b2b teleservices: the 2008 buyer's guide · hosted marketing automation solutions, and...

B2B TeleServices: The 2008 Buyer's Guide

April 2008

http://www.aberdeen.com/common/send_to_friend.asp?cid=4883

B2B TeleServices: The 2008 Buyers Guide

© 2008 Aberdeen Group. Telephone: 617 723 7890 www.aberdeen.com Fax: 617 723 7897

Executive Summary

This first-time comprehensive Aberdeen study of the B2B TeleServices industry examines the lead discovery and qualification pressures faced by marketing and sales practitioners, the actions they consider to drive peak performance in their marketing investments, and how Best-in-Class performers utilize teleservices methodologies to drive maximum pipeline content and bid-to-win performance ratios. The research reveals best practices in lead lifecycle management deployed by teleservices customers, and explores blended human / technology solutions they have managed for Return on Marketing Investment (ROMI) success.

Best-in-Class Performance Aberdeen used four key performance criteria, average year-over-year change metrics, to distinguish Best-in-Class companies:

• 22% increase in revenue per sales rep

• 20% increase in sales performance against quota

• 20% improvement in lead-to-sales conversion rate

• Bid-to-win ratio increase of 14%

Competitive Maturity Assessment Survey results show that the firms enjoying Best-in-Class performance shared several common characteristics:

• Dedicating an average of 44% of their overall lead generation budget to outsourced B2B teleservices

• Viewing lead quality as 2.4 times more vital than lead quantity

• Placing a sales effectiveness premium on a tight-knit relationship with external vendors, including frequent access, messaging reviews, and ROMI analysis

Required Actions In addition to the specific recommendations in Chapter Three of this report, to achieve Best-in-Class performance, companies must:

• Analyze a wide variety of solutions and compensation models to determine the best fit for their enterprise

• Frequently review teleservices methodologies to maximize marketing's shipment of substantive, actionable opportunities to sales, who in turn recognize gains in overall productivity

Research Benchmark

Aberdeen’s Research Benchmarks provide an in- depth and comprehensive look into process, procedure, methodologies, and technologies with best practice identification and actionable recommendations

“You can’t expect these firms to accomplish something you’re not willing to do yourself. You have to have a plan, know your targets, know your customers and especially know what’s compelling and effective in your space. You have to do your homework, come in prepared, and then they’ll help you execute with great results.”

~ Owen Tucker, VP Marketing, E2Open




Table of Contents Executive Summary.......................................................................................................2

Best-in-Class Performance.....................................................................................2 Competitive Maturity Assessment.......................................................................2 Required Actions......................................................................................................2

Chapter One: Benchmarking the Best-in-Class .....................................................5 Business Context .....................................................................................................5 The Maturity Class Framework............................................................................6 The Best-in-Class PACE Model ............................................................................6 Best-in-Class Business Landscape.........................................................................7 Best-in-Class Strategies.........................................................................................11

Chapter Two: Benchmarking Requirements for Success ..................................13 Competitive Assessment......................................................................................13 Capabilities and Enablers......................................................................................14

Chapter Three: Required Actions .........................................................................20 Laggard Steps to Success......................................................................................20 Industry Average Steps to Success ....................................................................20 Best-in-Class Steps to Success............................................................................21

Appendix A: Research Methodology.....................................................................23 Appendix B: Related Aberdeen Research............................................................25

Figures Figure 1: Pressures to Deploy Outsourced B2B TeleServices...........................5 Figure 2: Percentage of Overall Lead Generation Budget Allocated to Outsourced B2B TeleServices Providers ................................................................8 Figure 3: Definition of "Qualified Sales Lead" Accepted from Outsourced B2B TeleServices Providers...................................................................................................8 Figure 4: Preference for Flexible Vendor Compensation Models (Performance-based, Retainer, Activity-based) by Best-in-Class.......................9 Figure 5: Best-in-Class Performance Among Appointment-Setting Devotees .........................................................................................................................................11 Figure 6: Most Effective Strategic Actions Taken to Maximize Outsourced B2B Teleservices Impact on the Sales Pipeline ....................................................11 Figure 7: Most Valuable Activities Provided by Outsourced B2B Teleservices Providers .......................................................................................................................12 Figure 8: Best-in-Class Capabilities .........................................................................15 Figure 9: Best-in-Class Enablers...............................................................................17 Figure 10: Best-in-Class Performance Metrics Associated With Sales Excellence......................................................................................................................19

Tables Table 1: Top Performers Earn Best-in-Class Status..............................................6



Table 2: The Best-in-Class PACE Framework .......................................................7 Table 3: The Competitive Framework...................................................................14 Table 4: The PACE Framework Key ......................................................................24 Table 5: The Competitive Framework Key ..........................................................24 Table 6: The Relationship Between PACE and the Competitive Framework .........................................................................................................................................24



Chapter One: Benchmarking the Best-in-Class

As the need for better lead discovery and qualification drives marketing and sales partners to maximize their Return on Marketing Investment (ROMI), increased pressures are being placed on their deployments of outsourced teleservices providers to identify, nurture, and filter actionable opportunities that are ripe for "closer" activities at the time of release to sales.

