Marketing Profs

It's Friday afternoon. Phil, the top sales rep for a technology company, is catching up on his paperwork.

Reluctantly, he picks up a stack of leads awaiting follow up. He rifles through them looking for the hot ones that have budgets and plan to buy within 90 days. He finds none. Among the discards: a prospect indicating an estimated budget of $200,000 to be possibly spent next year. Phil, however, needs to make his numbers this year and decides the decision-making timeframe is too far out. This "lead" goes into the circular file.

This is a fictionalized episode of an all-too-frequent occurrence. Salespeople are notoriously poor in following up on qualified leads. In fact, experts say, sales does not follow up on more than 70% of leads.

Why? Field salespeople in most organizations are compensated, motivated, and managed to focus on short term opportunities, not on the pipeline. Phil is paid to close—he's a "hunter," not a "farmer." But Phil's company has no one running the farm.

Contrast that scenario with the strategic marketing experts at CenterBeam, a San Jose-based IT outsourcing firm that provides sophisticated, yet affordable, IT outsourcing services on a fee-for-service basis. At CenterBeam, the closers are supported by expert "farmers" who cultivate leads into relationships.

By making the lead-generation process a cornerstone of its strategic marketing program, CenterBeam is getting many of its sales from long-term leads cultivated on the "farm"—and a ten-to-one return on its outside investment in the farmers.

Building Relationships From Lead Generation

Since it sells an IT service, you would think that CenterBeam would target CIOs. Instead, it goes after CFOs with a message about focus and expertise—let CenterBeam do what it does best (manage and support the underlying IT infrastructure) so the CFO's company can do what it does best.

CFOs are tough to reach and even tougher to sell, but the company has had extraordinary success using direct telemarketing, voice mail, and email in a multimedia, multi-touch nurturing campaign. In fact, in 2005 CenterBeam unearthed 17 sales in this manner worth an annualized $4.5 million. Since the company works off multiyear contracts, the lifetime value of these clients is actually much higher.

"CFOs are not going to respond to magazine ads or radio spots and say, 'Yes, my company's IT function is broken and I need somebody to fix it,'" said Kirstin Burke, CenterBeam's director of marketing. "This is about building a trusted advisor relationship over time—even before the need is implicit—so that they know about CenterBeam and our value when they are ready to consider alternatives."