3. Individualized: Quoting averages when discussing individual performance has no impact. OK, the sales force call activity is down 20%. Are we done here? 4. Accurate: Without accurate performance measures everyone is arguing their opinion. You think I could try harder, but I’m telling you I’m tapped out. What do you want from me—blood? 5. Consistent: Last month it was calling higher in the decision-making chain; the month before that was time management. What’s this month’s special? The idea is to agree upon specific, high-leverage metrics that, if improved over time, will have high payoff for the individual. What you’re looking for is higher performance and lower variation in that performance (i.e., increased consistency) over time. This is also the basis for first identifying and then sharing best practices across the sales force. Top Cold-Calling Mistakes There are 6 common misconceptions when it comes to evaluating cold-calling programs which we must discuss. Companies who endeavour to become CC2.0 companies need to be very realistic and very patient to see the exponential results that CC2.0 brings. Some key mistakes In descending order are: 6. Expecting instant results

• It can take 2-4+ weeks to develop a qualified opportunity 5. Long emails

• Can someone read and respond on a BlackBerry? 4. Going wide, not deep

• Hitting 100 accounts once instead of 10 accounts 10x each 3. Giving up too quickly at Ideal Targets

• Don’t give up on working to understand if there is a fit or not until you get a “no” from the rea decision-maker

2. Wasting time marketing to non-ideal targets

• These wastes of time are a huge opportunity cost 1. Depending on activity metrics instead of a proven process

• “Dials per day” is meaningless. What’s the ‘assembly line’ process?



Conclusion CC 2.0 empowers the cold-call rep to recognize, measure, and incorporate the buying cycle into the selling cycle. This enables salespeople to clearly identify the buying cycle, adjust their selling to meet the needs of the prospect’s buying phase, and incorporate prospect activity and buying cycle stage data into building forecasts. The pipeline no longer reflects a one-dimensional sales perspective, but now ties in buyer behavior and activity to more accurately reflect the likelihood of deals closing. “CC2.0 is built upon a foundation of sales process and is guided by a vision of working smarter, not just harder. It is powered by an engine of amazing technology and fueled by information that is accurate, timely, and previously unavailable.” Where do you want to go? For more information about how to become a Cold-Call 2.0 company, please contact us for a free consultation at: [email protected] or call us at 416-366-6222.



About The Result Source: Based in Richmond Hill, Ontario (Greater Toronto Area), The Result Source has been serving our clients since 2001 with innovative sales and marketing solutions. We work primarily with business-to-business companies to increase their sales by optimizing their lead generation processes. We focus on cold-calling as a strategic means of lead generation, but we believe that cold-calling is exponentially more successful when it is part of a strategic marketing plan involving many marketing tactics. Consulting Services Cold-Call Fast Start Bootcamp Inside Sales Program Design Go-To-Market Lead Generation Strategy Coaching Gold Cold-Call Skill Development, Program Design and Team Management Personal Training Acceleration Platinum Coaching Programs for Business Owners and Managers Training Cold-Call Training Programs Training Programs for Business Owners and Managers Outsourced Services Business-to-Business Telemarketing Programs Quick Start Programs Recruiting Services Public Speaking



About The Author:

Marguerite Mcleod-Fleming, President

Marguerite Mcleod-Fleming is the President and Chief Catalyst of The Result Source. In operation since 2001, The Result Source helps companies get in front of more qualified prospects through her sales consulting and appointment-setting services. Marguerite has worked on over 100 programs with local and international companies. During this time, Marguerite has defined a new approach to the cold-call process development and delivers seminars and Bootcamps to organizations to build sales organizations that consistently deliver high-quality results. She has recently auhored the Cold-Calling 2.0: The Next Generation of Prospecting Whitepaper which is available at: www.coldcall20nextgen.com.

Marguerite is a graduate with Honours from the MBA program at the Schulich School of Business, she has an Honours B.A. from the University of Toronto and a Certificate of French as a Second Language from Laval University in Quebec City.

Documents

The Result Source · “If you have not invested in Tele-prospecting you are depriving your company of a significant productivity tool” Executive Summary Let’s face it. Cold-Calling