Golden Leads

First things first. Choosing a source for new leads really means setting your whole program for contacting, developing and closing sales with new customers. You cannot select leads efficiently without having thought through in detail what you are going to do with them. Once selected, your lead list often limits or determines your sales strategy. But that’s not all. There’s another big reason for thinking through all the steps. When you buy leads, you may also be offered other services by the lead vendor. Along with the data, you may want the vendor’s help in selecting, contacting, qualifying or nurturing new leads. Knowing what you want to do – and how much it will cost to do it inside your own firm – is essential in choosing how much help to accept.

Suppose you are seeking one database for your leads, such as Harris InfoSource, which is best known for the depth and breadth of its coverage of manufacturing and technology firms. One decision you need to make up front is how to select the leads. Often, you can start by profiling your best existing customers. Major lead vendors such as Harris, infoUSA, Dun & Bradstreet or iMarket, can do that for you.

They will first match customers on your customer database with their own data on these same companies. Then they rank your best customers by industry, size, location or other information available. This yields a detailed picture of your best customers, which can be translated into selection criteria for new leads.

When industry type is important, Harris VP David Wilkof recommends using North American Industrial Classification Codes (NAICs), rather than the old SIC codes. The NAIC system is much newer and more relevant to today’s markets.

Try to get a source that has several titles and names for each business. “If you are marketing to companies with 200 employees, it is okay to contact the president,” Wilkof says. “But when dealing with much larger firms you probably want to contact functional execs in purchasing or finance.”

The general rule, according to Wilkof: “You are going to be spending at least 50 cents per direct-mail contact, so it is worth getting the information you need to do it right.” In addition to high-tech, Harris has expanded its data to include companies of more than 100 employees across all industries.

Sometimes, there will be no perfect single source. You are seeking helping in finding the right list, along with the list itself. “First, consider the variety of sources that a lead provider can use,” advises Patrick Dineen, VP of USADATA. “Then understand the accuracy and freshness of these sources.” Dineen urges managers to consider many different sources and look for vendors that provide a wide selection. Insist that you be able to pick from all the lists available. “There are hundreds of lead lists out there, from magazine subscriptions and associations memberships to compiled lists meant to be the entire universe of businesses,” Dineen notes.

Then think about the expert service that comes along with the lead data. “You want knowledgeable people who understand your objectives and steer you toward using the lists efficiently,” Dineen urges. For example, if you want to select leads by size, but revenues are not in the data, experts can usually find a proxy, such as employee counts.

Next, be realistic. “No list is perfect,” Dineen acknowledges. A good lead provider knows the accuracy of each lead source offered. Dineen estimates that up to one-third of individual contacts at businesses have been promoted, changed jobs or left the company by the time they are contacted. But to assess accuracy, the vendor needs to understand how you will use the list. “Will you be calling, sending letters and post cards?” Dineen asks. “Or will you email or hire a telemarketing agency?”

Typically, you ‘rent’ a list for one year, with specified uses to be made of it. If you want to use the list beyond a year, be sure that extension is in the contract. However, if you want to use the list for only one quick mail campaign, you may save up to 25 percent by accepting that limit in the contract.

These limits apply to lead data, not follow-ups. “Once you have established a dialogue with a lead, that dialogue is yours,” Dineen notes. “You own the information you have obtained from the prospect.”

Dineen urges that you draft your marketing messages before selecting the lead list. Your vendor may request these drafts to help guide list and lead selection. “You have to make sure the message in your letters or telemarketing scripts aligns with your target leads,” he notes. “If you purchase a list of senior executives, they are going to want short, high-level pitches, not 20 pages of technical arguments.”

You will pay less per lead as you buy higher volumes. So arrange lead purchases at the highest level by having managers buy leads rather than reps. Some vendors will sell to the company, but then let reps and district managers select the actual leads they want. USADATA and other vendors let reps select leads online under a group purchase. This online service can be controlled so that leads cannot be selected by more than one rep.

A good lead provider should be able to ‘de-dupe’ the list, to remove your existing customers inexpensively. This saves wasted contact costs and prevents confusing messages to your current customers.

Suppose you want more than just leads. Instead, you want the true business intelligence that allows reps to understand the market and complete complex sales. OneSource combines data and news on six million executives at 1.7 million companies worldwide. The company integrates information from 30 separate providers to empower your reps to know everything about prospects easily and quickly.

“OneSource pulls together not just the company and execs, but also financial data, spending patterns, industry attributes and the dynamics of each market,” explains marketing VP Yvonne Cekel. This is the heart of selling high-value solutions.

Content is the essential ingredient in every marketing program, and infoUSA has the most comprehensive data in the industry. It’s the only company to own a proprietary database of 250 million consumers and 14 million businesses under one roof. idEXEC, a subsidiary of infoUSA, researches and delivers a global business database that’s available online for use by sales and marketing professionals.

“We give users a powerful browser-based research capability and real-time data access,” says Peter Malamas, president of idEXEC. “Our clients can zero in on the most profitable prospects within minutes and download rich contact data files as well as comprehensive company profile reports.” idEXEC company profiles include detailed parent/subsidiary ownership, corporate financials, company news, plus executive contact and biographical information to provide a complete business intelligence solution.

But suppose you want information about prospects that can only be obtained from the prospects themselves. TECHMAR specializes in delivering, not leads, but qualified opportunities, to sales reps. “That means the contact is the real decision maker. He has the budget to buy your product, and he is ready to buy,” explains TECHMAR founder Tim Young. The company has 350 employees experienced in nurturing leads into opportunities in technology-related markets. TECHMAR’s Karma software program specializes in acquiring, developing and distributing these opportunities to the sales force.

Young advises firms to make sure a lead provider understands their entire sales process, especially for complex, long-cycle sales. “Next, I would want to know if the company has expertise in the market I want to sell to,” he adds. “For example, if you are targeting high-tech, you need experience in high-tech. Dealing with information-technology professionals and engineers is pretty technical.”

Managers should know up front what the lead provider’s true specialty is. Some firms just provide contacts, some firms place phone calls to these contacts looking for a quick sale, and some, like TECHMAR, develop leads into true opportunities over time. For complex sales, all these functions are going to be necessary eventually. “For complicated products, about 85 percent of the time the lead is not going be sales-ready when you first call him,” Young emphasizes. So the big questions are which jobs you want to do in-house and which you want your lead provider to handle.

Another key question may be the technology the lead provider uses. Any database or tracking system must be easily compatible with your own systems for contact management, CRM or enterprise resource planning (ERP).

You may also want a lead provider that knows global markets well. “There are differences between the U.S. and Europe and Asia-Pacific,” Young says. “For example, in Asia and China, faxes are still used extensively, whereas we no longer think about faxes in the U.S.” German executives are still easy to get on the phone, while managers in other European countries can be as hard as Americans are to reach this way. But Germans prefer official titles and no first names, please, in correspondence.

If you are working with a firm like TECHMAR that develops leads into ready-to-buy opportunities, you will pay much more than for just leads. Young recommends that you base payments on some measure of performance tied directly to your rate of return. “Most managers want to pay per hour of work, but I think it should be tied to some success metric,” he emphasizes. “The vendor should be at risk for success.”

Young says his approach works best for complex sales of $10,000 to $50,000. “That is too high to sell through a reseller, but may be too low-margin to sell direct.”

TECHMAR has been nurturing prospects for such firms as Cisco, Hewlett-Packard and Dell for eight years. The company can centralize the handling of raw leads obtained from trade shows, direct mail campaigns and Websites. Or it can procure lead lists from major vendors to suit a client’s market.