Business Context The lead generation industry has experienced a significant increase in complexity and efficiency with the advent of powerful data-mining tools, hosted marketing automation solutions, and sophisticated email marketing techniques that continue to drive spending and ROI satisfaction among marketing program and campaign managers. According to Aberdeen research for the Demand Generation: Kick-Start Your Business report, conducted in September 2007 among over 600 companies, 97% of Best-in- Class organizations deploy campaign management tools, and 81% use analytical tools for modeling and scoring leads within a strategic approach to lead lifecycle management.

Aberdeen research reveals that companies are increasingly turning to the people and processes presented by outsourced B2B teleservices engagements in order to augment the overall size of pipeline content created for their sales teams, while maintaining control of both the quality and unit spend on lead opportunities sourced on their behalf (Figure 1).

Figure 1: Pressures to Deploy Outsourced B2B TeleServices

5%

25%

40%

90%

26%

22%

48%

70%

16%

25%

47%

80%

0% 25% 50% 75% 100%

Too many leads to manage or qualify

Reduce costperopportunity

Increase lead quality

Increase sales lead pipeline

% of Respondents

BestinClass Industry Average Laggard

Source: Aberdeen Group, April 2008

B2B TeleServices Defined

For the purposes of this study, "Outsourced B2B TeleServices" refers to external solution providers whose staff - virtual or in a brick-and-mortar environment - engage with a customer's sales targets for pre-sales activities via live business conversations by phone. Specific BPO deployments can include cold- calling lead generation, intelligence gathering, appointment-setting, event recruitment, database construction, or inquiry qualification. Long-term goals of these deployments can range from new customer acquisition, to up-sell / cross-sell within existing accounts, to building brand awareness and market intelligence.

http://www.aberdeen.com/summary/report/benchmark/4178-RA-demand-generation.asp



The Maturity Class Framework Aberdeen used four key performance criteria, all year-over-year change metrics, to distinguish the Best-in-Class from Industry Average and Laggard organizations:

• Revenue per sales rep

• Sales performance against quota

• Lead-to-sales conversion rate

• Bid-to-win ratio

Table 1: Top Performers Earn Best-in-Class Status

Definition of Maturity Class Mean Class Performance

Best-in-Class: Top 20% of

aggregate performance scorers

§ Average year-over-year improvement in revenue per sales rep of 22% § Average year-over-year improvement in sales

performance against quota of 20% § Average year-over-year improvement in lead-to-sales

conversion rate of 20% § Average year-over-year improvement in bid-to-win

ratio of 14%

Industry Average: Middle 50% of aggregate

performance scorers

§ Average year-over-year improvement in revenue per sales rep of 10% § Average year-over-year improvement in sales

performance against quota of 4% § Average year-over-year improvement in lead-to-sales

conversion rate of 4% § Average year-over-year improvement in bid-to-win

ratio of 3%

Laggard: Bottom 30% of aggregate

performance scorers

§ Average year-over-year decline in revenue per sales rep of -1% § Average year-over-year decline in sales performance

against quota of -1% § Average year-over-year decline in lead-to-sales

conversion rate of -1% § Average year-over-year decline in bid-to-win ratio of

-1%


The Best-in-Class PACE Model Using outsourced B2B teleservices to achieve corporate goals requires a combination of strategic actions, organizational capabilities, and enabling service solution that can be summarized as shown in Table 2.

Fast Facts

√ Among companies that have budgeted and scheduled a pending outsourced B2B TeleServices initiative, their lead generation budget has increased by an average of 13% to accommodate for the addition of the new methodology

√ The average annual revenue- per-sales-rep among the Best-in-Class is $1,200,000



Table 2: The Best-in-Class PACE Framework

Pressures Actions Capabilities Enablers § Increase

sales lead pipeline

§Drive more qualified and nurtured leads to sales §Collect deeper

business intelligence in context of lead generation activities § Shift high-volume

calling / nurturing activity to external provider

§ Regularly scheduled interface directly with outsourced calling staff §Quantifiable deliverables § Regular adjustment of

messaging and strategies §Ongoing solution training §Optimize list quality via a

sustained relational marketing database § ROMI review process

§One-on-one relationships between outsourced calling staff and customer sales reps § Proprietary database cleansing, enhancing, and

management §Clear SLA definitions § “Get to know” pilot engagement § Formalized lead scoring § Transparency of outsourced staff (represent

client) § SFA / CRM integration or real-time reporting

portal §Differentiated methodologies for lead

nurturing and hand-off for direct versus channel sales organizations § Flexible vendor compensation models

(performance-based, retainer, activity-based)


Analysis of the pressures driving organizations to engage with outsourced teleservices providers identifies a single, clear-cut link between pipeline size and the potential benefits to be gained from deploying an external service organization to increase it. Best-in-Class companies also place a premium on lead quality, whereas Laggards reveal an interest in utilizing services to help address an out-of-control lead generation process - too many leads to handle - at a pace more than five-times as high as that of top-performing organizations. This reflects a lack of organizational and vendor management capabilities among Laggards, who benefit the least from their efforts to drive actionable intelligence to the sales team.

Best-in-Class Business Landscape Before addressing the strategic actions taken by Best-in-Class enterprises around their external teleservices solutions, it is important to gain an in- depth of understanding of the relationships themselves.



