There are a lot of B2B lead generation services out there. Unfortunately, many providers don’t deliver what they promise. If you’re in the market for B2B lead generation services for your company, here are some valuable tips on selecting the right service provider.
#1 Do They Actually Execute the Calls (or emails or voicemails)?
This is a particular problem with pure activity-based campaigns like event invitations, white paper distribution and the like. The b2b lead generation service is paid a set amount per month or project. Then their agents “get to work” on your campaign. There is no tangible deliverable other than activity.
Typically this means calling down a big list with an auto-dialer and talking to whomever picks up. The problem is, many service providers will put their lowest level people on this type of campaign. They’ll often offshore it to teams of young people making minimum wage who lack industry experience.
The combination of low pay and activity-based compensation encourages agents to take the easy way out. Just keep clicking the auto-dial button and talk to whomever picks up on the first dial. When an agent runs into a gatekeeper, the incentive is to quickly hang up and move on. If a prospects asks for a call back later, the agent often won’t follow up.
Failure to pursue calls to completion results in low penetration of the target accounts.
How do you solve this?
First, demand weekly auto-dialer call logs as part of the deal and review them regularly for the appropriate level of activity. This will keep your service provider honest.
Second, if you’re contracting for appointment setting services (qualified discovery calls) then require a certain number of discovery calls scheduled that meet your specific qualification criteria. You should also require a pro-rata money back performance guarantee for calls that aren’t qualified and any no-shows.
#2 Poor Communication Quality
Calls from B2B lead generation services often have lots of background noise. Agents may speak to your prospects with unfamiliar accents, drift off-script and respond oddly (or not at all) to basic questions. This screams “cheap!” and is hardly the way to represent your company to key prospects.
First, don’t hire a provider of B2B lead generation services that off-shores your campaign. Offshoring works great for other services, but for high-value sales activities it’s generally a bad idea.
Second, ask for the call recordings at the beginning, middle and end of your campaign. Don’t let the service provider cherry pick their best call recordings — demand access to all of them. You want both quality AND continuity in the campaign calls. Include this in the contract so payment is contingent on responding to your ad hoc requests.
#3 Be Specific With Your Qualification Criteria
Here’s the specific qualification criteria we require our clients to give us before we start a campaign:
- Specific Job Titles (e.g. VP of Finance, Head of Customer Service Operations NOT just “VP”)
- Specific Target Companies OR Industry + Size + Location
- Authority (authority to buy or directly influence the buying decision)
- Budget (must be 2-5X the cost of our client’s offering)
- Timing (current initiative or likely to have one in the next year)
- Not on the Do Not Call List (current clients, lost deals or unlikely to buy)
- Actually shows up for the discovery call and participates
If you don’t specify your qualification criteria you’ll end up with wide variations in lead quality. You could literally get zero qualified prospects from your campaign spend — not good.
Remember, the more stringent your qualification criteria the higher the price. Beware of firms offering b2b lead generation services that sell “qualified leads” for less than $500 each — this implies substantial shortcuts somewhere. Ultimately, it’s the quality – not the quantity – of discovery calls that will build a healthy sales pipeline and generate high ROI your business.
A true qualified lead is one that could purchase your offering at a reasonable price, in a reasonable time period and move the dial for your business. An unqualified lead not only wastes the money you spent to get it scheduled, but costs your sales or business development execs valuable time, and most importantly slows your sales growth. Unqualified appointments are a triple whammy!
You can solve this issue by being very specific with your qualification criteria. Include it in the contract, then hold your B2B lead generation service accountable to for each prospect call scheduled.
#4 Don’t Nickel & Dime the Front End of Your Sales Funnel
We constantly hear things like “I got quoted $200 to $300 for a qualified discovery call”. For high-value B2B offerings requiring a sophisticated sales approach, falling for this bait a mistake. It’s not possible to deliver a properly qualified B2B sales lead for a product or service valued over $25k that cheaply.
If you’re unsure about what is a reasonable cost per qualified sales lead for your business, we advise this approach:
First, plan to start off with a 3-month pilot program in a single industry niche. Don’t choose the hardest industry and don’t give your lead generation partner a worked-over list because that leads to failure. But do require your specific qualification criteria to be met. This will generate baseline flow of discovery calls, good cost data, and lots of market intelligence.
Second, work backwards from your average Year 1 customer value (profit – aka “Y1CV”). Calculate your average profit per NEW customer for the last year or two for the specific product or service you are hiring your lead generation partner to sell. Then, make the assumption that you will close roughly 10% of the qualified discovery calls scheduled for you. Average B2B close rates for properly “sales qualified leads” run around 20-25% so this is conservative. Anything below 10% and you have a qualification problem or lack of demand in your market. Finally, multiply your expected Y1CV by 10%. This will generate an expected value per qualified discovery call to your firm. The cost per discovery call that you pay should be around 25% to 33% of this estimated value. This equates to about 2-3X ROI in Year 1.
For example: Year 1 customer value $50k * 10% close rate = $5,000 discovery call value. $5,000 x 25% to 33% = $1,250 to $1,650 cost per discovery call.
A simpler way to estimate discovery call value is to multiply your average Year 1 customer value (profit) by 2-3%. Multiplying the $50k Year 1 customer value above * 2% to 3% gives you a cost range of $1,000 to $1,500 per qualified discovery call. Use this if you don’t have any idea of your conversion rates or don’t have a structured sales process in place with pipeline stages.
These are real cost numbers for properly qualified B2B sales calls for a Y1CV of $25k-plus. B2B customer values are typically much higher over a multi-year relationship, so your ROI will likely exceed 2-3X over time.
For your lead generation partner to actually drive your sales pipeline takes a lot of diligent work. They must hire, train and employ the right SDRs on your account, replace no-shows, and make it through rough patches, holidays, etc. If you are quoted $200 to $300 per qualified discovery call something isn’t right and you’re probably doing business with the wrong B2B lead generation services partner.
#5 Expect a High Level of Integration Between Your Team and Your Lead Generation Provider
We strongly prefer to operate as our clients’ employees do. This means our SDR has an internal company email address, calendar, access to your key executives’ calendars for scheduling, direct auto-dialer integration, email signature, call-back extension, etc. Getting these things in place requires IT effort and time from your sales or biz dev team for training. It may also require internal approvals, since you’re providing a third party contractor with direct access to company infrastructure.
The alternative is to set up parallel communication tools using a “vanity URL” approach. For example, if your company URL is abcdef.com then the vanity URL the lead generation provider uses for communications might be abcdef.net. We use this approach this as a fallback position if there are technical difficulties or approval issues getting on-boarded directly to your company infrastructure. However, it still requires sharing your sales or business development execs’ calendars so we know when they can schedule appointments.
Many B2B lead generation providers skip this entire setup and integration step by operating “on firm X’s behalf” using their own emails, calendars, etc. Unless your service provider is a well-known industry player in your market (for example, a major industry event coordinator or newsletter service) then this approach doesn’t work well. There is no hiding that a 3rd party has been hired to do your sales work. The relationship starts out on the wrong foot and causes confusion on the prospect’s end. Most decision-makers won’t participate in this type of third party appointment setting scheme. The number of no-shows also tends to be very high from this approach.
Companies looking for B2B lead generation services usually underestimate the amount of integration required for a successful partnership. You want the outsourced SDRs working for you to be able to do things right, represent your brand properly to high-value prospects, and get the best bottom line results from real qualified appointments. If you don’t approach things this way you run the risk of blowing your sales development budget with little to show for it.
The solution? Prepare your team for the integration and training effort required, and demand that your lead generation provider operate as a full team member with all the tools you’d provide a new sales hire.