Fishing for leads

I was recently asked a great question at a business networking event: When planning your marketing efforts, should you cast a wide net to find lots of leads, or a narrow net to find highly qualified leads?

Oddly enough, I was (and the operative word is ‘was’) a huge proponent of “spray and pray” marketing. This strategy called for casting as wide a net as possible to catch many fish and then sift thru the fish throwing away most of the trash until you find the “good” lead. The strategy has played out well for the past 20 years – though the method by which we caught fish has certainly evolved.

At the beginning of my career, we used cold calling for almost all marketing initiatives. Sprinkled in were direct mail pieces (anyone remember those) that helped pave the way for cold callers to follow up with the targeted lists. Tradeshows and specifically niche tradeshows help narrow the audience somewhat. Emailing marketing and PPC campaigns again called for broad coverage of the marketing message to drive respondents to web landing pages and then sorted by quality of lead passing only the warm leads over the sales team.

The issue of course is that in 2008 no one returns calls from people they don’t know. No one reads direct mail. Customers hardly attend tradeshows. Spam filters and junk mail boxes store all the email marketing campaigns. Even PPC campaigns have gotten out of control. VOIP has a PPC cost on Google of $4.71. The cost then based on a 3% conversion of Google would be $157 for a qualified lead. With a 1% conversion (more likely) the cost is $471. It is easy to see how $20 billion is being spent on online marketing.

Let’s take a lesson from an unlikely teacher – cyber criminals. Botnets were originally cast among millions of users. The results were excellent at first causing electronic catastrophes such as Michelangelo and the I Love You virus. But no one other than the virus companies really benefited from these wide botnets. In recent years however, the cyber criminals have turned their attention to targeted attacks. Rather than a wide net they are sending hundreds of emails to a specific target in the hopes of a few emails getting thru and converting to a botnet. These localized botnets are extremely valuable and the spammers are generating huge revenues in these attacks from identity theft, corporate espionage and spam networks.

Using this as an example the ideal way to execute your marketing program would be to (a) get extremely detailed and specific exactly who and what is your target (b) what your ideal success would look like in terms of a deal (c) what you are willing to spend to generate that lead and (d) how many of those qualified leads are you looking to generate. The cyber criminals are successful and will continue to be successful not only because they are diligent in targeting their prey but moreover they are constantly trying out new ways to drive the success rates of their campaigns.

Recruiters tend to use a similar targeting approach when searching for a specific candidate. They get extremely detailed on the characteristics of the ideal candidate, the background, experience, accomplishments and of course compensation. They then target those individuals in their network that meet those criteria. Professional networks have now added a layer to recruiters providing them a more automated way to get the word out about the job opportunity as they seek not only the candidate but anyone who might know a potential candidate. I certainly wouldn’t appreciate a recruiter who asked me if I would be interested in a position that is clear not for me.

Marketers should take the same thoroughness in mapping out who their target prospect should be and utilize the tools available to seek out those individuals.

The tools that I would recommend are;

1. PPC optimization tools such as clickable (www.clickable.com) to get the most out of your PPC campaigns.
2. Professional network tools such as LinkedIn to help search for the "right" person in your network.
3. Pay per post blogging sites like payperpost.com to drive specific "buzz" to your targeted audience.
4. Professional niche networks such as Biznik and Fastpitch that make it easy to post promotions on your company to targeted folks
5. Business networking marketplace such as Salesconx (www.salesconx.com) - sorry for the self promotion.

How can social networking space be leveraged to create opportunities for Sales?

I was just asked on LinkedIn, "How can social networking space be leveraged to create opportunities for Sales?"

It is important to bifurcate (yes Maggie I used the word bifurcate) social networking between both those words “social” and “networking”. The social aspect of social networking is the ‘fun’ element. It is the keeping in touch with past colleagues, college friends and associates. It’s helping out one of your past coworkers who is looking for job and needing some added help in making introductions. When my high school was having a reunion (not saying how many years) we used social networking to track and find almost everyone in the class.

What we are seeing in social networks is that ones’ “network” is getting too large so folks are creating groups of like-minded users. These folks interact in smaller environments very much like the early forums of the Internet. Let’s be real for a second; you might have a 500+ rolodex but you aren’t inviting all of them to you house for a party – your rolodex is filled with folks from your past and present; people you have worked with, go to school with and regularly associate.