Figure 2: Percentage of Overall Lead Generation Budget Allocated to Outsourced B2B TeleServices Providers

35%

15%

10%

19%

4%

11%

0%

10%

20%

30%

40%

50%

More than 50% 41% 50% 31% 40%

BestinClass

All Others


Top-performing organizations allocate a significant percentage of lead generation spend on these services. Industry Average and Laggard companies combine to allocate funds, to this degree, at a pace 54% less than the Best-in- Class. In real terms, all companies surveyed report spending an average of 33% of their lead generation budget on teleservices; among the Best-in-Class, the figure rises by one-third, to an average of 44% of relevant spend. In addition to devoting more budget to these services, the strongest marketing / sales organizations are also clear about the definition of a sales lead.

Figure 3: Definition of "Qualified Sales Lead" Accepted from Outsourced B2B TeleServices Providers

19% 19%

27%

8%

55%

15% 15% 10%

0%

36%

19%

11%

19%

11%

19%

0%

15%

30%

45%

60%

Sales appointment or conference call is scheduled and supported by qualifying data

Decision maker(s)

interviewed and business pressures identified

Budget, authority OR timeframe is

identified

Budget, authority and timeframe are ALL defined and confirmed

Sales appointment or conference call is scheduled



"You need to respect the fact that they are better at this than you are, so you need to take their advice. Like managing an employee, they also need to be aggressively managed, to avoid GIGO [garbage in, garbage out]. You can’t just say, ‘here’s a list, go start calling.’ You can’t throw it over the transom, and ‘say go get ‘em.’”

~ Business Development Manager, Higher Education

Solutions Provider



While an appointment-setting methodology is highly desirable, with top performers selecting it more than all other definitions combined, the act of scheduling a meeting or conference call for sales staff itself carries absolutely no value, unless the provider organization validates the appointment with qualifying data regarding the target company's personnel, competitive challenges, and other relative business intelligence. A simple appointment is attractive to no Best-in-Class organizations, whereas 10% of all other companies are willing to define a qualified lead as such. Figure 3 reveals a Laggard trend toward challenges around "too many leads" and the need to balance lead quality with lead quantity.

Another facet of how the Best-in-Class prefer to interact with their solution providers details the compensation models most favored for the transactional nature of the relationship itself. Assuming that a meeting or appointment that has been arranged by the solution provider is accompanied by appropriate qualifying data, Best-in-Class companies prefer to pay by the appointment or meeting set, at a 60% rate, compared with 30% for all other companies. Virtually all other compensation methods are supported more by Industry Average and Laggard companies, indicating a continuation of the lead definition trend detailed earlier. Paying for teleservices deliverables by the lead itself, via the target or record, by the hour or on retainer, are all de-emphasized by the Best-in-Class as preferred methodologies.

Aberdeen research reveals that twice as many Best-in-Class organizations, versus Laggards, choose to deploy a flexible financial arrangement with their outsourced services provider, with an additional 20% planning to do so within the next year. Far fewer Industry Average and Laggard companies, as seen in Figure 4, mirror this open-ended mind set.

Figure 4: Preference for Flexible Vendor Compensation Models (Performance-based, Retainer, Activity-based) by Best-in-Class

50%

28%

25%

20%

42%

25%

0% 15% 30% 45% 60% 75%

Laggard

Industry Average

BestinClass

% of Respondents

Currently Using Planning to Use


“Don’t outsource simply to save money. Do it because your vendor has a unique skill set, or understanding of a sub- set of the market especially well. If you think you know more than they do, going in, you’re in big trouble.”

~ Sr. Manager, Lead Generation, Large Network /

Switching Manufacturer



While better-performing companies address lead definition and compensation as appointment-oriented as an ideal, they are more realistic regarding the need to not isolate their vendor relationship to a model that narrows activity to only these approaches.

A dramatic delta in performance is revealed by Figure 5. If Best-in-Class organizations, which represent strong-performing sales teams, are highly supportive of accepting sales leads only as data-supported appointments, and seek to primarily compensate vendors the same way, why do devotees of appointment-setting services yield such poor performance on a corporate level, at seven percentage points worse than Laggards and 21 to 28 points less than the Best-in-Class? The answer lies in the additional characteristics associated with the "devotee" sub-set:

• These companies report only a 2% interest in lead nurturing compared with 17% of all companies in the survey. This point suggests a "silver platter" mindset that, despite a desire for quality over quantity, reveals a deeper pattern of simply wishing for educated buyers to be introduced to sales with the least resistance accompanying the conversation.

• Appointment-setting devotees are 40% more likely than Best-in-Class companies to express dissatisfaction with the amount and accuracy of business intelligence gathered in support of leads delivered as appointments. This stems from a demand for style over substance.

• When asked why leads are rejected by sales, these respondents choose "cannot connect with the decision-maker" and "company is not a good fit for my solution" as the predominant reasons for pushing opportunities back to outsourced vendors. Again, the pay- for-performance model deployed inspires vendors to arrange sub- optimal opportunities for customers, in the interest of volume delivery only.

The data regarding appointment-setting suggests that organizations pursue the service from outsourced B2B teleservices vendors, but not as a sole or even predominant compensation model amidst an overall engagement. Lead quality, the ability to receive well-nurtured opportunities and, ultimately, the challenge of providing sales "customers" with well-rounded leads, should be addressed as contributing factors in engaging with vendors.



