Since so many firms try to do lead generation in-house, it is useful to share some facts from NNC Services white paper. (Click the link to see the original post.)
There are some challenges and problems with in-house lead generation:
- Lack of follow-up on events and telemarketing — in-house resources are rarely, if ever able to follow up on a consistent and effective manner.
- Feedback from the market is not used - A deep understanding of customers is needed for effective demand generation. But in-house resources almost never do the level of research needed for optimal results.
- Incorrect targeting — Not talking to the right level means poor results. However, most in-house resources stop their research when they find an interested executive. Often this executive is a dead end.
- Using a unique channel - This is one of the biggest problems with in-house demand generation. They tend to rely on single tactics, such as email campaigns or telemarketing. Since everyone else is doing the same thing, there’s too much noise to be heard and few leads emerge.
- Leaving it to the team’s junior - Leaving the activity on the sales team’s newcomer is one fatal mistake since the time spent in inappropriate meetings with the wrong prospects often results.
If there are problems with doing demand generation in-house, what are the advantage of bring in an outside firm like Find New Customers?
This white paper makes the point that you do not get more leads from outsourced demand generation, but you get much better leads that are likely to close. After all, closed business is what we all need.
Here is why:
- Clear client profiling. Lead generation experts use multiple methods to find out every bit of useful information about a prospect and to draw out a complete picture: likes/dislikes, need and behaviors. These specialists also understand how customers buy, so they translate your selling process to the customer’s perspective.
- Correct Targeting. Outsourced experts ensure you talk to the person(s) who make the buying decision — through deep research.
- Qualified Leads. You don’t waste time on a meeting with someone who hasn’t expressed a clear need for your products or services, or who lacks the budget to purchase them. You only get meetings with people who understand what you are selling, need it and can afford to buy it.
- Follow-up and feedback. All opportunities are followed up until they become qualified leads or are determined not to be valuable. Also, the outsourced lead-gen team has the ability to use market feedback to get more leads.
- Multi-channel approach. A good lead gen partner will use a complex mist of lead generating channels — including networking, online and off-line, as well as social networks. This significantly improves the results of the campaigns.
- More confidence. It takes 6 months to a year to consider if an in-house team member is qualified and producing results. By comparison, you can usually evaluate an outsourced lead generation resource in a month or two.
Conclusions:
An outsourced lead generation partner can can deliver better sales leads than you can, at much lower cost, with reduced risk and increasing your opportunities for improved fiscal results. 3 months of lead generation outsourcing brings you the same results as 12 months of in-house lead generation.
Jeff Ogden, the Fearless Competitor, is President of Find New Customers “Lead Generation made simple” and author of the famed white paper, How to Find New Customers. He’s been called the guru of lead generation and Find New Customers helps businesses execute lead generation programs to excel at acquiring new customers.
Would love to see the white paper you refer to so could you include a link in the post? Been doing this 27 years and I have rarely seen a vendor deliver better results than an in house team.
Lots of reasons to outsource but consistently better results is not one of them. I have nothing but respect for the vendors we partner with but to say they deliver better results in 3 months than an in house team can in 12 is a fallacy.
Sorry Jeff but our opinions diverge on this one!
Thanks for the comment, Trish. The point in the blog post is to let the professionals do their jobs. Regardless of the approach, structuring and training an in-house team or bringing in the expertise of demand generation experts — the key is to use that expertise and not try to do it yourself with a junior staffer.
The “facts” regarding in-house lead generation are assumptive at best in that whitepaper. A well aligned and managed lead generation team and their processes coupled with people that posses industry/market/domain expertise will succeed over an outsourced team always.
You make a good point, Jeff, but I find that argument a bit specious. You say a “well-aligned and managed lead generation team with processes and people with expertise” The problem with that argument is that most firms don’t do lead generation that way. The data compiled by CSO Insights is damning. That’s why companies need to bring in outside experts to help them craft the processes and content to do lead generation the right way. Things like universal lead definition and customer insights get short shrift in in-house teams.
Thanks for your comment.
Curious how you can say I make a nice point then say my argument is “specious” in the very same sentence…..That seems ostentatious doesn’t it?
We are saying the same thing in the end. Invest in the right people, develop the right tools, process and metrics for management, don’t be afraid to iterate and success will follow.
No harm intended, Jeff. I said “a bit” specious. But you’re right. We say the same things. Invest in the right people, tools, process (content) and metrics.
My only point is that a tiny percentage of businesses have the expertise to do that all by themselves. One of the main reasons is that they see the same things everyday, while outside experts can draw upon the experiences of many firms.
Hi Jeff,
I disagree with you on this one. The entire argument rests on the suggestion that external telemarketing people are more competent than internal people. This is not a universal truth but something to be judged one firm at a time.
-Kevin
Nothing I love more than a rousing debate! Thanks, Kevin. But the point I see is that most firms do not have the in-house expertise to create the processes and content to drive good lead generation programs. Companies tend to hire a person or assign a junior level staffer — and they don’t do the research needed to understand buying personas.
