Leading Strategy

Here are the four essential functions of a sales unit: acquire, service, retain and grow business with customers. That seems simple enough. So let’s get bogged down in the basics. It is in the acquisition stage that leads and prospecting count. Prospecting in turn may be divided into the four p’s.

Under the first p, you must always profile your current best customers. What market segments are they in? In what lines of business do they engage? What is their size? These and other characteristics will tell you which firms you sell to best in terms of closing rates. The profiles also will tell you where – when you do close – you get the most volume, revenue and profits.

Under the second p, you apply the profile to the population of firms or contacts in the lead database. Often, you will want to drill down to the county level. Sometimes location will determine how costly it will be to close a sale or whether a sale is possible at all. These practical considerations should count heavily in your ranking of leads. In addition, lead vendors sometimes charge per lead, and you do not want to pay for contacts you are unlikely to close.

Under the third p, you prioritize all leads. This means you rank the leads according to the criteria you determined to produce the highest sales or highest closing rates. Prioritizing new leads is what makes sales efforts efficient. It lets you focus your most expensive resources – the on-site contact by reps – on the best prospects while you use lower-cost methods to contact less-likely, less-rich or less-qualified firms.

The fourth p is – or is supposed to be – profits. This is just a reminder that everything you do with lead management, as with other sales functions, must maximize the spread between revenue gained and costs expended. Higher close rates boost revenue, as do higher sales per close. Less money paid per lead can cut cost, but that economy is usually less important than saving money on qualifying and pursuing leads. The trick is to combine the strategy, the process and the lead sources that will boost overall profit margins.

For companies that need deep and current information on their customers, there is a new and robust source of global information. Factiva, a five-year-old joint venture of Dow Jones and Reuters, launched Salesworks in January 2005. The new tool takes its company profiles from Dun and Bradstreet and other best-of-breed providers and combines these with rich business news from The Wall Street Journal, Barron’s, Standard and Poor’s, Hoover’s and about 9,000 other news and analysis sources around the world. Salesworks offers reps an easy-to-use interface for finding prospects and finding out as much as possible about both new leads and current customers.

A lot of homework lies behind the new venture. To develop Salesworks, Factiva researched the needs and daily tasks of sales reps as well as reactions from CEOs. In the survey of CEOs, which was conducted in partnership with Ball State University, Factiva found these top execs thought 75 percent of the first sales calls they received were a waste of their time. The CEOs said the calling rep simply did not understand enough about their company, their company’s competition or even the CEO’s own role in the company.

Factiva set out to change that, building on the resources it already owned or had developed for its business-research work. The aim was to tailor the best sources of business information around the world specifically to the challenges that salespeople face. Because Factiva’s own clients are global, it went after the best information providers for each market or country where business-to-business selling was significant.

Factiva’s databases now contain about a million businesses around the world, according to Product Director Kathleen Delaney. Any business in the United States with more than $5 million in annual revenue or 500 employees is included. Outside the United States, the cutoff is slightly lower, $2 million in revenue and more than 200 to 300 employees.

The front end, or user interface, is also streamlined for busy reps. Salespeople can select their best prospects by screening for product types, geography, size or a number of other factors. Once you have your list, the best news sources in the world are at your fingertips. Factiva has on tap major business publications, such as Financial Times, plus thousands of highly specialized trade publications and expert stock analysts. “No one can touch us on the quality and amount of information we provide,” according to Factiva’s Chief Marketing Officer Alan Scott.

Factiva pulls the latest financial data on nearly 29,000 companies around the world from the Reuters Fundamentals database, and updates the data daily. Reuters’ reporting on significant developments on US-listed corporations is also updated daily. Dun and Bradstreet provides the company profiles for firms outside of Europe and Japan, with each firm identified by its own eight-digit standard industrial classification (SIC) code. In Europe and Japan, Belgium’s Bureau van Dijk brings in another half-million companies.

Indeed, there is little you cannot find easily and quickly on Factiva. Trying to track down all of these data sources on your own would be an immense task, essentially impossible for time-pressed sales departments. You can do it all quickly on Salesworks, however. Delaney notes the Salesworks user interface was modeled after Google to be very simple and clean. Once you know the firms you want to track, you can ask Factiva to give you automatic email alerts whenever these prospects change execs or introduce new products.

Salesworks supports the sales process in four basic ways. First, it keeps the prospect pipeline filled with realistic sales opportunities that are qualified on the basis of the best information available. Second, it helps reps and managers save time, by getting the right data quickly, without wasteful search efforts. Third, it helps build relationships with existing customers by keeping you abreast of important developments at these companies or in their markets. Fourth, all of these data may be smoothly integrated into your own existing information systems. Factiva sells a developer’s kit that allows clients to integrate Salesworks with their customer relationship management (CRM) portals or sales-automation systems. Factiva can help with the integration, or clients can let their own information departments handle the job.

Factiva prices Salesworks according to client’s needs, charging per user. You can pay for companies in just the region you need – for example, in the United States rather than the whole global database.

Kate Baar, marketing director for Hitachi Consulting, helps companies with both lead management and CRM implementation. Hitachi has worked with all the major CRM tools, including SAP, Oracle, Siebel and PeopleSoft.

Baar says leads should be treated differently than prospects in CRM, but she believes even raw leads should be somehow included in the CRM database. “Before, leads would often disappear into a black hole,” Baar says. “But now you can track them from inception to close or final disposition. You can measure them and have visibility throughout the entire process.”

A good CRM system will keep raw leads separate from true sales opportunities. “You only want leads that have been proven and qualified [to be] treated as opportunities,” Baar argues. “But you do want a way to track all the leads without management getting into the sales reps’ shorts.” She thinks rules can be developed that let reps themselves determine when leads become fully managed opportunities.

The key is defining categories based on closing percentages. For example a stage-1 raw lead would not be treated as an opportunity. Stage-2 leads, estimated to close at a 20 percent rate, may or may not be an opportunity. Stage-3 leads, with an 80 percent success rate, obviously would be tracked as opportunities in the CRM database.

Executives at InfoUSA also know that different users have different information needs. The company’s OneSource product integrates business information from more than 1.7 million public and private companies and puts it in a relevant format for sales and marketing tasks. In the past, this service was targeted to large organizations, but today OneSource offers business content to organizations with dozens, as opposed to hundreds, of sales and marketing people. OneSource combines and organizes content from more than 2,500 information sources supplied by more than 35 world-class content providers, so you get ample research, competitive intelligence and other revealing data – all in once place.

To pounce fast on new businesses you have to get there first. American City Business Leads can get you names and often contact numbers for new businesses in many cities around the United States about as rapidly as humanly possible, according to Marketing Director Kent McKinney. The firm publishes more than 40 business journals and is constantly checking county courthouses for new business licenses, as well as state incorporation and other filings. American City compiles the data and emails the latest new leads to subscribers each week.

The new leads do not cover every city, and may not have all the data you want, but the information is fresh. McKinney says it is most useful to reps who sell broadly to many kinds of businesses and want to get in at the start-up. For example, firms that sell office supplies, furniture and equipment, credit card machines, security services, communications, payroll or accounting services all need to find new prospects fast and early.

Overall, American City finds 43,000 new-business prospects each month. “We cover about 40 percent of the US, and in most cases you get a phone number,” McKinney says. “We don’t have SIC codes, but you can often tell the type of new company by its name.” In other words, the information is far from perfect or complete, but it is very fast.