B2B Telemarketing – Dialing for Tech Dollars & complex sales

Today’s Forbes article, “Dialing for Tech Dollars,” caught my attention. The article reports that B2B brands like Microsoft, BEA and PeopleSoft are outsourcing lead generation (via telemarketing) for $1million+ software solutions.

Can the “T-word” help sales people sell complex solutions?
B2B marketers voted B2B telemarketing as the #1 safest tactic they would be most likely to invest in if their CEO gave them an extra $50,000 for lead generation. (MarketingSherpa survey of 729 marketers)

Hunting down executive level decision makers is a time consuming task most sales people hate doing. One sales manager told me at a conference with a chuckle, “90% of sales people hate to cold call and the other 10% are lying.”

Bottom line: If you have a sales person selling $2million annually, their time is worth roughly $1,000 per hour in revenue to your company ($2,000,000 / 2000 working hours per year roughly = $1000 per hour)

Can outsiders generate ROI for the complex sale?
If you have a complex sale, you can’t risk hiring a B2B “telemarketing” firm that handles transactional sales or low-cost, in-demand widgets. You need to hire savvy professionals who understand the needs and issues of each company they contact. Unlike B2C telemarketers – where it’s a numbers game – B2B is about quality not quantity.

The Forbes article points out that telemarketing can be effective assuming you find the right partner. Outsourcing costs from $40 to $100 per hour depending on the company. From $7K to $16K per month per rep.

When it is done well, I’ve seen B2B telemarketing firms help sales people sell by almost doubling their selling time. At my company, InTouch, we’ve documented revenues from leads at 2000% to 6300% ROI using B2B Teleprospecting for clients in 9 to 18 months.

A 1998 report by Gartner entitled, “Inside Selling: Selling More at Lower Cost”, that showed that adding inside sales person (a.k.a. telemarketer) to support an direct/field sales rep can increase revenue per rep by 150%. Assuming all things remain equal, that means 10 field sales people would now perform like an equivalent team of 25.

The report estimates the fully loaded costs for 1 inside sales person is 35% of the cost for 1 field sales person.  Using my above example, the increased cost to get the performance 15 more field sales people would be adding 3.5 field sales people in additional budget i.e. you’re paying 13.5 field sales people (10 + 3.5 in additional budget) to get the productivity of 25 direct sales people.

I’ve searched but haven’t been able to locate anything to update my above example with more recent data.  Overall, every sales person I speak to says they are working harder today than they did 5 to 10 years ago and getting the same or less return.

If you decide to outsource, the key is to find a partner that aligns with your culture and understands your company, your value proposition, your target market and the key issues of people your trying to reach.

If you’re looking for more tips and ideas on cold calling or B2B telemarketing check out my categories on the left.

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