Figure 5: Best-in-Class Performance Among Appointment-Setting Devotees

0%

14%

20%

9%

4%

1%

8% 7% 10%

5%

0%

5%

10%

15%

20%

25%

YOY change in Sales performance

against quota

YOY change in average deal size

BestinClass Industry Average Laggard Appointmentsetting devotees


Ultimately, the value of appointment-setting to marketing buyers and sales customers remains a complex equation. Best-in-Class companies exhibit a strong preference for deploying this silo-type of service, but the data shows that an over-reliance on the model leads to negative results in overall corporate performance.

Best-in-Class Strategies Figure 6 defines how top-performing organizations and other institutions act to enhance the sales optimization process.

Figure 6: Most Effective Strategic Actions Taken to Maximize Outsourced B2B Teleservices Impact on the Sales Pipeline

5%

26%

70%

45%

30% 30%

15%

72%

21% 21% 17%

4%

0%

20%

40%

60%

80%

Drive more qualified and

nurtured leads to Sales

Collect deeper business

intelligence in context of lead generation activities

Enhance ROMI (Return on Marketing

Investment) vs. other marketing

programs

Shift highvolume calling/nurturing

activity to external provider

Increase the quality of outsourced messaging

Reduce or eliminate 'dead

end' leads delivered to

Sales

BestinClass All Others




While driving more leads and better leads from marketing to sales is a predictable priority for all companies, the Best-in-Class among all respondents place additional emphasis on the more nuanced aspects of lead generation, such as collecting better business intelligence, contrasting campaign ROMI with that of other marketing investments, and focusing on messaging quality. Interestingly, Laggard organizations are five times more likely than the Best-in- Class to be motivated to stem the flow of "bad leads" shipped to sales, most likely because they under-emphasize the more complex nature of how providers can do more than just "smile and dial" for leads.

Aberdeen Insights — Strategy

As Figure 7 illustrates, the general desire for sales lead generation is considered 70% more valuable to the Best-in-Class than the more narrow scope of appointment-setting, and is complemented by additional hard- to-measure preferences such as the gathering of account intelligence. Seemingly straightforward activities, such as database construction or campaign follow-up calls, are more Laggard preferences, further evidence that top-performing organizations will address a more varied and nuanced set of shared activities that connect their sales team members with opportunity development as performed by an external vendor organization.

Figure 7: Most Valuable Activities Provided by Outsourced B2B Teleservices Providers

5%

14% 22% 22% 19% 19%

33%

85%

50%

30%

10% 5%

65%

29% 31%

16% 18%

52%

0%

15%

30%

45%

60%

75%

90%

Sales lead generation

Appointment setting

Intelligence gathering

Custom contact database

development

Marketing campaign followup

Lead nurturing



In the next chapter, we will see what the top performers are doing to achieve these gains.



Chapter Two: Benchmarking Requirements for Success

The selection of outsourced B2B teleservices solutions and their integration into formal pipeline management methodologies play a crucial role in the ability to turn these strategies into profit.

Case Study — Cognos / IBM

While a substantial portion of lead generation dollars are appropriated to outside vendors' human capital, how much customized management of those services are deployed by the Best- in-Class?

Take, for example, the case of business intelligence provider Cognos, recently acquired by IBM. Cathy Yum, Director of North America Field Marketing, explains that she deploys both internal and external teams to tackle different types of teleservices support. “We have an internal teleprospecting team primarily focused on uncovering opportunities inside target accounts,” she explains. “They are a talented and expensive resource. So when you need to make 10,000 calls to recruit attendees for a road show, or 700 calls to remind webinar registrants of the event, the cost-benefit clearly supports outsourcing.” When an external firm is engaged, she continues, “it’s vital that the vendor understand and embrace your goals. We start first with basic activities such as event recruitment or reminder calling, then elevate the relationship. For example, we will use teleservices in multi-touch and high-touch environments where email or direct mail is not enough, such as new markets, lagging territories, or recruiting senior level audiences. We perform best when we integrate the vendor into our overall program flow.”

The human element, according to Yum, is a crucial factor in building effective relationships between external providers and the ultimate customer, her corporate sales staff. “Your account manager has to be strong and know your projects inside and out; you need to stay engaged with regular status calls. Above all, if there’s a specific sales team working with the external group, it’s important to have steady, open communication between the teams. This directly impacts the work the external team is able to deliver.” Yum adds that database accuracy is a key component in keeping large teleservices providers on track, ensuring that only accurate, appropriate records are provided to outside firms to tackle.

When serving up opportunities to the Cognos sales organization, Yum puts a high degree of emphasis on quality, over quantity. “Sales tends to be suspicious of third-party vendors. No matter how you package it, there will be some poor leads delivered. It can only be one or two, but it can color the whole project. What we do is leverage our SFA implementation and assign the opportunities right away, to track and watch them through the entire sales cycle. This way we immediately know if a delivered lead is aging beyond the agreed SLA we have with sales for whatever reason, and can remove it from their queue for further qualification.” In addition, the marketing team automatically holds onto all opportunities that are deemed as 12-month-plus sales cycles, and allows the vendor to nurture these records. She asserts, “they need to be in the sweet spot timeframe before we ship them.”