The other element is that of “networking” – in this case meaning to get introduced to people who could benefit ones career or business. We are leveraging our relationship with one person in the hopes of them introducing us to one of their contacts who could at some time in the future help us in our career or business. From a selling perspective the objective is quite straightforward when put into the context of social networking – can I leverage my contacts to drive new business by having them introduce me to potential customers?

Using traditional social networking tools, I could ask one of my contacts (say someone I worked with at a previous company) to introduce me to someone in their network who might be interested in my service. In the old days we called this ‘working your rolodex’ – calling up folks you knew and asking them to refer a new client to you. Social networking has made this process much easier although the end will be the same. Shaking the trees will often cause fruit to fall but shaking them harder will have little to know effect.

One of the lessons of social networking is our new found comfort in making an introduction between 2 parties. There is also a growing trend of leveraging ones human capital. There are expert networks that will compensate you for your knowledge and expertise. There are peer-to-peer lending sites that will compensate you a higher interest rate for lending money to someone. The same model should hold true for selling professionals. Sales folks have excellent human capital in the relationships they have forged – not only with colleagues and past co-workers but with customers and decision makers. Ask a sales professional how many of their customers are in the social network and you will be surprised just how few. The reason is simple – those are customers not friends. Those relationships have value not only to the selling professional but also to businesses, marketers and other sales people who would want to get introduced to that individual. So trolling thru your networks won’t reveal these golden nuggets. One needs to create an environment that will compensate selling professionals for introducing their customers.

Driving new business – the small business challenge

Growing a business has its obvious challenges. The owner(s), usually with limited allotment of initial resources, must battle the clock in creating a meaningful strategy to steal market share from larger competitors. A few pivotal client relationships can make or break the entire business. In many ways, these challenges have not changed over time--but in 2008, there are also new ways to compete.

To better understand the issues facing small businesses today we surveyed close to 500 small businesses nationwide from a wide variety of industries, with the objective of understanding the following about owners of small businesses:[1]

• How they value new client relationships

• How they approach lead generation

• How they utilize the Internet’s networking features

New client relationships: the lifeblood of small business

According to our survey, small businesses place far more emphasis on new client relationships as 39% of our respondents count on new business for at least half of their annual revenues. Despite the obvious risks involved in depending too much on a small handful of clients, more than one-third (34%) of businesses surveyed are adding no more than three new clients per year. To add these new customers/clients 61% of respondents answered that client referrals and other forms of word-of-mouth marketing account for at least 50% of new business.

An immediate conclusion one could draw from the survey results is that small business must continue to find new sources of revenue to sustain and thrive. Most of the businesses in our survey are unable to rest on the revenues generated from their existing clients.

Online lead generation is being deployed as a vehicle for attracting new customers and clients without dramatically growing ones sales force. The promise of an even playing field across all vendors who place their advertisements on PPC networks such as Google and Yahoo is incredibly enticing. It was quite surprising to find that only 9% of the respondents where using online lead generation. It was more unexpected to see only 6% respondents attributed online lead generation to garnering 50% of their new client revenue. With 67% of respondents expressing concern about the ROI of launching new marketing campaigns, it is not surprising that the number of small businesses who utilize online lead generation is so low. Of all marketing tools utilized by our respondents, only word-of-mouth delivered greater impact than its utilization.[2]

Let’s just get more words-of-mouth

It would seem logical that the ideal way for a small business to grow would be to find more folks that could drive more business. This premise has ignited a new professional use of online networking, such as Facebook, Myspace, and LinkedIn. Using online networking businesses could extend beyond the rolodexes, gaining better access not just to their existing contacts but to their contacts’ contacts.

Corporate and private recruiters are turning to online networks to help them gain access to the people who know people who would be ideal candidates for open positions. Money managers are tracking business acquisitions in search of prospects that need private wealth management or insurance policies. Growing your network takes time and dedication. Keep in mind that the goal is to reach beyond ones immediate network. Once extended, the professional network becomes a viable medium for finding new clients. And while online networking is a great tool if you are looking to acquire only a few new clients, what if you need to find 15 new clients, or 20 new clients or 50 new clients per year.[3] How can you add enough mouths (in the word-of-mouth mantra) to drive the business that you need to sustain your growth? With only 17% of our respondents having the patience to wait for results from initiating new marketing initiatives it is no surprise that only 11% of those surveyed belong to an online network.[4]

Social media however, has reminded us that an introduction from a 3^rd party is the ideal way to meet prospects. Qualified introductions by 3^rd parties have played a role in the lives of numerous professionals belonging to a variety of industries; from real estate agents, brokers, recruiters and many others. The role of these 3^rd parties is to serve as a conduit between 2 parties with common business needs and wants.

