B2B Lead Generation – Is Telemarketing and Cold Calling a thing of the past?
With over 13 years of experience in B2B sales and marketing I am always very interested in ideas about how to increase new business and revenue in the most cost effective manner.
When I started my first ever job (New Horizons Computer Learning Centres) we used to have to make 60 cold calls before 11am, the data was from various (photocopied) sources, but mainly the good old yellow pages and other business directories. We would hope to get 5 qualified leads from 60 calls, from this - hopefully 3 of those would convert in to a meeting. Ideally we would then want to have 5 meetings to get 1 sale. Therefore you needed to make 20 calls to get a qualified meeting and 100 calls to get an order. So if you made 100 calls a day you should have got an order a day! As we know, new business sales is all about the ratios and numbers. In every B2B sales and sales management role I have had since it has always been the same and still is today - it's all about the numbers.
So what has changed in the last 13 years?
The obvious and most relevant answer to this is the internet, this has changed the way a lot of consumers access information and more importantly research and buy products. It is completely normal now to buy your groceries, electronics, holidays and I have even bought and sold cars online. So what...
Why is this relevant to B2B lead generation?
I believe that the way people buy (and more importantly research) products in their personal lives influences their behaviour, habits and methods that they will use to perform similar tasks in the workplace.
So the theory is that if a business purchasing decision maker researches buying a car online and maybe even makes the purchase then why would they do any different when researching a new printer, CRM solution or IT network.
In our experience most companies who sell in the B2B arena are not leveraging the opportunity search marketing offers them, as they are always doing what they have always done – COLD CALLING to generate new leads as the main part of the marketing mix. Why not collect a lead from a decision maker who is researching your services or area of expertise? This sounds easy, but unless you are number 1 for a natural organic search for all the services and products you offer, it's not that easy.
We are fortunate that we have some research to give this blog a bit more substance. One of our clients, let's call then ACME ltd who provide software and services to businesses and normally sell to the MD, FD and marketing. They traditionally did a mixture of marketing activity to generate new leads, cold calling, advertising, trade shows, referrals and some search engine marketing. Recently they made a decision to focus a bit more on targeted lead generation via cold calling, they bought some good data, sorted it in to groups of target suspects and assigned this to an outsourced cold calling agency. They initially wanted 2 days a week of calling and in return the agency had said they would get at least one web demo/meeting a day. The agency have hit all their KPIs and delivered on the number of agreed demos/meetings. We then decided to compare this against the performance of the Paid Search (PPC) campaign, which coincidentally they were actually spending the same on both £1500 a month.
As we know it's not just about activity – or meetings and clicks – it's all about conversion into sales.
So what happened...
On face value on numbers of orders you would assume PAY PER CLICK for B2B lead generation beats COLD CALLING. However, as with all good statistical analysis the devil is in the details.
In summary they both delivered a similar sales revenue result over the test period. Arguably the Cold Calling is more profitable as ACME Ltd only have one client to manage as opposed to 8. Other interesting points to note are that the sales cycle was a lot shorter with the PPC leads and was less than 2 weeks as opposed to over a month with the Cold Calling. From our limited research it suggests the best solution is probably a blend of both. Cold Calling is essential to target the known suspects and convert them into prospects and customers. It is also advisable to have a targeted and focused PPC campaign to pick up any extra business from people looking for your services. This is something we have found a lot of B2B companies do not have and are not exploiting. Selling to people who are looking is easier than convincing people to buy things they never even knew they wanted - Happy Hunting!