Competitive Assessment Aberdeen Group analyzed the aggregated metrics of surveyed companies to determine whether their performance ranked as Best-in-Class, Industry Average, or Laggard. In addition to having common performance levels, each class also shared characteristics in four key categories: (1) process (the



approaches they take to execute their daily operations); (2) organization (corporate focus and collaboration among stakeholders); (3) knowledge management (contextualizing data and exposing it to key stakeholders); and (4) services (the selection of appropriate provider solutions and effective deployment of those tools). These characteristics (identified in Table 3) serve as a guideline for best practices, and correlate directly with Best-in-Class performance across the key metrics.

Table 3: The Competitive Framework

Best-in-Class Average Laggards Regularly scheduled interface directly with outsourced calling staff Process

84% 76% 69%

Formalized involvement of sales “customers” with outsource vendors Organization

50% 48% 36%

Ongoing solution training Knowledge

60% 60% 46% Services currently in use:

Services

§ 50% flexible vendor compensation models § 30% multi-lingual

outsourced callers § 40%

differentiated methodologies for lead nurturing and hand-off for direct versus channel sales organizations § 50% “get to

know” pilot engagement










Capabilities and Enablers Based on the findings of the Competitive Framework and interviews with end users, Aberdeen’s analysis of the Best-in-Class reveals a significant portfolio of best practices that marketing buyers of outsourced B2B teleservices are advised to consider as they continue in their quest to deliver both quality and quantity leads to their customers in sales. Figure 8 and Figure 9 provide data to support recommendations across business

Fast Facts

√ Best-in-Class companies spend an average of 27% less per teleservices-generated sales lead, compared to other companies

√ Best-in-Class organizations spend an average of 32% less on teleservices-generated opportunities, compared to all other sources of lead identification



process, corporate organization, knowledge management, and accessing the most promising services from external providers. The ultimate rationale for deploying these elements within a vendor relationship remains increasing both the quality and quantity of the sales pipeline, and thus the productivity of the overall enterprise.

Figure 8: Best-in-Class Capabilities

84 16

65

65

60

55

40

35

20

25

25

35

0 25 50 75 100

ROMI (Return on Marketing Investment) review process

Optimize list quality via a sustained relational marketing database

Ongoing solution training

Regular adjustment of messaging and strategies

Quantifiable deliverables

Regularly scheduled interface directly with outsourced calling staff

% of Respondents



Process The Best-in-Class respondents within Aberdeen's survey audience are highly supportive of engaging in a regularly scheduled interface that includes the outsourcer's calling staff. At a rate 22% higher than Laggards, and at 84% overall, these top-performing organizations recognize that simply paying an external company to make phone calls, and then wait for the results, is a poor execution of a process in need of more substantial client / vendor collaboration. While the luxury of outsourcing the traditional inside sales role to an external provider, especially one potentially only paid on results, may tempt the marketing buyer to sit back and wait for results, the odds of this approach succeeding are thin. Alternatively, companies seeking to achieve Best-in-Class status as sales-oriented enterprises should take the time to meet not only with the vendor's program management and / or sales contacts, but with the phone-based caller personnel themselves.

Organization Once a formal process is established to continuously integrate outsourced calling staff with the end-user organization, an effort to include the actual

“If you think you can toss your program over the wall and have it delivered, for anything that’s not commoditized, you’ll lose for sure. We’re really tied in with these guys. You run the same fundamental business model, with a relationship with sales as if they were internal.”

~ Erich Wichterman, Sr. Manager, SBD Telesales Sales

Planning & Development, Intuit



customer - sales - into the conversation follows as a logical next step. Fifty percent (50%) of the Best-in-Class agree, representing a 39% increase over Laggards, that teaming up callers with sales reps is the best way to create the kind of synergy often reserved for true inside sales functions, while leaving the management and risk out of the corporation equation. In fact, when asked the value of creating parity between the staffs, i.e. one-to-one relationships between individual vendor staff and customer sales reps, the Best-in-Class companies overwhelmingly support this organizational capability, with 70% currently deploying it, plus 20% more planning to do so within 12 months. Only 45% of Industry Average and Laggard respondents agree.

On a related subject, how do sales and marketing executives respond differently to the prospect of intense interface with external provider personnel? Marketers are 37% more supportive, indicating that while the value of this activity is proven, their sales counterparts may need some convincing.

Knowledge Management With a commitment to meeting regularly, and including sales in the conversation, the Best-in-Class also reveal a penchant for outsourcing the labor, but not sole responsibility for intellectual capital, to vendor firms. Sixty percent (60%) of top performers believe in the value of ongoing solution and skills training, defined here as a methodology that does not assume that a two-dimensional script or Powerpoint deck is sufficient education to best empower external pre-sales staff to continuously represent the best features, advantages and benefits of the company's product, solution or service. Indeed, the same percentage (60%) of the Best-in-Class either currently support, or plan to deploy in the near-term, the practice of real-time adjustments in messaging or strategies with their provider.

Services A wise rule of thumb in identifying, selecting, measuring, and managing the services provided by external vendors is "different strokes for different folks." Research has demonstrated the value seen by Best-in-Class companies regarding flexible compensation models, which are favored by top performers at a 2:1 ratio over Laggards. This flexibility should extend not only to considering different payment motifs, but perhaps combining them, i.e. retainer plus per-appointment, or hourly combined with incentives for leads progressing to formal pipelines.