A new kind of online network

What a small business needs is a quick, easy and effective method for expanding and generating new prospects. Salesconx, an online marketplace for business referrals, provides a forum for small businesses, marketers and sales professionals to exchange professional referrals with fees attached to each relationship. All a small business needs to do is post its business referral requirements and establish a fee that it is willing to pay for an introduction. The request will be distributed (pushed and pulled) to the 1,000+ members of Salesconx who have access to the customers that the business is looking to meet. Those interested will respond and the business selects only those they are comfortable working with. A business could even submit a post that pays only on success. Salesconx minimizes the risk and upfront costs associated with traditional marketing campaigns delivering the results that make businesses grow.

Note: anyone interested in obtaining the full survey results should email me.

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[1] 82% of participating companies reported less than $500,000 in annual sales.

[2] 22% of the respondents use word-of-mouth initiatives to drive new business and 32% of the respondents say that word-of-mouth accounts for more than 50% of their new business.

[3] 30% of the respondents were adding at least 20 new clients per year with 11% adding over 100 per year.

[4] As of December 26, 2007 Facebook has approximately 50,000,000 users and LinkedIn has approximately 14,000,000 thus accounting for only 11% of the participants.

Salesconx Launch Party at the Social Bar

From my speech last night at the launch party.

Good evening everybody. My name is Evan Sohn and I want to thank you all for coming out tonight to celebrate the launch of Salesconx.

So how many folks here have closed business in the past 90 days? So you all found and sold to the right guy.

Did u know that over $90 billion is spent by companies trying to find the right guy? Banner ads, click thru campaigns, email marketing, telemarketing, appointment setting are just some of the ways that companies are spending to find the right guy.

There has been a lot of hype around social networking and how it could help with lead generation. I belong to a number of social networs. They make it real easy to add contacts and grow my social network. At least once a month I get a request from someone I don’t know to get introduced to someone I do know – has this happened to anyone else? Let me get this right; someone is paying these sites to meet the people I know. So in the end, these sites are making money off my relationships.

Salesconx changes all of that.

Salesconx recognizes that each of you has great human capital. You have built relationships with decisions makers in numerous industries. You have earned the trust of key people in companies of all sizes. You have closed the deals that bring revenue into your company. You make things happens.

Here’s the reality; business owners, marketers and other sales people are willing to pay you to simply get them into the door of a targeted buyer. Why shouldn’t they pay you?

If you were a recruiter and had a candidate and another recruiter has a job posting and you introduced the parties together. You would get a fee. If you were a real estate broker and I was a real estate broker and you introduced me to your client who took space you would get a fee.

So if a business owner wanted to meet someone that you have a business relationship with and you introduce us together why shouldn’t you get a fee? Is your relationship any less valuable than the recruiters or the real estate agents?

Since going live in September over 700 users have registered on Salesconx and we are adding over 10 users per day. We have a sales rep from Staples looking to meet VPs responsible for buying office supplies. We have an insurance rep looking to meet small business owners. These folks have set a price for what they are willing to pay for an introduction. Do you think it works?

Nevin is a mortgage broker in NJ. For over 7 years he has been building relationships with a number of companies that he has sold mortgages to. Nevin registered with Salesconx around the end of September. As of this morning, Nevin has earned over $650 by introducing other Salesconx users to his business contacts. And we are just at the beginning.

Our goal at Salesconx is very simple – to make you money. We understand and appreciate the value that you bring to the selling process and believe that you should be compensated accordingly.

You are valuable and your time is valuable and we have a dedicated inside sales team to support and help you get the most for your business relationships and help you find the ones you are looking for. Please find Brian, Crystal or Attiya if you have any questions about Salesconx.

So, do you want to make a quick $100? Go to the site tomorrow and introduce one of your business contacts to one of the users seeking to meet them.

You want to make a quick $40. At Salesconx we will pay you $20 for referring your sales colleagues. Refer 2 of them and when they qualify you’ll get $40.

You being here tonight is very important and valuable to us. As such, if I don’t already know, I would ask you to please come over introduce yourself. And since at Salesconx we are all about making money we will give you $10 just for introducing yourself.