I think the issue goes far deeper than who dials the phone, Kevin. It goes to the whole process. That’s why you need experts.
I think that the issue of inside vs outsourced lead telemarketing really comes down to the internal companies’ experience and competency in managing a tele-prospecting function (the people, utilization of the technology and on going management process). I would tend to agree with Trish B particularly in the inside sales selling function. Having worked with a major Fortune 500 telecommunications company in lead generation, they did not have the skills, experience and management to drive a productive tele-prospecting organization.
The key is finding a high quality vendor that is aligned with your business objectives. Some areas that I believe the pros do better;
Recruiting and Training. This function tends to have high turnover requiring constant recruiting and training, which I believe that good outsourced vendors tend to do better.
Headcount Flexibility: Another major benefit was the increased head count flexibility of an outsourced vendor. We could increase and decrease resources as needed. Adding headcount in today’s economy is frequently a very difficult task in major corporations.
We worked with the same outsourced vendor for over 8 years who was able to deliver outstanding results on a consistent basis. They became a strategic partner with our company and we saw year over year increases in both productivity and lead quality.
Based on my experience, I believe a top quality outsourced vendor can do teleprospecting better than most internal operations.
Thanks for the thoughtful response, Denny. You raise good points.
The ingredients for doing tele-prospecting and tele-qualification well are the same whether outsourced or in-house. Both can lead to outstanding results. What an outsourcing company potentially brings to the party are certain economies. When they investigate and implement sales 2.0 technologies for inside sales or lead gen teams, for example, they are usually able to spread that cost across a far greater headcount than most companies can. They can also recruit significant experts to manage these operations. Where the HR department for a software company must recruit a wide variety of people, the outsourcing vendor highers and trains a disproportionate percentage of phone reps and so can specialize in this type of recruitment, making better selections more consistently. Most outsourced firms also locate in an advantageous labor market (Boston and the Silicon Valley, where most technology firm area, in contrast, are very high cost labor markets). These vendors also have well-thought out processes for inside sales and lead generation activities and can make minor modifications for a given client quickly and cost effectively. I could go on and on about the potential advantages.
Of course, these advantages don’t always mean a client will receive superior results, primarily because those clients who look to outsource functions often do not make the necessary investments in the outsourced partner that would lead to superior results. Instead, they invest for reasons of speed, cost, or flexibility. Most importantly, clients do not invest in the considerable cost of truly integrating the outsourced vendor into client operations, especially sales operations.
And some vendors definitely use their economic advantages to increase their own margins while delivering a mediocre service.
Good post, Dave and I agree 100%, especially with your point about not getting results because they do not make the necessary investments. And it is not just money, but deep thought, discussion and planning. They do need to integrate the outsourced vendor in the client operations, especially sales. Well said.
The biggest question a company has to ask themselves is; can we rely solely on our own lead generation efforts to meet our sales, profit, and growth goals? One of the biggest mistakes I see companies make is casting too narrow a net when it comes to their in-house lead generation efforts. Employees charged with the lead generation efforts for their companies often take their target market and get laser focused on people/companies who fit the exact demographic for their products/services. This narrow net may exclude hundreds or thousands of prospects who may be a fit for their company’s products/services.
There are certainly benefits to both in and out of house lead generation efforts. Whether the lead comes from the in house or outsourced lead generation program a company has to have the processes in place to follow up, track, and monetize each and every program they use. If a company is using pay per click, trade shows, or other lead generation programs there has to be a positive ROI when all is said and done. I have many conversations with clients who tell me 3-5% close rates don’t compare to the close rates of other programs they use and they will have to find another way to generate leads. When you ask about the ROI and how it compares to the ROI of the other programs they often can’t provide an answer. If one program at 15% close rates is providing an ROI of 105% and another program with a 5% close rate shows an ROI of 150% which one is better performing? It all depends on which metric drives more for the business.
How many times have you been to a trade show and seen people scanning badges or taking business cards from anyone and everyone who walks by a booth? How many clicks from Google does a company drive to their site and have the visitor there for less than 30 seconds and then have them leave? Does that full page ad in a trade publication really generate leads? All questions I have asked and had marketers say “Well I have to be there because my competition is doing it so I have to.” I have seen clients not attend trade shows and had their results up or down at the same rates as their competition. Google will tell you that you should be spending on every key word for your industry not because it’s going to impact the marketer’s bottom line, but because it creates revenue for Google. Print advertising is great for branding but, will your company ever be Coke, Xerox, or Kleenex? Probably not.
At the end of the day, marketers need to spend their budgets smarter. Many outsourced programs provide companies the opportunity to try something for a short period of time and within a budget. If a program doesn’t work they can move on and try something else. It’s more about finding the right mix for your lead generation efforts than whether you should stay in house or use outsourced programs. There are no silver bullets – especially in today’s economy.
Interesting posts by all. Does anyone have examples of competent outsourcers for this type of service? Thanks, Todd
Thanks for the reply, Todd. Two great vendors who provide outsourced lead generation services are Green-Leads and InTouch. Green-Leads provided B2B appointment setting services and InTouch provide lead nurturing services. Good luck.