Other end-users may require the benefit of multi-lingual callers to tackle global lead generation support, surely a benefit to larger enterprises with centralized pipeline management functions and budgets. In light of different types of sales organizations - direct, channel, reseller - as well as starting relationships with pilot programs that blossom into longer-term marriages, companies that acquire external teleservices support clearly see value in customizing their service package both initially, and over time, to fit both their individual needs as well as the most suited talents of the provider. Regarding pilot engagements, 50% of the Best-in-Class (35% of all other companies) deploy such relationship trial runs, with an additional 35%



planning to do so within the next year. This does not imply that companies should wait for pilot program-generated leads to result in "closed deals" by sales before re-engaging. Many end-users, finally, will deploy multiple vendors depending on the specific activities desired and skill sets available among the provider community.

Figure 9: Best-in-Class Enablers

50

65

70

35

25

20

50

37

65

40

40

35

42

10

35

35

0 25 50 75 100

Differentiated methodologies for lead nurturing and handoff for direct vs.

channel sales organizations

SFA/CRM integration or realtime reporting portal

Transparency of outsourced staff (represent client)

Formalized lead scoring

“Get to know” pilot engagement

Clear SLA definitions

Proprietary database cleansing, enhancing and management

11 relationships between outsourced calling staff and customer Sales reps

% of Respondents



Aberdeen Insights — Measuring Success

In developing a "buyer's guide" for the outsourced B2B TeleServices industry, Aberdeen research addresses the maturity class framework and defines Best-in-Class status primarily by metrics associated with sales performance, rather than via the programmatic ROI calculators typically associated with marketing throughput. Considering that marketing departments typically own the budget for these activities, does the research reflect a disconnect in measuring performance?

continued

“Internal sales teams rarely boast the level of productivity necessary to identify the right individual suspects, hold multiple conversations, and determine who ranks as a quality lead.”

~ Bob Lederman, former VP Sales, InMagic



Aberdeen Insights — Measuring Success

The answer is no, because Aberdeen's PACE methodology is specifically designed to address long-term success on behalf of the end-user. Whereas many valuable marketing-deployed campaigns can be evaluated in concrete, speedy measurements - i.e. the number of webinar attendees, trade show leads, downloads or clicks - the very word "pipeline" associated with the key pressure identified by the survey audience speaks to the more complex and long-term efforts supported by external B2B teleservices providers. In fact, with an average deal size of $263,000, 200+ reps and sales cycle of 28 weeks, the 200+ organizations participating in the research have engaged with such vendors for an average of 2.3 years.

With marketing budgets reviewed quarterly or even more frequently, the opportunity to evaluate teleservices success exists in reverse proportion to the complexity of the solution being represented.

Hence, Figure 10 details the sales-oriented, year-over-year performance metrics that undoubtedly carry more weight to the ownership, VC community or shareholders of the customer organization. Working in concert with sales leadership, marketing executives can manage and measure their vendors to the same ends.

“Despite the fact they’re outsourced, we have a very close relationship, with daily involvement from sales engineers and our own program manager who are often on-site, working with them on a daily basis. They’re very supportive of our intimate involvement in their activities, and understand that having nothing to hide makes a true partnership rather than a vendor relationship.”

~ Robert Maute, VP Branded Sales, Covad



Figure 10: Best-in-Class Performance Metrics Associated With Sales Excellence

14%

14%

20%

20%

22%

1%

1%

1%

1%

1%

3%

9%

4%

4%

10%

5% 5% 15% 25%

BidtoWin ratio

Average deal size

Leadto Sales

conversion rate

Sales performance

against quota

Revenue per Sales Rep

% of Respondents



"Every day I may not get a lead, but my name and nuggets of info about us are generating targeted awareness for us that may not turn into a lead right away, but later on they read an article, see a marketing message. This builds awareness that makes for an efficient driver of business."

Matt Heinz, Sr. Director of Marketing, Verdiem



Chapter Three: Required Actions

Whether a company is trying to move its performance from Laggard to Industry Average, or Industry Average to Best-in-Class, the following actions will help spur the necessary performance improvements involved with engaging external B2B teleservices relationships.

Laggard Steps to Success • Beware the problem of "too many leads." This is an indicator

of a lead generation process in need of repair, in either the front- end functionality provided by the teleservices vendor, or at the back-end within sales. Putting the vendor, marketing budget-holders and sales leadership in the same room is a wise course to start the re-building of a sales optimization initiative. Plan to hammer out 90- day and long-term goals that are both meaningful to the enterprise in terms of measurable ROMI, and also create a realistic investment in long-term return from a multi-quarter relationship with the right vendor. This will also help resolve the shipment of "dead-end" leads to sales that plagues over a quarter of Laggards.

• Invest in B2B TeleServices that provide a good fit for the solution or product. Appointment-setting may be appropriate for a horizontal, straight-forward sales pitch or sales teams with a mature geographic footprint; intelligence-rich or nurturing methodologies may better suit a longer selling cycle and complex value proposition.

• Flexibility in vendor compensation needs to be increased to give the process a chance to find equilibrium. Rigid adherence to a procurement- or CFO-inspired "skin in the game" payment relationship may not lead to better sales performance against quota, bid-to-win ratio or other metrics that define Best-in-Class collaborations between marketing and sales.

• Spend enough time evaluating the target market, to ensure that the companies that the vendor is targeting are the right fit in the first place.