Thanks and enjoy…

My first posting

I have always been an early adopter of new technologies - back in 1993 I had one of the first wireless email systems using the Ardis network, I was one of the first developers on the Apple Newtown, I was in CRM when it was still called sales automation, I was in WiFi when it was called 802.11 and few other similar examples. I remember using Gofer on the my PC to "surf" the Internet in its early days and heck I even lost a lot of money investing in Lycos. I was always ambivalent about THE BLOG but, I decided that as part of the launch of my latest company, Salesconx, I would keep a BLOG as means of both communicating to our users and prospects but also, in the hopes of leveraging your experiences as we develop this new marketplace.

What is Salesconx?
Salesconx (pronounced 'sales-con-ex') is a marketplace for sales people to post and trade introductions to decision makers and buyers. Think of LinkedIn meets eBay. We are in alpha mode right now so go check out the site at http://alpha.salesconx.com.

Sales people have really gotten shafted throughout the evolution of the internet. eCommerce basically says, 'hey customer, I have what you want so buy directly from me'. Thus bypassing the sales person. Maybe an entry level inside sales rep handles some questions for the lead but most of the sales process is done online.

When I talk to experienced sales reps they comment that their lives really haven't changed by the Internet. They are still cold calling to gain entry into their prospective companies; sure they don't use the phone book anymore (does anyone) but use services like Hoovers, Zoominfo and Sales Genie. They are building their calling list and then working the phones.

On the other side of the bullpen, the marketing department is pressured to deliver qualified leads to the sales department (mostly the inside sales department). Yet, the tactics available to reach the target audience have gotten more and more difficult. Direct mail never reaches the decision maker. Unsolicited email gets blocks way before it reaches anyone in the company. Tradeshows have become vendor festivals with all the companies salivating over the handful of customers who actually attend. The art of bypassing a secretary to reach the executive has been replaced with the art of leaving voice mail after voice begging the executive to suggest a good time to call back. Does anyone ever return the call of someone they don't know? Let's turn our attention to PPC campaigns. It is amazing how much we (in the general sense) are spending on Google ads and PPC campaigns. The conversion rates are lower now than they were a few years ago but we still continue to spend the money to make sure our company name appears in Google.

When I was driving sales and marketing for Omnipod, I had direct responsible for producing the monthly revenue number. Thus marketing was really truly integrated into the sales process. Marketing was used to generate the leads that the sales team (we were 90% inside sales) qualified and took thru the sales process. [Let me first apologize to all those who received unsolicited email from Omnipod]. It got harder and harder to increase the lead numbers despite spending more and more money as the conversion rates decreased over time and not increased (conversion from lead to qualified lead). Just this past January, our cost per lead was approximately $350 and our cost per qualified lead was nearly $1000 - and we were considered GREAT by all standards.

It occurred to me (back in November of 2005) that wouldn't it be easier just to post an ad in Craig's list, 'hey, I'll pay you $350 if you know someone who would want to buy my product/service'. Of course, since you don't really know who is responding to you, there has to be a better mechanism of user qualification, transaction mediation and feedback - thus Salesconx was born.

For the Salesperson
Salesconx provides the sales person a vehicle for making money off the relationships that they have cultivated and nourished. It also bothered me that every time (and it occurs at least weekly) I am asked to refer a graphic designer, web site company, lawyer, etc. I never get a dime for it. Yes I know it's quid-pro-quo but, if I was a lawyer passing a client to another lawyer I would certainly get a fee. This process, while appropriate and commonplace for insurance, real estate, law and recruiters has passed over the sales profession. I know you might be thinking that the could be abused well, rest assured we have added safety controls to salesconx to minimize abuse and most of all, there is a feedback system which has succeeded for the liked of eBay and others.

For the small business or marketer
Salesconx allows the business owner or marketer to publish a "request" whether it is for an introduction or merely the contact information of a desired decision maker. A request could be "seeking introduction to building managers of NYC buildings" for a cleaning supply company or "Intros to new companies >10 employees in NJ" for a wiring or VOIP company. One CEO I have spoken to was extremely frustrated in trying to find "the right guy" at a major telco to introduce his product to. It took him over a year to finally get the right people on board who could make the introduction. It would have been much easier to post this request on Salesconx and establish a high fee for making the introduction.

Of course, there is a lot more to say about Salesconx as we are just seeing the tip of the iceberg of what a marketplace such as Salesconx could accomplish and grow into over the next few years.

Feel free to drop me a line or email esohn@salesconx.com if you have any sales experiences that you think should be worked into the Salesconx model.

All the best,

Evan