Industry Average Steps to Success • Increase tracking of lead quality and quantity in order to find

the right balance between pure activity and Best-in-Class results. Continued collaboration between outsourced "hunters" and internal "closers" will help determine the most accurate, budget-worthy deliverables for a customer's team. If in doubt, however, reduce the flow of opportunities to sales to only those representing the most promising opportunities - if they clamor for "more leads" from the B2B teleservices provider that means a reputable source has been

Fast Facts

√ Lead response time averages 2.7 days for the Best-in-Class and 5.7 days for all other companies

√ The average sales cycle for all maturity class respondents is static at 28 weeks

√ Finding the right decision- maker within a target sales account is crucial - 40% of the Best-in-Class reject leads for this reason, compared to 10% of Industry Average and 7% of Laggard organizations



located, and the customer can budget for more activity next quarter.

• Be realistic about lead quality. While gaining positive intelligence on "budget, authority and timeframe" would delight any marketing program manager, the evidence points to the ability of Best-in-Class sales teams to develop opportunities from the more typical, partially-qualified leads that comprise the bulk of shipped records from outsourced teleproviders. In other words, in the search for "perfect leads" that exist in the either of the lead generation universe…probably have already engaged with a company's competitors. A focus on ensuring that sales "closers" are well-tutored, regarding how to accept, nurture, and grow the various flavors of leads they receive will undoubtedly provide additional competitive advantage.

• Enhance the focus on BI and competitive intelligence gained by teleservices providers. Industry Average companies run neck-and- neck with the Best-in-Class in deploying this service from vendors, which provides a substantive edge in understanding as much about a potential sales opportunity as possible, before it is released by marketing to sales for follow-through.

Best-in-Class Steps to Success • Continue to measure and manage expectations around

appointment-setting deliverables, and payment models, but with an open eye toward flexible engagement parameters with outsourced B2B teleservices vendors.

• Add more facets to the provider's engagement by allowing them to complement pure lead generation with coverage of inbound inquiry qualification, contact database development and lead nurturing. These activities currently receive minor attention by the Best-in-Class, but can be associated with more straightforward, measurable programmatic "quick hits" that can validate a vendor relationship in a shorter time frame than long, extended product sales cycles. Certainly the CFO and Purchasing VP will be more supportive of a longer relationship runway if early validation of a vendor's contribution to the bottom line is established.

• Don't hesitate to demand accountability from the relationship, in terms of measuring ROMI, as long as opportunities have time to develop into revenue-worthy deals. Forty percent (40%) of the Best-in-Class do so, but they do not currently outperform other companies around ROMI traction. Weekly meetings and frequent program reviews will ensure mutually shared culpability for results, as well as an open forum for honest two-way feedback between business partners.



Aberdeen Insights — Solution Provider Selection Criteria

Aberdeen's survey data helps solution providers amend and shape their offerings, in order to better serve the end-users they support, based on what they say in a vendor-agnostic discussion through the PACE model. When asked to define the most frequent grounds for rejecting sales leads, the Best-in-Class push back at the vendor under these circumstances:

• Contact is not a decision-maker 40%

• Not a fit for solution offered 25%

• Cannot connect with the contact 20%

• Purchase timeframe is too far out 10%

• Lack of budget / company too small 5%

The implication, among two-thirds of respondents, is that lead details are lacking in focus, i.e. sales isn't being linked to the right players inside target accounts, or the targets themselves do not often enough represent appropriate opportunities for a legitimate deal. This data is supported by a "vendor attribute satisfaction" question, in which "reporting and metrics" were rated as the least successful component of outsourced B2B teleservices engagements. Interestingly, the issues of "too long a timeframe" or "lack of budget" don't seem to rank as significantly as barriers to lead acceptance, an indicator that if the solution fit and contact are valid, sales will eventually find a way to build a valuable dialogue with their prospect.

Finally, why do some organizations not use external providers for teleservices support? Forty-four percent (44%) indicated a lack of comfort with outsourcing their marketing message; an equal number (44%) indicated no relevant budget. With Aberdeen's Best-in-Class metrics supporting frequent interface with outsourced callers ongoing solution training, one on one relationships between vendor staff and sales reps, and also the legitimacy of ongoing ROMI analysis for outsourced B2B teleservices engagements, both rationales are open to challenge.




Appendix A: Research Methodology

Between March and April 2008, Aberdeen examined the use, experiences and the intentions of more than 200 enterprises using outsourced B2B teleservices in a diverse set of business environments.

Aberdeen supplemented this online survey effort with interviews with select survey respondents, gathering additional information on strategies, experiences, and results experienced by end-users, as they detailed how they select, measure and manage the relationships with providers.

Responding enterprises included the following:

• Job title / function: The research sample included respondents with the following job titles: senior management (C-suite or president (27%), vice-president (16%), director (22%), manager (20%), consultant (8%) and other (6%). These individuals represent marketing (36%), sales (36%) business process management (6%), IT (5%) and other (17%).

• Industry: The research sample included respondents from high tech / software (46%), telecommunications (10%), computer equipment and peripherals (7%), publishing and media (6%), and all other industries (31%).

• Geography: The majority of respondents (71%) were from North America. Remaining respondents were from Europe (18%), Asia- Pacific (7%) and rest-of-world (4%).

• Company size: Seventeen percent (17%) of respondents were from large enterprises (annual revenues above US $1 billion); 23% were from midsize enterprises (annual revenues between $50 million and $1 billion); and 60% of respondents were from small businesses (annual revenues of $50 million or less).

• Headcount: Twenty-seven percent (27%) of respondents were from large enterprises (headcount greater than 1,000 employees); 18% were from midsize enterprises (headcount between 100 and 999 employees); and 55% of respondents were from small businesses (headcount between one and 99 employees).

Solution providers recognized as sponsors were solicited after the fact and had no substantive influence on the direction of this report. Their sponsorship has made it possible for Aberdeen Group to make these findings available to readers at no charge.

Study Focus

Responding executives completed an online survey that included questions designed to determine the following:

√ The degree to which outsourced B2B teleservices are deployed in support of their overall pipeline development and management efforts

√ The structure and effectiveness of both initial and long-term engagements with external providers

√ Best practices in defining, accepting, rejecting and compensating for sales leads developed by teleservices companies

√ The benefits, if any, that have been derived from outsourced initiatives

The study aimed to identify emerging best practices for outsourced B2B teleservices deployment, and to provide a framework by which readers could assess their own management capabilities.



Table 4: The PACE Framework Key

Overview Aberdeen applies a methodology to benchmark research that evaluates the business pressures, actions, capabilities, and enablers (PACE) that indicate corporate behavior in specific business processes. These terms are defined as follows: Pressures — external forces that impact an organization’s market position, competitiveness, or business operations (e.g., economic, political and regulatory, technology, changing customer preferences, competitive) Actions — the strategic approaches that an organization takes in response to industry pressures (e.g., align the corporate business model to leverage industry opportunities, such as product / service strategy, target markets, financial strategy, go-to-market, and sales strategy) Capabilities — the business process competencies required to execute corporate strategy (e.g., skilled people, brand, market positioning, viable products / services, ecosystem partners, financing) Enablers — the key functionality of technology solutions required to support the organization’s enabling business practices (e.g., development platform, applications, network connectivity, user interface, training and support, partner interfaces, data cleansing, and management)


Table 5: The Competitive Framework Key

Overview

The Aberdeen Competitive Framework defines enterprises as falling into one of the following three levels of practices and performance: Best-in-Class (20%) — Practices that are the best currently being employed and are significantly superior to the Industry Average, and result in the top industry performance. Industry Average (50%) — Practices that represent the average or norm, and result in average industry performance. Laggards (30%) — Practices that are significantly behind the average of the industry, and result in below average performance.

In the following categories: Process — What is the scope of process standardization? What is the efficiency and effectiveness of this process? Organization — How is your company currently organized to manage and optimize this particular process? Knowledge — What visibility do you have into key data and intelligence required to manage this process? Service — What characteristics of services provided have you used to support this process? How are these relationship features integrated and aligned?


Table 6: The Relationship Between PACE and the Competitive Framework

PACE and the Competitive Framework – How They Interact Aberdeen research indicates that companies that identify the most influential pressures and take the most transformational and effective actions are most likely to achieve superior performance. The level of competitive performance that a company achieves is strongly determined by the PACE choices that they make and how well they execute those decisions.




Appendix B: Related Aberdeen Research

Related Aberdeen research that forms a companion or reference to this report include:

• Outsourced B2B TeleServices: Adding a Personal Touch to Demand Generation Best Practices; March 2008

• B2B TeleServices and Appointment-Setting: Less Risk, Less Reward?; April 2008

• Demand Generation: Kick-Start Your Business; September 2007

• The Convergence of Sales and Marketing Technologies; December 2007

• Sales Effectiveness: Getting Sales Back to Selling; July 2007

Information on these and any other Aberdeen publications can be found at www.Aberdeen.com.

Author: Peter Ostrow, VP/Group Director, Customer Management [email protected]

Since 1988, Aberdeen's research has been helping corporations worldwide become BestinClass. Having benchmarked the performance of more than 644,000 companies, Aberdeen is uniquely positioned to provide organizations with the facts that matter — the facts that enable companies to get ahead and drive results. That's why our research is relied on by more than 2.2 million readers in over 40 countries, 90% of the Fortune 1,000, and 93% of the Technology 500.

As a HarteHanks Company, Aberdeen plays a key role of putting content in context for the global direct and targeted marketing company. Aberdeen's analytical and independent view of the "customer optimization" process of Harte Hanks (Information – Opportunity – Insight – Engagement – Interaction) extends the client value and accentuates the strategic role HarteHanks brings to the market. For additional information, visit Aberdeen http://www.aberdeen.com or call (617) 7237890, or to learn more about HarteHanks, call (800) 4569748 or go to http://www.hartehanks.com

This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective factbased research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc. 010908a

http://www.aberdeen.com/summary/report/perspective/4975-AI-outsource-b2b-teleservices.asp

http://www.aberdeen.com/summary/report/research_briefs/5052-RB-b2b-teleservices-appointment.asp

http://www.aberdeen.com/summary/report/benchmark/4178-RA-demand-generation.asp

http://www.aberdeen.com/summary/report/benchmark/4177-RA-convergence-sales-technologies.asp

http://www.aberdeen.com/summary/report/benchmark/4115-RA-sales-effectiveness.asp

http://www.aberdeen.com/

mailto:[email protected]

http://www.aberdeen.com/

http://www.harte-hanks.com/

b2b teleservices: the 2008 buyer's guide · hosted marketing automation solutions, and...

Documents